Energy sector must prepare for Halloween horror

With a no-deal Brexit increasingly likely on 31 October, the energy sector in the UK and Europe should brace itself for costly and inefficient cross-border trading, while the EU looks set to lose a driving force in decarbonisation, and a pro-nuclear voice, says Antony Froggatt of Chatham House. 

Host:

• Richard Sverrisson, Editor-in-Chief Europe, Montel.

Guests: 

• Antony Froggatt, senior research fellow, Chatham House, 
• Chris Eales, Editor France, Montel. 

Transcript

Richard Sverrisson, Editor-in-Chief Europe, Montel: 0:02

Hello listeners and welcome to the Montel Weekly podcast, bringing you energy matters in an informal setting. My name is Richard Sen, and today I'm joined by Antony Froggatt, senior Research Fellow at Chatham House here in London. Welcome, Anthony.

Antony Froggatt, senior research fellow, Chatham House: 0:15

Thank you very much.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 0:16

And by Chris Eales. Editor France at Montel. Hello, Chris.

Chris Eales, Editor France, Montel: 0:19

Hello. Thanks very much.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 0:21

It's, uh, single denim today. Is it? This is, yes, this is perfect Black. Yeah. Today we are talking Brexit. And Anthony, you are, you are quite the expert on the matter and how it relates to energy. How do you view, uh, what's going on at, at the moment? I mean, obviously we've had the resignation of trees in May, there's an election for a new leader of the conservative party. How is this playing out in terms of Brexit?

Antony Froggatt, senior research fellow, Chatham House: 0:44

So, as of Thursday. Morning. We are waiting for the first round of results for the leadership of the conservative party. And that is expected to, over the next week, whittle down from 10 down to two candidates and then we'll have a month of the hustings amongst the membership of the conservative party. Indications are that one of those will be Boris Johnson, uh, who is promoting strongly the view that we will leave in October, whatever the whatever happens, that that's his pledge. We've heard those pledges before, obviously from conservative leaders, but there seems to be a reinvigoration of that view. We'll have to see who is the other candidate, and it may be that the other candidate has a, a slightly softer view about whether or not there's a, an opportunity to extend further if there were no deal. Mm. But it definitely seems to be the case that the likelihood of leaving with no deal is increasing. And obviously that has implications across a whole range of sectors on the whole of society. But from an energy perspective, I guess there's a number of areas that are of particular importance.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 1:52

We could come back to that an I think in, in, in particular detail about how the impact, but who do you think the other candidate's likely to be in? Are they gonna be going for a more softer Brexit, do you think? I mean, there's Rory Stewart isn't there? He's he's more of a,

Antony Froggatt, senior research fellow, Chatham House: 2:05

yeah, I mean, I think there's. Three or four key candidates? Mm. I think what's likely is that what we'll see in, in the subsequent rounds is obviously reducing quite rapidly the number of candidates. Mm-hmm. And I think by the end of next week, we will probably maybe have four candidates or middle of next week have four candidates that's still in the running. Jeremy Hunt being one, Rob being another Boris Johnson. Mm-hmm and. Possibly the home secretary as well. Mm-hmm. So that sort of combination. But I think moving from there, it's unlikely we will see, I don't think people like Rory Stewart who were talking about, we won't leave under a no deal. Mm-hmm. And any circumstances, uh, I think it's almost certainly he'll get knocked out in the round and by the time this comes out, he will be out. So I, I think we're much more, in some ways, the view around May's deal. Mm-hmm. Being. One end of the discussion with leaving no deal at the other, so not moving towards more compromise. I get the sense,

Richard Sverrisson, Editor-in-Chief Europe, Montel: 3:10

and of course this is eating into valuable time as well in terms of, you know, ironing out parts of the deal or you know, the parliamentary process as well.

