OFFSHORE INTEGRATED GRIDS
FEATURE SPONSOR
BALANCING SUPPLY AND DEMAND
The creation of a common energy production supply capability with integrated grids to balance supply and demand across various countries has been facilitated for some time by interconnectors between countries and continents.
not affect the direction of travel towards a more integrated energy economy, although differences in approach may emerge. Energy projects are typically capital intensive and, following the Brexit vote, investor confidence and access to finance will be key issues for the industry in the coming years.
DIRECTIVES
One of the questions arising from Brexit is the impact upon this initiative and the extent to which the concept of a common energy market will survive.
EU ENERGY POLICY
EU energy policy is currently being implemented by the Commission’s Third Energy Package (2009) and its 2015 Energy Union Package. The framework has five elements, namely, energy security; a fully integrated European energy market; energy efficiency; carbon reduction and research, innovation and competiveness.
The impact of withdrawal depends on what future relationship the UK forms with the EU. Given the increasing multi-national nature of energy markets and companies, withdrawal from the EU will probably
The EU Large Combustion Plants Directive (2001/80/EC-LCPD) and its successor, the Industrial Emissions Directive (2010/75/ EU-IED), require new power plants to comply with stricter emission limits, while older plants have had to close or clean up by 2015 under LCPD (or by 2023 for IED). The directives are transposed into UK law via the Environment Permit Regulations. The closure of plants coincides with warnings from OFGEM on the UK’s decreasing capacity margins and has implications for UK energy security, as generating plants come to the end of their life under the Directives. Power stations are due for imminent
closure in many member states, however, since coal is currently attractive, new coal fired plants are under construction, albeit with associated carbon reduction technology, which increases the cost. The UK’s existing renewables targets are set by the 2009 Renewables Directive. An EU exit would not remove the legally binding UK climate targets under the
Climate Change Act 2008 but it would increase the focus on all aspects of UK based generation, especially if Brexit resulted in poorer security of supply through decreased inter connectivity to Europe, reduced harmonisation of EU energy markets or less investment into the UK by multi-national companies.
BREXIT’S IMPACT
Brexit will also affect the UK’s international climate targets under the United Nations Conference on Climate Change. Currently the UK negotiates as part of the EU block and has internally set targets together with those of other member states aimed to meet the EU’s overall target. An EU withdrawal would have to address that lack of UK specific targets. One currently unresolved question is
how Brexit will affect the UK’s ratification of the Paris Agreement which the UK signed in April 2016. The government has been at the
forefront of efforts to liberalise and develop cross border energy markets and is likely to continue to do so following this policy. However, no matter how the UK’s exit from the EU is negotiated and structured, in order to increase inter connectivity with continental Europe, co-operation with the EU internal energy market will be necessary.
If the UK was permitted to participate in the Energy Union following Brexit it
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