The precise impact on the energy sector, should Britain leave Europe is unclear at this stage. However, one certainty is that in the immediate future we would be very unlikely to see any major changes to the current systems and regulation. Any exit would take a significant amount of time to negotiate and plan and the EU and the UK would have to decide how access to each other's energy markets would continue, if at all.
Britain has a number of electricity and gas interconnectors, such as IFA (Interconnector France – Angleterre, i.e. the interconnector between France and England) and is in the process of developing more. EU Member States cannot negotiate their own trade agreements, so it would be a matter for Britain and the EU as a whole to decide on their future use, such as whether these interconnectors would be able to enter the capacity market auctions. In addition, Britain would have to decide whether to continue to adopt EU-wide electricity regulation or to develop its own set of policies.
As regards the UKCS (UK Continental Shelf), Britain would have to decide whether to continue to apply the various EU Directives relating to oil and gas or whether to develop its own domestic policies. EU companies that have investments in UK waters could find themselves subject to two different regulatory regimes if Britain decides to develop its own regulatory framework.
The UK may well remain committed to the single European Energy Market which would require it to remain subject to the relevant European Energy Directives and Regulations, and to remain part of the institutions like ACER, ENTSO-E and ENTSO-G which regulate it.
If there were a more radical approach which meant leaving the single energy market, then there would be more significant issues to be dealt with such as access to EU markets, especially through interconnectors, and access to UK markets for EU energy.
On climate change, even if the UK were to leave behind the EU Climate Change Package, it would still have the very stringent UK targets as well as any post-Kyoto commitments.
UK regulation of many energy topics, including carbon capture and storage for example, implement the relevant Directives and therefore conscious decisions would need to be taken to move away from them through new regulation. How far they would go is very difficult to estimate. Relaxations in other areas, such as procurement, may also have an impact on the energy system.