Antony Froggatt, senior research fellow, Chatham House: 3:18

Yeah, I mean, absolutely. One of the concerns that everyone had, even back at, starting at the beginning of the year. Was the EU institutions have their sort of four year refresh. So obviously we've had the European elections, the Parliament is, is now reforming. The groups are reforming, but at the same time, the commission, uh, has to go through it. Its new elections.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 3:40

So that's by the member, isn't it? When they'll be in place?

Antony Froggatt, senior research fellow, Chatham House: 3:43

Yes, exactly. Mm-hmm. So what will happen is. There will be elections for the, the head of the commission, and then each member state will put forward their commissioners, and then these commissioners then put in draft positions by the, the new head of the commission. And then you have parliamentary interviews or, or debates with, so whoever is being put forward to be, the energy commissioner will go before the parliaments and then we'll have a, a discussion with the. Energy Committee of the Parliament. Mm. And then the parliament as a whole has the right to either reject or accept the commission. They can't take off individual commissioners. It's, it's an all or one deal. Mm. So anyway, that, as you said, that goes on through to November. So there is a institutional questions that are also on the European level that will slow down any future relation negotiations around the relationship. But what we've seen, again is the commission this week saying. The withdrawal agreement is the only deal on the table,

Richard Sverrisson, Editor-in-Chief Europe, Montel: 4:36

and they're not likely to open up parts of that deal, are they?

Antony Froggatt, senior research fellow, Chatham House: 4:38

They've said repeatedly that they won't, whether or not there is a, if there is a new person in, in London, whether or not this significantly changes things. Mm-hmm. From my perspective, I don't see any, any indication that that's the case at the moment. Mm-hmm. But. It's politics, so we sort of have to see what happens going forward.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 4:54

Absolutely. If we can assume then that, you know, there's an increased likelihood of a hard Brexit, so if we turn that to the energy sector, I mean, what does this mean for, for example, the wholesale market and particularly I think on on Interconnectors both gas and power?

Antony Froggatt, senior research fellow, Chatham House: 5:11

Yeah, I mean, I think the Interconnectors obviously are both from a sort of hardware perspective, but also from a regulatory perspective. The connection between the two markets. And so in terms of the electricity interconnectors, I think they are more important from a regulatory perspective because what we're seeing as a process within the EU is a move towards more integration. Hmm. And that is in part driven by policies and sort of ideology in terms of we want to have a more harmonized market across the eu. But also driven by necessity in terms of as the EU seeks to decarbonize its electricity market, there is a greater percentage of renewable energy that's going onto the grid in terms of the new capacity from renewables that's going on the grid that is wind and solar, and that is a variable producer of electricity. So you need to have more flexibility in the grid to enable you to to match both the production and demand. Uh, and the wind. Uh, and so therefore, interconnectors are really important to enable you to move electricity more freely, and that requires regulatory alignment. Mm. And that's sort of what we are seeing within the eu. Is a move within the management of the interconnectors from a sort of day ahead market to one where you have intraday trading and that's about regulatory alignment. And it's

Richard Sverrisson, Editor-in-Chief Europe, Montel: 6:32

all done implicitly as well. Exactly. Mm-hmm. And so

Antony Froggatt, senior research fellow, Chatham House: 6:34

that's the way that we are moving.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 6:36

Mm-hmm.

Antony Froggatt, senior research fellow, Chatham House: 6:36

And so the question is, for the uk as this process goes ahead, where does it. Mm. Engaged. Mm-hmm. Does it wish to still be part of that train in some ways? Mm. And if so, that has implications in terms of the so-called being a rule taker, a rule setter. Mm. Because those rules will be made in Brussels. Mm. They're made by a combination of the commission, the parliament, and so E Mm and N, so G in the case of gas, but in the case of NOE, the UK will. Remain a member. Mm. But a less influential member. In the case of NOG, it won't necessarily, because it is, it is only for member states. Mm. Now these are independent bodies, so they can change their rules. Mm. But there is this narrative, or has been a narrative going around Brussels for the last two years, is don't expect a special deal.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 7:24

And look what's happening in Switzerland as well. Yeah, yeah. On the Swiss borders. I mean that's, you know, it's taken them however many years to even align their emissions trading scheme with that of the European one. So this is not a simple or straightforward or a quick process.

