Utility Week

6 | 5TH - 11TH APRIL 2019 | UTILITY WEEK News Inside story A ngus MacNeil knew the game was up for Theresa May's withdrawal agreement when he entered the House of Commons division lobby last Friday a•ernoon. The Western Isles MP and former chair of the Energy and Climate Change Committee rapidly realised the number of rebel Conservative and Democratic Unionist Party MPs queuing up to vote against the prime minister's deal meant it was doomed. Within a few minutes, the rest of the world knew too as the result of the vote came through. By 344 to 286 votes, the Commons voted to reject the PM's deal – the third successive defeat it has suffered. Last Friday's vote, which took place only hours before the UK had originally been due to leave the EU, has pushed the entire Brexit process even closer to the brink. While May wants to bring her withdrawal agreement back for yet another vote in the Commons, MPs are trying to hijack the entire process, although they have yet to find a majority for any single course of action. Unless the parliamentary deadlock can be broken, the default postion is that the UK will depart the EU without a deal on 12 April. Angela Hepworth, policy and regulation director at EDF Energy, told an Energy UK Brexit briefing event on 28 March that the politicking surrounding EU withdrawal is "froth" from a business perspective. But the French-owned company has been putting in place plans for the "worst- case scenario" of a no deal withdrawal from the EU, she said. These include increasing "strategic stocks" of key materials to boost the company's resilience if its supply chain is disrupted by traffic hold-ups at UK ports. Access to interconnectors A number of proposed interconnector projects, which are playing an increasingly important role in the UK's energy mix – according to the Energy Trends statistics published last week by the Department for Business, Energy and Industrial Strategy (BEIS) – are up in the air due to regulatory uncertainty post-Brexit. However, Hepworth expressed confidence that exchanges of electricity and gas would continue across the existing interconnectors, albeit perhaps "less efficiently" than is currently the case. Ofgem approved modified access rules for the interconnectors in mid- March, which will enable trade to carry on. She also warned that "constant vigilance" will be needed to spot the "unforeseen issues" likely to thrown up by Brexit. And the EDF director described as "astonishing" the uncertainty over the future of the UK's emissions trading arrangements, stressing the importance of "clarity" on the future direction of the strategic carbon price. Longer-term worries stemming from Brexit include access to labour – particularly in relation to EDF's new nuclear power plant construction project at Hinkley Point C. The good news though, Hepworth said, is that energy is "one of the best set up" sectors for dealing with Brexit, singling out how ministers had resolved the risks to the movement of nuclear fuel and materials as a result of the UK's departure from the Euratom treaty. And she said the language in the proposed political declaration, which outlines the UK's future relationship with the EU, is "quite helpful" in terms of reducing friction in the future EU-UK energy relationship. Good starting point Matt Hinde, director of energy at public affairs agency Fleishman Hillard, agreed the political declaration is a "good starting point for a good relationship". "On energy we are in a pretty good place – not least thanks to the work of BEIS," he said. But he warned this good progress on the UK's energy relationship with the EU could be worthless if the wider Brexit negotiations fail to get off the launch pad. "It's not all bad news but we have to somehow get to that negotiation and this isn't a great starting place," said the Brussels-based Hinde, pointing to mounting exasperation in EU circles with how the UK is handling its exit. "There is complete consternation about how a government of a developed country can reduce its influence in the world quite so dramatically." And the EU will not back down on the backstop, the controversial provision in the withdrawal agreement that threatens to tie Northern Ireland into the EU's single market and customs union long term, he predicted. "The issue of the backstop is viewed as essential, it will not disappear. If we are to have an organised withdrawal, it will be on the basis of a backstop. "The backstop is going to be implemented or we will have to find a way to extend." This souring of relationships could have ramifications long a•er the withdrawal pro- cess is done and dusted, said the former UK government energy envoy to the EU. Several thorny issues While the UK is consumed by Brexit, it is only one of several thorny issues that the Brexit takes on soft focus The softer Brexit the House of Commons is inching towards almost three years after the referendum could be welcome in energy circles, says David Blackman.

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