Brexit could leave the UK more vulnerable to energy supply shortages and drive up electricity and gas bills by making energy trading less efficient, a House of Lords committee has warned.
Leaving the EU will diminish Britain’s influence on energy rules and cast uncertainty over future European investment in UK energy infrastructure, the peers said in a report. Lord Teverson, the chair of the EU, energy and environment subcommittee, said the impact on energy prices could be significant.
“There will be a divergence and we will not be integrated. What that means is energy trading becomes less efficient and retail prices will go up,” he told the Guardian.
Britain and the EU are ncreasingly interconnected on energy, with the four power cables to the continent expected to be joined by eight more in the coming years. About 12% of the UK’s gas and 5% of its electricity comes from the EU.
Despite this, the report said the UK is almost certain to leave the EU’s internal energy market, which is designed to remove trade barriers and harmonise energy trading between member states. Energy companies told the committee they would like to stay in the market.
The committee said ministers had failed to spell out the impact of quitting the scheme, and urged them to publish an assessment of the consequences for energy prices.
Being outside the EU would also mean the UK “may be more vulnerable to supply shortages in the event of extreme weather or unplanned generation outages”.
Post-Brexit Britain, like Norway and Switzerland, will find its influence on energy rules “severely constrained”, the peers said. Asked why that mattered, Teverson said: “It matters because we are part of the EU energy system whether we like it or not.”
The report also warned of the unlikely but highly damaging consequences of the UK failing to put in place a new regime to replace Euratom, the EU nuclear cooperation treaty, which the government has decided to leave. “That could be a real, real problem,” said Teverson.