Antony Froggatt, senior research fellow, Chatham House: 7:37

Yeah. And Swiss case is really important from an electricity market's perspective in terms of. Switzerland geographically in the center of Europe with lots of hydro capacity and the problems that they've had in terms of integrating into the European market compared to the UK on the edge of Europe. Mm. I mean, one is much more important for the European electricity market. Mm. And so they've had problems, and that's partly about domestic laws and about willingness to comply to the aki, the, the European aki. But it just indicates that. A sector by sector approach, which is what the Swiss has, is problematic. And again, the case with the Switzerland has been affected by other political situations like the vote on immigration that stopped all negotiations. Mm-hmm. So it's obviously a less sure situation going forward, but as I said, the UK has still even to decide what it wants. I mean, if we. Go back in terms of what the government had said in the past in the various white papers and, and mansion, how speech and all these other statements. The most recent one, which was around the political declaration. Mm. So the, the withdrawal agreement and then had the politic political declaration. And within that they talked about the desire for there to be as efficient as trading as possible. What does this mean? Uh, Anthony, it's a question in some ways for the UK is does it wish to? Seek to apply to be part of the internal energy market as a, if there is a no deal Brexit, then do they want to do a special sector deal for the connected industries, as it were? Because there will be issues around data issue, about airlines, issues, about electricity and gas, which are networked industries. So we want to continue to move these things around, and it's for the benefit of everyone, but under what rules and under what jurisdictions. Do those comply to, and so it may well be that we have to have a special deal around electricity and gas trading, which will, as I said, probably involve the UK having a, to accept the rules under the Europe, potentially even the European Court of Justice for these particular. Sectors.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 9:38

Yep. That's not gonna go.

Chris Eales, Editor France, Montel: 9:39

And what, what, what impact would that then have on the, on the wholesale market? I mean, what you, you have a no deal Brexit then, and, and so all this has got to be renegotiated, basically. What would be the impact, do you think, on the flow of power across Europe?

Antony Froggatt, senior research fellow, Chatham House: 9:52

I mean, I think it's still gonna happen. Uh, I mean, and I think there are, prior to sort of the end of March, there was the countries where you had interconnectors, like the Netherlands, were changing domestic legislation to enable them to continue to trade electricity because they would be then trading with it with a non-member state. So they were preparing for a no deal agreement. And so in that way, certain things are, were put in place beforehand and, and they will still apply. Should we leave it the no deal in October? I think it's, in some ways the question is more going forward as things integrate more than where does the UK continue to, to be engaged within that? And I guess probably the worst case scenario is that trading becomes less efficient because it, you are no longer able to do, or you are not able to trade at such a flexible way. Therefore, the value of the interconnectors goes down because you can't capitalize on market. Different prices different.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 10:48

The arbitrage. Yeah. Yes. You can't

Antony Froggatt, senior research fellow, Chatham House: 10:49

rely on that because you can't capture it on the short term. So therefore the economics of it, interconnectors is less viable. And so given the fact that UK has sort of four or five gigawatts, it has four gigawatts under capacity, another which is being commissioned. Mm. But the idea was that they would then build. Maybe up to another 10 gigawatts. So there's various Norwegian ones. They're being proposed. There's Danish, there's more to France, Netherlands, even to Iceland. Mm-hmm. If the economic value that they are, that they can, can, the revenues that they can raise are less, then maybe they're less likely to be built. And so if we think the idea behind the move towards a more flexible power sector is important to decarbonize. And you can't have the interconnectors operating in the most flexible way, then that I think is to the detrimental of the system as a whole. Not just in terms of the operation of the interconnectors.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 11:41

Absolutely. I mean, I think, you know, some of these interconnect interconnectors are already being built, like the one from, from Norway. Uh, maybe they, initially they were built under the assumption that there would not be a Brexit or, and that the UK would be part of the internal energy market. Now that's changing, but I'm just wondering, Anthony, in terms of the flows, the power and gas, are we likely to see the imposition of tariffs on imports and potentially exports? Yeah, as well of energy.

