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The further economic consequences of Brexit: energy

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  • Michael Pollitt

    (EPRG, Cambridge Judge Business School, University of Cambridge)

Abstract

:The UK left the European single market in energy on 31 December 2020, having been a leading light in its promotion. It entered into a new energy relationship with the EU-27 as outlined in the EU–UK Trade and Cooperation Agreement (TCA) on 1 January 2021. This paper discusses what has happened to the UK energy sector since the Brexit referendum of June 2016. Since our previous paper on this topic in 2017, there has been a significant clarification in the impact of Brexit on the energy sector in the UK. We outline what the TCA says about energy. We then discuss the current and potential future effects of Brexit on the UK electricity and gas systems in turn. We observe that the likely economic welfare impacts on electricity are larger than the impacts on gas, but the overall microeconomic impact appears likely to be modest (but negative). We offer a number of concluding observations.
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Suggested Citation

  • Michael Pollitt, 2021. "The further economic consequences of Brexit: energy," Working Papers EPRG2120, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    • Handle: RePEc:enp:wpaper:eprg2120
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    References listed on IDEAS

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    1. Augustine O. Ifelebuegu & Kenneth E. Aidelojie & Elijah Acquah-Andoh, 2017. "Brexit and Article 50 of the Treaty of the European Union: Implications for UK Energy Policy and Security," Energies, MDPI, vol. 10(12), pages 1-15, December.
    2. Guo, Bowei & Newbery, David, 2021. "The cost of uncoupling GB interconnectors," Energy Policy, Elsevier, vol. 158(C).
    3. Michael G. Pollitt, 2017. "The economic consequences of Brexit: energy," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 33(suppl_1), pages 134-143.
    4. Geske, Joachim & Green, Richard & Staffell, Iain, 2020. "Elecxit: The cost of bilaterally uncoupling British-EU electricity trade," Energy Economics, Elsevier, vol. 85(C).
    5. Rocco, Matteo V. & Guevara, Zeus & Heun, Matthew Kuperus, 2020. "Assessing energy and economic impacts of large-scale policy shocks based on Input-Output analysis: Application to Brexit," Applied Energy, Elsevier, vol. 274(C).
    6. Cairney, Paul & McHarg, Aileen & McEwen, Nicola & Turner, Karen, 2019. "How to conceptualise energy law and policy for an interdisciplinary audience: The case of post-Brexit UK," Energy Policy, Elsevier, vol. 129(C), pages 459-466.
    7. Philip Mayer & Christopher Stephen Ball & Stefan Vögele & Wilhelm Kuckshinrichs & Dirk Rübbelke, 2019. "Analyzing Brexit: Implications for the Electricity System of Great Britain," Energies, MDPI, vol. 12(17), pages 1-27, August.
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    Cited by:

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    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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