This provides a useful overview, including:
- that the EU’s version of the draft trade agreement between the UK and the EU seems to be based on the concepts contained in the current arrangements for the internal energy market (IEM), while the UK’s proposal is centred around energy trade across interconnectors, cooperation with transmission system operators and the European Network of Transmission System Operators, and decarbonisation objectives;
- after the transition period, introduction of custom procedures and tariffs on trade between the UK and the EU may impact the energy sector;
- after the transition period, new access rules for all electricity interconnectors need to be approved in the UK and with the relevant EU Member State authorities in order for cross-border electricity trade to continue between the UK and the EU. Broadly, this means moving from the implicit day-ahead allocation under the IEM to explicit day-ahead allocation under the revised (no-deal) access rules of the relevant interconnector, analogously to how things operated prior to market coupling in 2014;
- after the transition period, the UK is likely to be excluded from the “solidarity principle” in relation to gas supply;
- after the transition period, until further notice, market participants trading in wholesale energy products where delivery is within Great Britain which are already registered with an EU regulatory authority (or the Northern Ireland utility regulator) under the EU’s REMIT regulations do not need to register with Ofgem. However, market participants wishing to trade on the EU wholesale energy market will need to register with an EU Member State national authority.
If you would like to discuss specific arrangements for support through the risks of the move to an uncertain future relationship, on how you might express the concerns of your business to governments, on dispute risks that may arise, or on any other questions or challenges you have, please do contact your regular Herbert Smith Freehills relationship contacts, or otherwise any of our experts listed here.