Antony Froggatt, senior research fellow, Chatham House: 12:05

I don't think it's a tariff issue. Mm-hmm. I mean, I think in terms of electricity, under WTO rules, electricity doesn't have any.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 12:11

Okay.

Antony Froggatt, senior research fellow, Chatham House: 12:12

And gas is like no 0.7%. Okay. It's not a significant, it's the non tariff barriers that are much more important than the tariffs.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 12:19

Okay. That's quite unlikely. Yeah. It, Anthony, you mentioned about. The UK potentially not being part of NOG under a hard Brexit. How about the access to, you know, other regional initiatives in Europe and as well as, um, funding from the, uh, European Investment Bank?

Antony Froggatt, senior research fellow, Chatham House: 12:38

There's a wide range of different funding that the UK currently gets for the, for the energy sector. So structural funds is, is obviously in, in certain parts of the UK is quite significant. Mm-hmm. Research and development. Both of which are grants, but then there's European Investment Bank, which has been a significant funder of UK infrastructure, including energy over the last decades. Mm. We know, I mean, you can see in terms of the projects that are commissioned. So the EIB does fund to non-member states. Mm. But 80% of it's funding goes to member states. Um, and already you've seen basically a, a, a significant shift in terms of new projects and the level of funding. So before the. Deal you saw in the in the billions. Of projects that were funded in the UK and that's fallen into hundreds of millions. Mm-hmm. So it's sort of a order of magnitude sort of difference per year in terms of projects. So it's already having an effect. Yeah. Yeah.'cause projects are just not being taken forward. Yeah, yeah. Yeah. Interesting things like there's the connecting Europe facility mm-hmm. Which is designed to develop into connectors. Mm-hmm. And the UK is still getting, I mean these are small funding. Mm-hmm. These are sort of tens of millions project development finance. Mm-hmm. But because they're obviously connecting to other member states mm-hmm. Then they're still. Can be, they're still applied. Mm-hmm. So there is still some money, but it's, yeah, it's significantly reduced. Mm-hmm. So I think from a financial perspective, it's gonna be very interesting. Um, in terms of research and development, then the government has pledged to match the European, uh, levels of European funding through until 2020. But that's, yes. Very short term. Yeah. Yeah. Yeah. And so the question sort of will be for the uk will it buy into. Research and development, the EU framework program. Mm-hmm. So the next round starts in 2020. Mm-hmm. It's possible for non-member states to be part of it. Mm-hmm. But you put in what you get. So yeah.

Chris Eales, Editor France, Montel: 14:29

What about Hinkley Point and the state aid question? Yeah. What, what, what would be the impact? What could be the impact on the state aid case or the state aid? That's. You agreed for Hinley? Yeah. For the nuclear power park's being built in southwest England

Richard Sverrisson, Editor-in-Chief Europe, Montel: 14:43

at potentially the next round of the next, yeah.

Antony Froggatt, senior research fellow, Chatham House: 14:45

Yeah. I would argue that it's potentially more problematic for the UK, outside of the EU on state aid rules than in it which is, might be go against. Hmm. Interesting. Yeah. Thank you. My logic being that many of these are really political decisions. Mm. And so what happens is a government. Says we want to do this. And then there's lots of lobbying that goes on and there's, so there's political influence. Even though it's a European court, I would argue that it's political. And so the uk, if you. You would argue for Hinkley, it wasn't a bad deal that they got through 92 pounds, a megawatt hour index linked. I mean, everyone now is looking at that and going, Hmm, that's a bit generous. Yeah. Yeah. So they got what they wanted in order to get it through. Mm-hmm. Outside of the eu, if we want to be part of the internal energy market, they were gonna have to apply by the same rules. Mm. And the Parliament has at time and time again, has said that's about environmental protection. It's about market rules, et cetera, et cetera. But we will have less political influence. Mm-hmm. So maybe when we come round to future reactors, they'll have to comply by state aid rules, but be less influential within the decision making. Okay. But if, if we see what's happened to date mm-hmm. The UK government has, on terms of the energy sector, got what he wanted, the, the. Brussels hasn't been an impediment to giving the, the industry the support structures that it wanted to.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 16:05

