The impact of brexit on the UK’s energy supplies

nuke-crop

Figure 1: Brexit presents many challenges to the energy industry [FP, 2017]

With brexit negotiations more or less complete and the post-brexit landscape a little clearer (well as clear as its going to get anyway!), it might a good time to review the likely impact of brexit on the UK’s energy supplies. In a nutshell, the UK, assuming May’s deal stands, will be leaving the single market for energy, ending freedom of movement and leaving Euroatom. No deal essentially means the same but with no negotiated replacement and the UK at odds with Brussels over unpaid bills.

In the short term the UK may face various challenges. For example balancing the grid in the event that say, we are cut off from European energy supplies (due to a no-deal brexit, or because of a disagreement over the UK’s exit bill). Longer term there is the issue of not just meeting the UK’s rising energy demand, but also meeting the commitments it is legally bound by under the terms the Paris climate accords.

No Deal, No Gas?

The government does not expect gas supplies to be interrupted post-brexit even in a no deal scenario. Although their logic seems to be more based on the assumption that the EU will honour existing agreements (in a scenario where the UK might not be, worth reading the EU’s preparedness notices on energy on this point as that doesn’t seem to match what the UK is saying).

That said, if gas supplies were interrupted there’s not a lot that can be done anyway. The UK imports 56% of its gas, 47% of it via the EU or from Norway. Recall Norway is a member of the EEA (and a contributor to the EU’s budget and thus will be caught up in events if the UK refuses to pay its exit bill) and has already made clear they what to preserve the integrity of the single market.

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Figure 2: UK gas imports and production [British Gas, 2017]

What about reserves? The UK used to hold 4.3 bcm (billion cubic meters) of gas in reserve (equal to about 14 days supplied at winter demand). However, the decision to close the Rough facility last year, cuts this back to roughly 1.3 bcm, only enough to meet a few days supply.

rough_deal

Figure 3: The closure of the Rough facility has cut the UK’s gas reserves to some of the lowest in the EU…you somehow they need us more than we need them!

Therefore, any supply interruption, particularly if it occurs in winter, will have an impact relatively quickly. And recall, even in the event of the UK getting a good deal from Brussels, there are other things that can cause supply interruptions (e.g. a certain Mr Putin, putting the boot in). A UK that is not part of the EU club will find its gas needs put at the back end of priorities in the event of any supply interruptions. The UK’s will be a third party at the end of the pipeline, we’ll get what’s left when everyone else has had their share.

And its worth remembering that only does gas supply much of the UK’s winter heating but also 30% of its electricity. And that 30% is crucial to balancing the grid and supplying peaking power in winter, particularly in the south of the country.

As regards electricity, brexit could see disruption to interconnectors with Europe, with Northern Ireland being the worse effected. The government has talked about masses of diesel generators as a solution (in a no deal scenario), but the sheer scale of the problem means that this would be a drop in the ocean. The UK regularly draws 3 GW of power directly from the European grid via undersea cables in the South east of the country.

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Figure 4: UK interconnectors [UK Parliament, 2014]

This is not to say that power cuts (or gas shortages) are a certainty. They will only occur if there is an interruption to supplies and either a sudden jump in demand (e.g. a late winter cold snap) or a large power station unexpectedly goes offline. While I would personally rate the odds of any blackouts as medium to low, the trouble is that if they do occur, there is no short-term solution.

We are looking at a scenario where the country will just have to cope with rolling blackouts for days or even months. Which needless to say would be massively disruptive to the economy (oh and the worse effected part of the country will be the south east…as in London…where the financial markets are based!). Hence why, regardless of the risk, its a good reason to worry about it and take some measures to mitigate it (such building more energy storage…or maybe cancel this brexit business entirely!).

Lasting damage

Longer term brexit will make it harder for the UK to maintain its energy security. For example, you’ll notice in figure 4 there are several new interconnectors planned. Well in order to get those built the UK would need some sort of mechanism to buy and sell the electricity with its neighbours. In the absence of a fully comprehensive free trade agreement with the EU that might prove problematic, meaning nobody is going to invest in such projects. And it seems doubtful they’ll get build (without government support anyway) until a trade deal with the EU is concluded. And its widely expected such talks will stretch well into the 2020’s.

No fracking unicorns

The UK’s oil and gas fields peaked in the late 1990’s and production has fallen by 58% since then. Fracking has been presented as one possible solution. While there is undoubtedly a large shale resource under our feet, there’s a big difference between “resources” and economically viable “reserves. Proving the viability and developing fields will take time, at least a decade or two.

However, given that the UK will be in deficit as regards its carbon commitments post-brexit, committing to fracking will essentially require the UK to renege on the Paris climate accords. One has to question the political consequences of that, both internally and externally. The country could also face legal action, from green groups and/or the private sector.

The UK has only limited experience with fracking and would therefore need to bring in thousands of experienced “roughnecks” (rig workers) from overseas. But many of these would not meet the proposed post-brexit definition of “skilled workers” (they don’t have a degree, their wages fall below the income threshold and employment is rarely fixed). And it’s worth noting that the EU country with the most recent experience in fracking is Romania.

