Energy

United Kingdom

The United Kingdom of Great Britain and Northern Ireland (UK) left the European Union (EU) on 31 January 2020, but the vast majority of energy-related issues remained unaffected until the end of the transition period at the end of 2020. The rules that provisionally apply since 1 January 2021 are those agreed under the Trade and Cooperation Agreement, agreed by EU and UK negotiators on 24 December 2020.

After nearly 50 years of EU membership, the EU-27 and UK energy markets are deeply interlinked, thanks to electricity interconnectors and gas pipelines running between Great Britain and Northern Ireland on the one hand and France, the Netherlands, Belgium and Ireland on the other. In recent years, the UK has been a net importer of energy, with the EU providing some 5-10% of its electricity supply and a varying share (4%-12%) of its gas needs.

On 1 January 2021, the UK left the EU's internal energy market. Energy trading through electricity interconnectors between the EU and Great Britain is no longer managed through existing single market tools, such as EU market coupling, as these are reserved for EU countries. Only Northern Ireland will maintain part of the single electricity market with Ireland, as provided by the Withdrawal Agreement.

Furthermore, the UK left the European Atomic Energy Community (Euratom), including the nuclear common market, which entails strong guarantees for the safe and peaceful use of nuclear energy and the security of atomic energy supply and enables the pooling of knowledge, research, infrastructure and funding of nuclear energy.

The EU-UK Trade and Cooperation Agreement

Concluded by EU and UK negotiators on 24 December 2020, the EU-UK Trade and Cooperation Agreement has been provisionally applicable since 1 January 2021. The energy section of the agreement is covered under Title VIII, and will run until 30 June 2026, mirroring the provisions in the title on fisheries. There are also 4 energy-related annexes, covering

  • lists of energy goods, hydrocarbons and raw materials
  • energy and environmental subsidies
  • non-application of third party access and ownership unbundling to infrastructure
  • allocation of electricity interconnector capacity at the day-ahead market time-frame

A separate agreement between Euratom and the UK covers cooperation on the safe and peaceful uses of nuclear energy.

Energy efficiency and renewable energy

EU-UK cooperation on energy is grounded on delivering the clean energy transition and the need to ensure security of supply. The UK has reaffirmed its ambitions on energy efficiency and renewables for 2030, and both the EU and the UK have committed themselves to practical measures to facilitate the integration of renewables in the electricity system.

The agreement contains provisions for cooperation in the development of offshore renewable energy, with a clear focus on the North seas (North Sea, Irish Sea). The EU and the UK will be able to continue to cooperate in this area, building on the North Seas Energy Cooperation, a platform developed by the EU, a number of Member States and Norway to develop the use of renewables in this region. The scope of the cooperation in this field envisaged by the agreement reflects the EU's strategy on offshore renewable energy, in which the Commission proposes to increase EU’s offshore wind capacity to at least 60 GW by 2030 and to 300 GW by 2050.

Security of electricity and gas supply

The agreement helps ensure security of electricity and gas supply, by establishing a dedicated framework for continued EU-UK cooperation in this area. This will be particularly relevant for Ireland, which will become isolated from the rest of the EU internal energy market at least until new interconnections are built.

In addition, there is also a framework for transmission system operators to develop new arrangements for trading over interconnectors, as the UK transmission system operators will not participate in EU procedures such as EU market coupling. This means that trade across electricity interconnectors with the UK will continue, although less efficiently when compared to the single system used inside the EU.

For trading over electricity interconnectors, the EU and the UK will task transmission system operators with developing a new arrangement based on multi-regional loose volume coupling. This specific process will link the distinct and separate markets in the EU and the UK, using a different algorithm to EU market coupling and with access only to commercial data from markets directly linked to the UK.

Technical cooperation between TSOs and energy regulators

The UK will not be able to participate in EU bodies such as the Agency for the Cooperation of Energy Regulators (ACER), the European networks of transmission system operators for electricity (ENTSO-E) and for gas (ENTSOG). The agreement provides for a new framework for cooperation between EU and UK transmission system operators (TSOs) and energy regulators. The new framework for cooperation covers all areas which are necessary for the effective implementation of the Agreement.

Nuclear energy

The Euratom-UK Agreement provides for wide-ranging cooperation on nuclear safety and peaceful uses of nuclear energy, including facilitation of trade and commercial cooperation relating to the nuclear fuel cycle, underpinned by assurances that both sides will comply with international non-proliferation obligations, such as nuclear supply group guidelines.