Some would even argue that it's been fairly weak in terms of state aid more generally. Uh, it's very rarely laid down. Yeah. There's not many

Antony Froggatt, senior research fellow, Chatham House: 16:12

cases where, where they've said no, there's been somewhere they might have to adjust things. Exactly. But as I said in, in terms of. The current view really, of what Hinkley was outside of EDF and Bays. There's nobody who thinks that this is a really good deal for the go for, for the consumer bays being

Richard Sverrisson, Editor-in-Chief Europe, Montel: 16:27

the, the, the ministry based in the department for NG. Yeah. Yeah.

Antony Froggatt, senior research fellow, Chatham House: 16:29

So, and, and other people, even the nuclear industry themselves, look at this and actually go, this isn't a good thing. Mm. Because in some ways what's happened with the future reactor, so the Hitachi and the Toshiba reaction in part, in particular, in the case of Hitachi. They were probably looking for a contract for difference of around 92 pounds. A megawatt hour becomes the benchmark, and the government's basically saying, no, we're not doing that again. We realized that was too high. Mm-hmm. And so that has created problems and, and they've walked away. So it's obviously not that simple, but I, I don't think that it was a, a good deal for anyone in terms of the strike price is so high.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 17:06

Absolutely. In terms of the en internal engine market, I mean, that's the key question. In or out. If you are in, do you then have to abide by or be under the European Court of Justice? That would be part of being, you know, in terms of the IEM,

Antony Froggatt, senior research fellow, Chatham House: 17:21

there may be, you could look to the EA countries mm-hmm. That are part of the internal energy market. They have their own, so European economic area, country mm-hmm. So like Norway, Lichtenstein, uh, and Iceland. And Iceland. So they have their own arbitration system, but. So there is

Richard Sverrisson, Editor-in-Chief Europe, Montel: 17:39

the actual after, after the supervisory order. Exactly. So, so they

Antony Froggatt, senior research fellow, Chatham House: 17:41

have an opportunity to have a slightly different system, but of course it's linked and the Swiss have a, a bilateral agreement. Mm-hmm. So there'll have to be some sort of legal framework in some ways. But the obvious one for the UK in some ways is the European Court of Justice. Mm-hmm. Or, or some. Variation of that because there's a, it's a known system, but Mm, yeah, there has to be some arbitration and that, we'll have to see what that is

Richard Sverrisson, Editor-in-Chief Europe, Montel: 18:06

in the case of Ireland, I think that's quite an interesting example. I mean, the, the single Irish market was, was launched, uh, last year. What would Brexit do to this? I mean, um, you know, would you have to look at a, a completely different regulatory, uh, oversight or another kind of regime? What do you see happening here?

Antony Froggatt, senior research fellow, Chatham House: 18:23

I mean, again, I think, I think it's a question of the governance structure. As you said, there is a joint regulatory body from North and Southern Ireland that oversees the operation of the market. Mm. And that's operates under European rules. Mm. So the options open to them are either you continue that market and there's a, there's an allowance that Northern Ireland continues to apply to the internal energy market rules. Mm-hmm. Or they have to have some special agreement with the commission that enables them to continue, not apply by it, but stay part of the market. Mm-hmm. So again, it's not really clear how this is gonna be resolved, except in some ways it is the problems that the rest of the UK faces with. The continental market, but at a much more detailed level because the integration of the systems is so much more. And so, yeah, it's a problem. And I think in particular, probably going forward with the governance systems mm-hmm. It's much more of a challenge.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 19:15

