A no-deal Brexit that would decouple the GB electricity market from the EU’s market could carry a penalty for GB of £270 million a year by 2030, according to a paper from UKERC researchers Dr Joachim Geske, Professor Richard Green and Dr Iain Staffell of Imperial College.

The authors tried to quantify the extra costs that arise when traders are dealing with markets that close at different times. That arrangement is inefficient, they say, because it forces traders to decide their cross-border trades based on anticipated, rather than actual prices. When they looked at trades between GB and France before the two markets were coupled they found that, “with traders guessing the price of electricity, errors were made, capacity went underused, and energy flowed the wrong way up to a third of the time”.

If the UK leaves the EU without a deal (and possibly under other scenarios), the GB market will uncouple from the Internal Energy Market. Meanwhile, the cost of managing the mismatch will increase as the proportion of renewable energy rises.

The authors considered likely electricity trading patterns in 2030 and compared a “soft Elecxit” with market coupling, with a “hard Elecxit” where the British and French markets are decoupled. It found that the cost of generation in the two countries would increase by £500 million (1.5% of the market value). It considered that GB would carry 60% of these losses, costing the market £270 million a year.