European Energy Traders Welcome UK-EU Deal
The European Federation of Energy Traders (Efet) said December 29 it welcomed the success of the UK and European Union negotiations. The deal, which allows the continuation of tariff-free trade between the two entities, is subject to ratification by the European Parliament and the British parliament.
Efet said it was confident that trading of power and gas between Great Britain and continental Europe will continue smoothly from January 1, notwithstanding the need for customs declarations and changes in day ahead auction procedures.
It said: "We support the emphasis that the energy chapter of the agreement places on principles for the operation of energy markets, which must be observed on both sides:
- Free formation of wholesale power and gas prices
- No technical limits on prices amounting to a restriction on cross-border trade
- Third party access to transmission and distribution networks
- Unbundling of the management and operation of transmission grids
- Integration of renewable energy sources in the electricity market
"By emphasising such principles, the agreement ensures at least basic future alignment of the design of power and gas markets as between Great Britain and the EU27. It leaves open for the time being the question of linking of the EU ETS with the UK emissions trading system due to be introduced after 1 January 2021. We trust the deal done now can provide a starting point for yet closer cooperation in the future, to underpin effective and efficient cross border trading of energy commodities, emission allowances and related contracts," Efet said.
Efet said it would where necessary help the UK government, the EU, transmission system operators, regulators and others to "build on the arrangements outlined in the agreement."
The agreement was signed on December 24, leaving very little time for scrutiny in the UK parliament before the December 30 vote. Both sides claimed success in negotiations which had missed deadline after deadline owing to disagreements about the details. The referendum, in which the UK electorate voted narrowly to leave the European Union, took place in June 2016. It left the EU in January 2019 and the transition period whereby trade continues as normal ends at midnight December 31.