Yeah. And I mean, if you return to what you said previously, it's more. Inefficiencies and, and cost would, would probably rise. Yeah. So nobody,

Antony Froggatt, senior research fellow, Chatham House: 19:22

nobody's saying that they want to undo, well, not many people are saying they want to undo the ISM. They want to continue that process. Mm-hmm. As you said, it, it is been launched very recently. So, yeah. It, it remains a problem that people recognize that the Irish question is, is fundamental to the future. Mm. And therefore, the electricity and the, uh, sort of ICM hasn't really been top of the political agenda, but, mm. There's lots of people who are closely following this and aware that it is a problem

Richard Sverrisson, Editor-in-Chief Europe, Montel: 19:50

if, if you turn it around Anthony and, and look at, you know, the UK's been quite a driver within Europe to look at, you know, to focus more on, on, on market-based, uh, policy. Do you, how do you see Europe evolving without that influence from the uk? Will we see a Europe. That Europe that becomes more interventionist or, you know, what, what, what, what's the impact there? The other way around?

Antony Froggatt, senior research fellow, Chatham House: 20:14

Yeah. It's, it's, it's a very important question and I think there's, within the energy sector, there's a couple of areas that obviously most obvious. Initially, I think one probably is climate change. So the UK has been a strong promoter of ambitious climate change targets within the eu. In, in terms of EU legislation, it has to go through a number of steps. Mm. So you have the Parliament where the UK obviously has representation. It has 60 or 70 meps out of the, the five or 600 Mm. But it's within the council, the European Council, which is made up of a a each member state, but on some issues it's one state, one vote, but on other issues, it's under qualified majority. Mm-hmm. Whereby the. The importance of a country is based on its population. Mm. So the UK has a larger population, has, has a larger share, say than Luxembourg or, or Belgium. Mm. Uh and so it's coming outta that discussion or no longer being part of that has, has a more of a significant impact, I would argue, than say it no longer being in the European Parliament. Mm-hmm. Because of the, the, the weight. But on climate, yeah. We will potentially as a, a strong voice. Many countries coalesced around the uk. Mm-hmm. So it's interesting. We, we talked to, so for example, some of the people in Sweden mm-hmm. Who were saying, well, they really notice or have started to think about this as an issue. Mm-hmm. Because before, yeah, they, they would rely on the UK and then they could take the UK's position and they would support the uk. So who will now be that champion that other people will coalesce around?

Richard Sverrisson, Editor-in-Chief Europe, Montel: 21:47

That's very interesting. It interesting. That's very interesting. Yeah. Yeah. But the other

Antony Froggatt, senior research fellow, Chatham House: 21:49

interesting thing, which as an aside, you may not, is they talked about language is the importance of the English language will change. So for example, for the Swedish diplomats, English is obviously really important.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 22:01

They'll have love French maybe. Exactly. Yeah. Because more Laura. Exactly. Yeah. Yeah. So, or German or, yeah.

Antony Froggatt, senior research fellow, Chatham House: 22:08

In terms of the negotiation language, a lot of it is done in English. Mm-hmm. But that may be, over time, that may change because the language skills of the people that are coming in, it's, it's less important. Obviously Irish you saw, but it's just in terms of the interesting elements that you don't really think about initially that may have a knock on that, that, that's very interesting. So anyway, so I think on, in terms of climate change. It's quite important. Mm. But also, nuclear is probably, I think from a numbers perspective, is, is the most Mm. Dramatic Because the UK in some ways nuclear is more black and white. Mm-hmm. I mean, it's not, but you, you have countries that have nuclear and countries that don't have nuclear, and the way that they vote within the council is, is largely dependent on that. Mm-hmm. And if you look at the, the change in the, in the voting patterns, it may make a difference the UK being out in terms of whether or not the, the strongly pro-nuclear countries will be able to push things through. Mm-hmm. I mean, it again, it, it's never that simple. But,

