Talks on reconnecting Britain to the EU's internal electricity market are gathering pace ahead of the EU-UK summit on 20 November. The leaders of Belgium, Germany, Denmark, Luxembourg and the Netherlands have called for faster progress, but according to a letter seen by Euronews they also want Britain to contribute to EU development funds in return for access. Energy minister Martin McCluskey has said no amount has been agreed and that any payment would have to deliver value for money.
At stake is how electricity flows between Britain and the continent. Britain remains physically connected to its neighbours through subsea interconnectors, but since Brexit it has traded power through less efficient arrangements outside the EU market. National Grid estimates that these less efficient trading arrangements have added around £1 billion in extra costs to cross-border electricity trading so far, and that the additional cost could reach as much as £350 million a year by 2030. These figures reflect the cost of trading outside the EU market, not direct increases in household electricity bills. Rejoining the market would allow power to flow more freely to wherever it is most needed and cheapest.
The two systems also have much to offer each other. Britain holds the largest offshore wind ambitions in the North Sea, committing to up to 50 GW of the 120 GW that nine North Sea countries are targeting by 2030. Wind tends to peak in winter while solar peaks in summer, so a better-connected grid can help each side balance its renewables and share surplus power. EU leaders see closer ties as a boost to energy security and to cross-border projects in the North Sea.
The objections centre on the terms. Britain would be expected to dynamically align with relevant EU electricity market rules, following them as they evolve, which would limit its freedom to diverge from those rules in future. The EU is also seeking a formal financial contribution, with Norway a likely model: it contributed an average of around €391 million a year to European cohesion grants during 2014 to 2021. Critics object to British taxpayer money funding projects outside the UK, and see deeper energy ties with the EU as a threat to sovereignty.
For Britain, the question is whether cheaper trading and deeper cooperation on North Sea wind are worth an annual payment and closer alignment with EU energy rules.