FEATURE: E&T MAGAZINE – What will Brexit mean for the UK’s carbon reduction targets?

The UK’s climate policy is intimately aligned with that of the EU. How will the country’s political departure from its geographical neighbours impact progress on its net-zero carbon targets?

“We will build back and bounce back greener,” UK Prime Minister Boris Johnson declared at his 2020 Conservative keynote speech in October, referring to the country’s post-pandemic recovery. Britain, he added, will become “the world leader in low-cost clean power generation”.  

In the preceding weeks, several green policy initiatives had been unveiled: an offshore wind bonanza to power all UK homes; re-wilding 30 per cent of Britain; no new fossil-fuel vehicles. All to be achieved in the next decade as part of the UK’s net-zero by 2050 ambition.

Energy interconnection is critical for reducing costs of UK decarbonisation and to maximise renewable energy use, particularly intermittent offshore and onshore wind.

The announcements were welcomed across party lines. However, despite having reduced its emissions by 28 per cent in the last decade, largely due to plummeting coal use, the country is still far from being on course to reach its target, even with the new initiatives. As previously outlined by the UN’s Intergovernmental Panel on Climate Change, making gains in the next decade is crucial and so to be on an irreversible pathway to decarbonisation, a colossal effort across every sector is needed.

Yet the country is in flux. Not just because of the pandemic, but also its radically changing context due to Brexit. As the transition period expires at the end of the year, huge policy gaps will be created and access to key EU mechanisms that have, arguably, supported the country’s emission wins so far, will be restricted or gone altogether. This huge shift will inevitably impact how – and how quickly – the UK achieves its climate change goals.

One obvious sector to be impacted is energy. After January 2021, the UK looks likely to lose unfettered access to the EU internal energy market (IEM), which is used to send and receive electricity to other member states via interconnectors.

The UK has the world’s biggest offshore wind capacity. More installed interconnectors – it currently has five but several more are planned – will allow it to shift excess wind-power generation, including from new projects like the 1.2GW Doggerbank, to other EU countries through the IEM.

Though both parties recognise the benefits of continued co-operation on energy interconnection, post-Brexit the UK is likely to lose access to the shared IEM algorithm that facilitates international trading, says Emma Champion, associate at BloombergNEF. This includes for intra-day and day-ahead markets, which are among the most liquid products of a power exchange. “Instead the UK will need to hold explicit auctions for trading electricity on interconnectors, which will limit the efficiency,” she explains.

In a renewable energy and decarbonisation context this could be significant, says Shane Tomlinson, the deputy CEO of E3G, an independent European climate-change think tank. “Energy interconnection is critical for reducing costs of UK decarbonisation and to maximise renewable energy use, particularly intermittent offshore and onshore wind,” says Tomlinson, who was previously an energy policy adviser in the Prime Minister’s Strategy Unit.

The UK’s exclusion from the EU’s IEM could require increased energy system investment of £500m annually, according to the Grantham Institute at Imperial College London.

RenewableUK’s director of future energy systems, Barnaby Wharton, adds that while leaving the EU will not impact on offshore wind expansion, “it’s important our future arrangements with the EU and the IEM allow us to trade energy smoothly so we can export our surplus power when we are producing it and import flexibly to support our energy system when necessary”. Without this access, energy prices in the UK will almost certainly rise, according to the UK government’s own assessments.


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