Chris Eales, Editor France, Montel: 23:00

but, but nuclear was a, I mean, UK is a champion of nuclear. Exactly. So, so for to boost the, uh, the case of renewables, are you saying Well, it,

Antony Froggatt, senior research fellow, Chatham House: 23:10

I think it will probably reduce the, within the council at least, and the nuclear industry have refer to this, it will make it less likely that strongly pronuclear. Mm. Legislation will be passed through the council. Uh, does that need lead to more support for renewables? I don't know. But anyway, it's, it's just interesting as a, as a thought that, that it may, it's losing

Richard Sverrisson, Editor-in-Chief Europe, Montel: 23:34

an influential voice. Yeah. In the, the nuclear lobbyist. Yes. Yeah, absolutely.

Antony Froggatt, senior research fellow, Chatham House: 23:38

Yeah. So. And Yeah. In other areas, the, the UK has been seen as a bit of a balancer between the French and German axis really. Mm-hmm. And I think across lots of different sectors, people have thought that this may be an issue. Mm-hmm. Is that they may be the, the bo the sort of becomes much more controlled by the French and Germans going forward.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 23:56

Do you think anything good or you know, will come of Brexit? What are the opportunities for the energy sector? And we've talked mainly about the negative impacts. Yeah. I mean, uh, you know, some people must be thinking there's an opportunity for maybe cross border trading here or I dunno, importing more LNG from certain areas. I mean, what, what's your view? Yeah.

Antony Froggatt, senior research fellow, Chatham House: 24:15

Firstly, I think it doesn't have to be an upside from an energy perspective, it wasn't like the referendum was voted on because of energy. Mm. So I, I would argue that it wasn't really part of the, the discourse. So, but there are obviously things that change. It's not all gonna be negative, but I, I think that that positive things might be the development for the UK at least of more regional approaches. Mm. And I think it might be that, in particular with Norway, I think the relationship with Norway will be very important. Both from a electricity trade perspective going forward, but also in terms of, uh, dependence on fossil fuel production, offshore wind, all of these other areas. So there's a North Sea Grid initiative, which has developed under the eu, but the UK may, it's like to continue to be ENG engaged within that. And I think developing a grid initiative and a gas initiative that includes Ireland, uk, Norway. Maybe Germany, et cetera. So have that a strong offshore development would be very positive. I think that there's other areas, and one of the questions that we've raised in the past is there is the, the UK at one side in some ways looking to leave the eu. There's also countries that are looking to enter the eu. So through the energy community, uh, European energy community, there is, they're complying with mm-hmm. So they're changing their rules in order to meet the eus aki, whether or not a, sorry. The body of legislation. Okay. Body legislation. So although there are different ends in some ways of the, of the eu, will the UK seek to work in some ways with other neighborhood countries in a positive way? Because I, I would argue that what we're seeing is, is a more integrated. EU from an energy and from a climate perspective, but that shouldn't just be restricted to the member states. It it is a continental issue. Mm. And as you are moving electricity to Ukraine Mm. Baltic states, Turkey, et cetera, then having, in the same way that we've talked about in terms of the interconnectors having a, a more harmonized market across a wider continent mm-hmm. Is to the advantage of everyone. Mm-hmm. So whether not the UK plays a role within that. Mm. I think, well, I would argue that it probably should play a role.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 26:33

I mean, Anthony, we could go on, I think for hours, and I feel we've, we've, we've only really scratched the surface really of, of all matters Brexit. But thank you very much for joining the Mont podcast. It's been a pleasure having you. Uh, hope we can chat again, uh, maybe after Brexit and follow up. Um, so thank you Anthony. Please follow all the latest developments on on monto news.com, uh, and follow us on Twitter and LinkedIn. We're back next week. Thank you, and goodbye. Thank you.