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Figure 5: Holy fracking mules! Fracking operations in Europe (such as this operation in Romania) have been often met with protests [Greenpeace, 2014]

Its also worth considering, that rig work tends to be employed on a journeyman contract basis. They’ll get work for a few months drilling a series of wells, then spend a period either out of work or doing something else (farm work, truck driving, etc.). This doesn’t fit in with the UK’s current immigration policy, which assumes that any workers will come in, remain in one specific job and then leave as soon as its finished (Corbyn in fact wants to go further and have them stick to one particular town or region). Within this context, its hard to see how these skill shortages will be met post-brexit. Thus its unlikely the UK can frack its way to those sunny uplands the brexiters promised.

Going critical

Brexit also presents problems for the nuclear industry. Many of the UK’s nuclear power plants are scheduled to retire in the next few years, creating the twin problem of needing to bring in workers and investment to build and then operate new reactors. Again, quite a lot of these won’t automatically count as “skilled workers”. (not everyone who works at a nuclear plant it a physicist with a white lab coat!). And the UK has long had issues recruiting new talent to this ageing industry.

Furthermore, the UK’s decision to leave Euroatom exacerbates these problems. While the UK is setting up its own equivalent, a recent audit by the ONR rated the UK’s preparations as not fit for purpose in all of the 5 categories of assessment. There is concern that this might lead to shortages of nuclear fuel and isotopes for medical use.

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Figure 6: The UK nuclear industry’s preparedness for brexit, as rated by the ONR [Sky News, 2018]

A Green Brexit?

Renewables would appear to be the way forward, as they’ve grown significantly over the last few years and we don’t need to worry about fuel supplies being cut off. However, renewables is a highly integrated industry (one that basically didn’t exist prior to the emergence of the EU), dependant on parts and labour from across Europe and the wider world. Brexit will create immediate problems within these supply chains.

There is no reason why the UK cannot develop its own renewables industry. However, for sometime now, the Tories have given very mixed signals on renewables, ranging from Trumpian anti-wind rants and rolling back of subsidies, to promising a green brexit

So to get the industry on board, the government would have to signal a firm shift in policy, e.g. a moratorium on fracking, a new carbon tax (mind you, recall the consequences of that for Macron), or an energy transformation road map (similar to those in Germany or Sweden). In the absence of this, it will prove difficult to convince the renewables industry to invest in a post-brexit Britain.

All in all, brexit presents the energy sector with significant challenges, the UK’s fate may no longer be within its own hands. Whether the lights stay on or the country ends up dependant on imports. Or reliant on foreign owned, built and financed energy sources will depend on decisions made in other countries and capitals, notably in Brussels. As far as energy is concerned, the UK has opted not to take control, but to relinquish it.

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About daryan12

Engineer, expertise: Energy, Sustainablity, Computer Aided Engineering, Renewables technology
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6 Responses to The impact of brexit on the UK’s energy supplies

  1. neilrieck says:

    LEADING scientists from across Europe have written to UK and EU leaders, urging them to agree a BREXIT deal that preserves scientific cooperation. The letter was signed by 29 Nobel laureates, including Venki Ramakrishnan, president of the Royal Society, and six winners of the Fields Medal, the biggest prize in mathematics. According to the society, the UK received €8.8 billion out of a total of €107 billion of EU research grants between 2007 and 2013. Many of the largest grants are given to consortia that span countries. “Creating new barriers to such ease of collaboration will inhibit progress, to the detriment of us all,” the letter says. The Francis Crick Institute, a medical research centre in London, revealed this week that 78 per cent of the EU scientists working there said they would be less likely to stay in the UK after BREXIT. This print article appeared on the web under the headline “Nobel laureates sign letter expressing BREXIT concerns”
    New Scientist (27 October 2018)

    • daryan12 says:

      The day after the vote we had several collaborative research grant applications which went in the bin. We’ve lost several research staff through either them moving to the EU, or their contracts not getting renewed (and then they left for Europe). And some UK uni’s have laid off hundreds due to brexit, which of course hasn’t happened. We can still get research money, its just we know there’s a cliff edge coming. And the idea that the UK government is going to find £170 million a week to fund R&D (we know how highly they rate experts), seems unlikely. And of course there’s lots of private firms who benefit from that money, as often the EU will want some commercial partners signed on to the research. So yep we are kind of screwed. Not even sure how long I’d be here for post-brexit.

  2. yorkshireman says:

    I’ve noticed the wording “we do not expect” occuring many times. Likewise in my correspondence with them about UK pensions overseas, which 3 million people have a vested interest in. “We do not expect anything to change” etc etc. The bottom line is, the government have not done any homework on the full impact of Brexit and have no idea what implications Brexit will have on anything outside the financial institutions.

    • daryan12 says:

      Its pretty clear to me that the government to no preperation before enacting article 50, indeed they only really started to prepare for brexit a few months ago when it became obvious their “have cake & eat it” strategy wasn’t going to work.

      Now while it is true, there might not be any significant immediate impact (longer term its a different story of course), the trouble is, as I mention with regard to energy, if something does go wrong, there’s no obvious solution….other than run around in a panic and blame Brussels for everything.

  3. Pingback: Brexit and Immigration | daryanblog

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