BRUSSELS INSIDER #1 - August 28, 2018
“A scenario in which the UK leaves the EU without agreement (a ‘no deal’ scenario) remains unlikely given the mutual interests of the UK and the EU in securing a negotiated outcome”, the UK government stated hopefully in a “guidance document” on “Civil nuclear regulation if there’s no Brexit deal”, published on 23 August.
That optimistic assessment is not, of course, shared by everyone. Just in case a no-deal Brexit does happen, the document states how the nuclear sector should prepare itself. It covers:
- nuclear safeguards
- ownership and movement of nuclear material, equipment and technology
- management of spent fuel and radioactive waste
- reporting and notifications to the European Commission
World Nuclear News explains that “The European Commission currently implements nuclear safeguards in respect of nuclear material for all EU countries including the UK. In the absence of a deal, a new domestic nuclear safeguards regime will come into force on the UK’s exit from the EU, the document says. This will be run by the Office of Nuclear Regulation (ONR) and is not dependent on there being a deal with the EU and Euratom. UK operators have already been invited to submit their views on the draft safeguards regulations under a consultation launched in July by the Department for Business, Energy and Industrial Strategy.”
According to WNN, “all special fissile material – plutonium-239, uranium-233, uranium enriched in the isotopes 235 or 233 or material containing them – in the EU is currently legally ‘owned’ by Euratom: operators have the right to use material to which they hold legal title only if they comply with obligations under the Euratom Treaty. If there is no deal, after 29 March Euratom ownership of special fissile material in the UK will end and the UK will have full ownership from that date.”
“Euratom Supply Agency approval would no longer be required for contracts agreed by UK operators unless they involve an EU-27 established operator. Some existing contracts – including those which have a supply period extending beyond 29 March 2019 – will therefore need to be re-approved as a result of the UK’s withdrawal.”
“In the absence of a deal, operators may need to obtain licences to import nuclear materials from EU countries, for which an import licence is not currently needed”, notes WNN. “Operators would still, as now, be required to obtain export licences for certain sensitive nuclear materials, facilities and equipment to EU countries.”
Bilateral nuclear cooperation agreements with third countries – some of which have already been signed – are on track to be completed before the UK leaves the EU, the guidance notes. “This will ensure that civil nuclear trade can continue unimpeded,” it says.
In the absence of a deal, “UK operators will no longer need to receive a positive opinion from the European Commission before going ahead with radioactive waste disposal plans, nor will they need to inform the Commission of investment projects in the UK nuclear sector.”
The “guidance” documents published by the UK government on 23 August do not refer to the electricity or gas markets, but as it turns out, Energy and Clean Growth minister Claire Perry published a letter on 14 August, which discusses what will happen to electricity and gas regulation in the case of a no-deal Brexit (thanks to Natural Gas World for pointing this out).
The Department of Business, Energy and Industrial Strategy is preparing a “statutory instrument” (SI), writes Perry, which will transfer “limited energy-related legislative functions from the European Commission to the Secretary of State in relation to Great Britain, and to the Secretary of State and the Northern Ireland Department for the Economy in relation to Northern Ireland.”
What will happen is that when the UK leaves the EU, “the Withdrawal Act will integrate EU law into domestic law”. The SI will “amend retained EU law to ensure it is operable after EU exit.”
The SI applies to three energy areas:
- electricity and gas network codes
- the Regulation on wholesale Energy Market Integrity and Transparency (REMIT)
- the Security of Gas Supply Regulation
With regard to the EU electricity and gas network codes, most of those have been transcribed into UK law already. However, a number of provisions will apply from a date after exit day “and will therefore not automatically become retained EU law”, writes Perry. Here is where the SI will come in: it “includes powers to create, in limited circumstances, new Network Codes (a body of tertiary EU legislation setting out detailed rules governing the Electricity and Gas markets, which will become retained EU law), and to amend where necessary aspects of the Network Codes in response to future developments in the energy sector.”
But this power to ‘create’ Network Codes will be limited to bringing into UK law the provisions that apply after the exit date. “It could not be used to create wholly new Network Codes”, writes Perry.
The second set of Commission legislative functions which this SI transfers to the Secretary of State, in Northern Ireland alongside the Department for the Economy, “allows amendments to definitions and reporting requirements under the Regulation on wholesale Energy Market Integrity and Transparency (REMIT).”
“The third set of functions” to which the SI applies “allows amendments to reporting templates under the Security of Gas Supply Regulation. The ability to update all of these is necessary to ensure the UK’s market abuse prevention mechanisms and plans and risk assessments for ensuring security of gas supply can be kept up-to-date.”
“Any amendments made using these powers, which are not time limited, are likely to be of a minor and technical nature”, Perry adds that this “third set of functions” is “transferred to the Secretary of State alone”. In other words, the Department for the Economy of Northern Ireland has no say over the UK’s security of gas supply.