The UK Government has signed a landmark memorandum of understanding (“MoU“) facilitating renewable energy cooperation between the UK, the European Union and other North Seas countries. This agreement marks a major step towards ensuring post-Brexit energy security for the UK and sets out a framework for future collaboration for an initial period until 30 June 2026.

Signed between the UK and the North Seas Energy Cooperation (“NSEC“), this MoU builds on the UK-EU Trade and Cooperation Agreement (“TCA“) and effectively allows the UK to re-establish a working relationship with the NSEC forum (as its previous membership fell away following Brexit) to develop renewable projects in the North Seas- with specific focus on windfarms (including offshore grids) and electricity interconnectors. The countries involved include France, Germany, Ireland, Belgium, Denmark, Luxembourg, Netherlands, Sweden, Norway and the European Commission.

Objectives of the MoU

All state parties to the MoU recognise its twin objectives: (a) to implement their climate obligations under the Paris Agreement, and (b) to reduce the region’s dependency on Russian oil and gas.

  • Reaching Climate Goals: Each state party (or regional entity) has set its own climate goals under the umbrella of its Paris Agreement obligations that the MoU is expected to contribute towards. For instance, the EU is seeking to reach its greenhouse gas emissions reduction target of at least 55% by 2030, and by 2050, reach climate neutrality (as enshrined in the European Climate Energy Law). Similarly, Norway is aiming to reduce greenhouse gas emissions by at least 50% and towards 55% by 2030.

The UK’s ambition is to reduce greenhouse gas emissions by 78% by 2035 (as enshrined in the Carbon Budget Order 2021) and achieve net zero greenhouse gas emissions by 2050 (as enshrined in the 2019 amendment of the Climate Change Act 2008). A coordinated and increased production of renewable energy, especially as renewables continue to play a prominent role in the domestic energy mix, would greatly enable the state parties to meet their net zero ambitions and implement the obligations enshrined in the Paris Agreement.

  • Reduction of Reliance on Russian Energy: Since Russia’s invasion of Ukraine, the EU and the UK have sought to rapidly reduce their dependence on Russian fossil fuels. The European Commission launched the REPowerEU Plan to achieve this through diversification of energy supplies and accelerated roll-out of renewable energy. The UK has banned the imports of Russian gas since the beginning of 2023, with a ban on coal and oil imports active since last year, and has also been focussing on encouraging renewables domestically.

The North Sea Region has significant potential for generation of offshore renewable energy, and any generation in that region will also aid the parties of the Mo to reach their renewable energy generation targets.

The government is hopeful that this MoU will enable the UK to achieve its target of increasing offshore wind capacity to 50GW and deliver 18GW of electricity interconnector capacity by 2030. Similarly, the EU member countries are hopeful that the projects initiated under this MoU will help it reach its objectives under the REPowerEU Plan, which is to instal at least 60 GW of offshore wind capacity by 2030 and 300 GW by 2050.

Offshore Renewable Energy – The Cooperation Framework

The MoU enshrines the parties’ commitment to collaborate on a voluntary basis with a view of promoting the sustainable development of offshore energy, particularly wind, in a cost-effective manner. The cooperation extends to facilitating expert and technical dialogue, exchange of information and sharing best practices.

This collaboration also envisages planning of specific projects, including development of offshore grids. It covers, more particularly, the areas of-

  • Hybrid and joint projects;
  • Support framework and finance;
  • Maritime spatial planning;
  • Sharing of information on new technologies;
  • Best practices in respective onshore and offshore grid planning and
  • Exchange of best practices in relation to the relevant rules, regulations and technical standards.

The parties further resolved to meet annually at an appropriate administrative level to identify and provide guidance to any ongoing technical work on specific projects that are of “of direct common interest” in all areas of cooperation highlighted above.

This identification of projects of “direct common interest” for NSEC members and the UK will be conducted by the NSEC co-chairs of the relevant Support Group along with the ad-hoc working group on alignment, as well as the UK experts. Other UK stakeholders may also be invited – such as the offshore energy industry and transmission system operators. Information facilitating this identification is also envisaged to be exchanged at an expert level.

Significance for the UK

Apart from the twin objectives that are of critical importance to all parties involved, this MoU is especially relevant for the UK. As UK continues to be one of the key generators of renewable energy, there is a requirement for ensuring that it also has the ability to export excess generation to where it is needed most prevents the curtailment of renewables. Curtailment is a current issue for the UK energy market, with it reaching a record high in 2021, costing the UK £507 million, up from £299 million in 2020. Interconnectors are key for such export of energy.

The UK already has established interconnectors with France, Belgium, Norway and Netherlands, while an interconnector to Germany is currently being built. This MoU will contribute to easing the pathway for further interconnection with the NSEC countries and will be of special importance to the development of a North Sea offshore grid and multipurpose interconnectors. The increased interconnector fleet will help to avoid curtailment of UK’s renewable generation, contributing to lower prices for consumers while also reducing the region’s reliance on carbon dense fuels.

The full text of the MoU can be found here.