Despite the UK being part of the EU Single Market, trade in electricity between Great Britain and connected markets is significantly affected by differences in CO2 taxes, as well as in transmission and balancing charges. Brexit may give the UK the opportunity to adjust for this effect through import tariffs. If this happens, what would be the impact on the GB electricity market and trade in electricity? To answer this question, Oxera has estimated the likely changes using its electricity market dispatch model.
The electricity market in Great Britain is part of the EU Single Market. Great Britain is connected to Continental Europe via interconnectors to France (IFA) and the Netherlands (BritNed) of 2GW and 1GW capacity, respectively. Wholesale power prices in Great Britain are approximately 20% higher than in the Netherlands and almost 40% higher than in France; thus, electricity is mainly imported into Great Britain via these interconnectors and exports are relatively infrequent. Average hourly net imports from France and the Netherlands are 2,240MW. This is equivalent to around 70% of the planned capacity of Hinkley Point C.
Contact: Jostein Kristensen