European Affairs Committee — hearing of 16 June 2026: transcript & video

00:06 - 01:47

Speaker 1

Good morning and welcome to this public evidence session of the House of Lords Select Committee on European Affairs. We're looking into the issue of dynamic alignment and today we're focusing on the issue of electricity trading, one of the prospective agreements which the government has said it will negotiate. And we're delighted to welcome as our first witnesses this morning Mr. Adam Berman, who's Director of Policy and Advocacy at Energy UK, Mr. Mark Copley, who's CEO of Energy Traders Europe, and Mr. Jack Pardoe, who's Head of Policy at Octopus Energy. It's a public session, it's being broadcast, there will be a transcript produced and you will be provided with a draft to check for any errors and omissions you may find. And we hope to conclude the session by 12:00.

So with that in mind, if the questions and answers could be as concise as is reasonable, and don't feel you all have to answer every question if you've nothing to add, just say, but if you do have something to add, then of course please do. If we're content, I'll kick us off then with a general question, which is just to sort of set the scene as it were for our evidence, and that is how does electricity trading between the UK and the EU take place at present? Is work continuing on both sides to try and implement the electricity trading arrangements foreseen in the TCA, or has that really rather been superseded by the negotiations that are now underway? Who would like to start us off on that? Should we go from left to right?

01:47 - 03:16

Speaker 3

Yeah, so a very good morning to everyone. The status quo as it currently stands post-Brexit is that we have moved from what was called implicit trading through the internal energy market of the European Union to something called explicit trading. The, just to use a slightly glib analogy here, it would be like going from booking a package holiday where with one click of your mouse you book the accommodation, the transfers, the travel, some sort of excursions, to actually booking everything separately. They are different clicks, they are different processes. And so just at a more practical level, what has essentially happened is that capacity on interconnector cables is sold in advance separately from the electricity itself, and that means it's less efficient because the capacity is allocated based on forecasts rather than on real-time prices and weather conditions.

And so there is an impact of that. There's an impact of that on bill prices, there is an impact on the efficiency of that trade. And whilst there was a possible different solution envisaged within the TCA, I think it was the view of many stakeholders, including the energy industry which I represent, that that was unworkable, and that now seems to be the conclusion of both UK government and the European Commission, that that possible new solution was unworkable, and instead they are now working toward possible re-participation of the UK in the EU internal energy market.

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