This agreement provides for a stable framework to continue cooperation and trade with the UK in the field of nuclear energy, while reassuring both parties that nuclear activities are performed in a secure and safe manner and for peaceful purposes only. As such, the agreement foresees the supply and transfer of nuclear material, non-nuclear material, technology and equipment, as well as trade and commercial cooperation relating to the nuclear fuel cycle. In addition, the agreement covers cooperation in the safe management of spent fuel and radioactive waste, and exchange of information in areas of mutual interest like nuclear safeguards, physical protection, nuclear safety and radiation protection, including emergency preparedness and response. The use of radioisotopes and radiation in agriculture, industry and medicine is also part of the agreement, as are geological and geophysical exploration, and the development and use of uranium resources. Lastly, the agreement also includes cooperation on regulatory aspects of the peaceful use of nuclear energy, and provisions for research and development, allowing the UK to continue to participate in the ITER project through the Euratom Fusion For Energy (F4E) Joint Undertaking.

Nuclear safety

The Euratom agreement provides for wide-ranging cooperation on safe and peaceful uses of nuclear energy, underpinned by commitments by both sides to uphold a high level of nuclear safety standards. Compared to other nuclear cooperation agreements, this Euratom agreement contains ambitious provisions on cooperation on nuclear safety. These provisions cover cooperation in the field of nuclear safety, safe management of spent fuel and radioactive waste and radiation protection, including emergency preparedness and response.

The UK remains, under its own competences, party to international instruments on nuclear safety, such as the Convention on Nuclear Safety, the Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management, the Convention on Assistance in the Case of a Nuclear Accident or Radiological Emergency and the Convention on Early Notification of a Nuclear Accident. The Euratom and the UK commit to work together on the improvement of international nuclear safety standards and conventions, and of their implementation.

The Euratom agreement also allows for continued cooperation between the Euratom and the UK in the subject matters covered by established Euratom systems for monitoring and exchanging information on levels of radioactivity in the environment, including the European Community Urgent Radiological Information Exchange (ECURIE) and the European Radiological Data Exchange Platform (EURDEP), and established expert advisory groups in the field of nuclear safety, including the European Nuclear Safety Regulators Group (ENSREG). This will allow for early notification and reliable radiological information to EU Member States and to the UK in case of nuclear accidents. It will also allow rapid, coordinated responses to radiological emergencies by sharing real-time data.

Nuclear safeguards

A key feature of the agreement relates to the peaceful uses of nuclear energy. Nuclear safeguards provisions are foreseen in the agreement to ensure that both parties adhere to their non-proliferation commitments and that cooperation serves only peaceful purposes in the absence of which trade in the nuclear field would not be possible. This includes the exchange of notifications and consents when nuclear items are transferred.

As a consequence, according to the Euratom agreement, any transfer of nuclear material, non-nuclear material, equipment or technology carried out pursuant to the cooperation activities under this agreement need to be made in accordance with the relevant international commitments of Euratom, the EU/Euratom countries, and the UK in relation to peaceful uses of nuclear energy in particular as regards nuclear safeguards and physical protection

Moreover, under the Euratom agreement, both parties agreed to implement within their respective jurisdictions a robust and effective system of nuclear material accountancy and control aiming to ensure that nuclear material subject to this agreement is not diverted from its peaceful use.

Trade in radioisotopes

The cooperation envisaged under the Euratom agreement includes, amongst other things, the use of radioisotopes and radiation in agriculture, industry, medicine and research. This is especially useful for minimising the risks of shortage of supply of medical radioisotopes, and to support the development of novel technologies and treatments involving radioisotopes, in the interest of public health.

The Euratom agreement foresees the exchange of information in areas of supply of radioisotopes.

The Trade and Cooperation Agreement and ITER

The UK will continue to participate in the ITER project actions and activities through its membership of the Fusion for Energy (F4E) Joint Undertaking. The Trade and Cooperation Agreement includes provisions for associating the UK to EU programmes through a specific protocol to part 5 of the Agreement. However, this still needs to be adopted by a specialised committee that will be established under the Agreement.

The entry into force of the protocol will also allow the UK to participate in the Euratom research and training programme and to become a member of the Joint Undertaking Fusion for Energy (F4E) as an associated third country.

Separate agreement: Safe and peaceful uses of nuclear energy

The Euratom Community has negotiated separate agreements on the peaceful uses of nuclear energy with a number of third countries based on the Euratom Treaty, including the USA, Canada, Australia, Japan and Ukraine. A well-established pattern in this sense exists both in the Euratom Community and at international level. Moreover, Euratom possesses specific competences linked to the substance of these type of agreements, for which the specific and separate Euratom legal basis is necessary.

Level playing field measures in the energy sector

As well as the horizontal level playing field provisions relevant for the energy sector, for example on social and environmental issues, the agreement includes certain specific provisions. These relate to energy sector subsidies, non-discriminatory promotion of energy from renewable sources, prohibition on export restrictions (including export monopolies and export licences), and on dual pricing of energy goods.

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