Europe's energy traders work on UK-EU links
The Netherlands-based European Federation of Energy Traders (Efet) has launched new task forces focusing on the design and operation of the wholesale electricity and gas markets in the UK and Ireland, it said March 29.
Energy trade between Great Britain, the island of Ireland and Continental Europe improves security of supply, drives cost-effective decarbonisation and benefits UK and EU consumers in the EU and UK. But following the UK's departure from the EU and last December's Trade and Co-operation Agreement (TCA), inefficiencies have arisen affecting bilateral trade.
The two most pressing issues arising from last December's TCA are the decoupling of the two UK power exchanges, giving rise to two day-ahead prices within GB. This has reduced liquidity and increased risk – to the detriment of market efficiency.
"We are keen to work with the Department for Business, Energy & Industrial Strategy and [gas and power markets regulator] Ofgem to find an enduring solution," Efet said.
On the gas side, Efet said it expected the UK's "net zero policies to become clearer. There will be important joint topics to consider relating to hydrogen, the repurposing of pipeline infrastructure, cross border trading in certificates of renewable and low carbon gases, to name a few. It is also important that we ensure that the GB gas market continues to facilitate liquidity through flexible capacity products and charging methodologies.''
Efet also said the two sides should "seriously consider" linking their emissions trading systems, and said it hoped that "discussions on linking would begin as a matter of urgency."