Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ... 

Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

Advertisement

No deal or hard Brexit could increase electricity costs by £270 million a year

The UK Energy Research Centre (UKERC) says a no-deal or hard Brexit could increase electricity generation costs by £270m a year.

Currently, the EU’s electricity market allows electricity in the UK to be traded freely across the EU, coupling the electricity markets of the 19 countries in North-Western Europe. This automatically trades electricity from lower to higher-priced markets, which the UKERC report says ‘maximises profits and energy security.’

Prior to the single electricity market, which was formed in the 1990s, markets closed at different times, forcing traders to decide their cross-border trades based on anticipated rather than actual prices. According to the report, traders were forced to guess the price of electricity which led to errors and capacity going underused, with energy flowing the wrong way up to a third of the time.

The report predicts electricity trading patterns in 2030 and compares a ‘Soft Elecxit’ which would couple the UK market with France, and a ‘Hard Elecxit’ where the two markets would be decoupled. In the latter scenario, the cost of generation in the two countries would increase by £500m or 1.5% of the market value, with Great Britain carrying 60% of these losses, equating to £270m a year.

Report co-author Dr Joachim Geske said: ‘Abandoning the successful system of electricity market coupling is not an inevitable result of Brexit.

‘However, we wish to illustrate the costs of doing so, which are likely to grow significantly over time.’

Co-author Dr Iain Staffell added: ‘Britain leads the world in how it has decarbonised its power system, and recently passed the point of having more renewables installed than it does fossil-fuelled power stations.

‘With ever more electricity coming from variable sources, having inefficient trade with our neighbours would cause real harm to consumer electricity bills, not to mention the security and stability of electricity supply.’

Read the report here.

In related news, a report from University College London claims energy costs have risen by £75 per household since the referendum in June 2016.

Thomas Barrett
Senior journalist - NewStart Follow him on Twitter

Comments

Subscribe
Notify of
guest


0 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Help us break the news – share your information, opinion or analysis