Analyzing Brexit: Implications for the Electricity System of Great Britain

Abstract

The UK’s exit from the European Union (EU) has potential ramifications for the country’s electricity sector, given its increasing interlinkage with other EU electricity systems. Brexit could hamper the development toward higher market integration and the realization of new interconnector projects. Moreover, a fall in the value of the Pound, resulting from Brexit in the medium term, could also affect the electricity trading structure. Combining a European electricity market model and a multi-criteria decision analysis tool, this study assesses the implications of Brexit for the electricity market of Great Britain (hereafter GB) for 2030, from the perspective of (i) political decision makers, (ii) electricity consumers, and (iii) producers. Results indicate that the implications of Brexit depend on the future development of the GB electricity system and on the objectives of the respective stakeholders. Possible opportunities brought by Brexit under a low-carbon trajectory contrast with greater challenges and tradeoffs between stakeholders under alternative power system development paths. Despite increased British autonomy in energy and climate matters, there remains interdependency between British and EU energy policy.