India markets closed
  • BSE SENSEX

    50,405.32
    -440.76 (-0.87%)
     
  • Nifty 50

    14,938.10
    -142.65 (-0.95%)
     
  • USD/INR

    73.1400
    +0.0790 (+0.11%)
     
  • Dow

    31,496.30
    +572.16 (+1.85%)
     
  • Nasdaq

    12,920.15
    +196.68 (+1.55%)
     
  • BTC-INR

    3,705,799.75
    +180,006.00 (+5.11%)
     
  • CMC Crypto 200

    982.93
    +39.75 (+4.21%)
     
  • Hang Seng

    29,098.29
    -138.50 (-0.47%)
     
  • Nikkei

    28,864.32
    -65.78 (-0.23%)
     
  • EUR/INR

    87.1346
    -0.3660 (-0.42%)
     
  • GBP/INR

    101.2188
    -0.2952 (-0.29%)
     
  • AED/INR

    19.8690
    +0.0220 (+0.11%)
     
  • INR/JPY

    1.4790
    +0.0041 (+0.28%)
     
  • SGD/INR

    54.5090
    -0.1400 (-0.26%)
     

UK electricity bills could eventually soar due to Brexit

Saleha Riaz
·3-min read
The UK’s access to the EU’s power grid is guaranteed only until 30 June 2026, after which there will be annual negotiations. Photo: Getty Images
The UK’s access to the EU’s power grid is guaranteed only until 30 June 2026, after which there will be annual negotiations. Photo: Getty

The UK, which is a net importer of electricity and gets around 8% of its power from the EU, has access to this supply as per the historic post-Brexit deal the government has just signed, but this could be in jeopardy a few years from now and cause energy bills to soar.

It has been pointed out that according to the agreement, the UK’s access to the EU’s power grid is guaranteed only until 30 June 2026, after which there will be annual negotiations. Meanwhile, the tricky and much-debated fisheries part of the deal grants EU boats access to British waters up to the same deadline of 30 June 2026.

It is possible that if the UK and EU decide to renegotiate these fishing terms, the UK’s electricity could be under jeopardy.

It is worth noting here that fishing was a crucial part of the Brexit talks, and the UK has made concessions on the matter, with a longer transition period preserving significant EU access to British waters than initially demanded by the UK.

WATCH: Why is fishing so important in Brexit talks?

John Lichfield, a journalist based in France who writes for The Guardian among other publications, warned on Twitter that “Britain faces dearer electricity and occasional black-outs if it bans EU fishing boats from its waters after 2026. This de facto power over the UK power market is handed to the EU in the post-Brexit deal which MP’s will wave almost unread through parliament today.”

He was referring to the fact that on Wednesday, the UK parliament will debate and vote on the agreement setting up new trade rules between the EU and the UK.

READ MORE: UK and European Union strike historic Brexit trade deal

Lichfield went on to say that “a senior EU source” told him the link between the fishing deal and access to energy is “more than implicit.”

“The energy deal ‘ends by default’ unless both sides agree to extend it. If the UK bans, or severely restricts, EU boats in British waters from June 30, 2026….easy access to EU energy will also end.”

This echoes a report by Bloomberg last month, which said the EU’s chief negotiator Michel Barnier “is threatening British access to the continent’s single energy market as a way of extracting concessions on fishing rights.”

The report had pointed out at the time that “without a deal, costs for British consumers could go up by £2bn ($2.6bn) a year as the UK misses out on the benefits of an integrated market, a report by the UCL European Institute shows.”

While for now a deal has been agreed, this scenario is something the UK could face in the event its supply to EU power is cut off in 2026.

Other sources supporting this possibility include the government’s leaked no-deal planning report, which predicted a marked increase in energy prices; and a report commissioned by the National Grid before the referendum that said energy bills could climb by £500m every year in the 2020s if the UK left the EU’s internal energy market.

WATCH: 10 ways to Brexit proof your finances