September 28, 2021

What was claimed

Part of the reason the UK is currently experiencing such high gas prices is because of Brexit and the UK leaving the internal energy market.

Our verdict

There is no evidence that this is a significant factor in the rise in wholesale gas prices in the UK at present.

We have seen a number of claims on Facebook that the high gas prices in the UK are largely due to Brexit, including the UK leaving the internal energy market in the UK. ‘EU.

One said that in its coverage the BBC “forgets to mention that prices have gone up as a result of Brexit and that the UK is no longer part of the EU’s internal energy market, which has kept prices in the EU low while prices in the UK are skyrocketing “, while another claims this is because” the EU has an internal energy market that subsidizes wholesale increases in energy, keeping prices low. Something we are no longer a part of because of Brexit ”.

There is no evidence that leaving the EU is a major reason behind the price increases felt in the UK.

What is the internal energy market?

The Internal Energy Market (IMM) allows the free flow of gas and electricity without restrictions or tariffs across borders between EU Member States, often via physical cables or interconnections. The EMP is essentially a subset of the EU single market.

The UK was a member of IEM until the end of the Brexit transition period, which ended on December 31, 2020. Northern Ireland continues to be part of the single electricity market with Republic of Ireland, which means all electricity on the island is purchased through a single pool and some EU regulations still apply.

Exit IEM

Tom Edwards, a senior modeler at energy market consultancy Cornwall Insight, told Full Fact: “Leaving the EU / internal energy market is unlikely to be a big factor in prices. big highs of gas and electricity that we are currently experiencing. ”

A key feature of IEM is what is called implicit allocation, i.e. the power and capacity of the interconnect cables are purchased at the same time, therefore sold together in one process. . After leaving the IEM, we now make an explicit allocation, that is, the capacity of the interconnect cable and the energy itself are purchased separately, which can lead to less efficient exchanges and higher prices.

Mr Edwards added: “The shift from an implicit allocation to an explicit allocation has caused some price divergence in both directions,” which means that the difference between prices here and in Europe is fluctuating.

“Britain is limited by how much it can import from the EU. Thus, more fundamental factors such as proximity to continental gas markets, storage levels, wind speed and availability of interconnections (which would have been the same with or without the UK leaving the EU) are the main factors of difference between prices.

“In addition, gas prices on European markets are just as high. The high prices are usually due to international (and some regional) factors.

On the reason for the rising prices in the UK, Oil & Gas UK says: “The causes are global – European gas stocks are down, supplies from Russia have declined and there is a strong demand for gas. natural liquefied from Asia.

The UK has reportedly suffered reduced winds and several nuclear units are offline. Governments of other European countries are reportedly considering measures to help consumers cope with rising gas and electricity costs.

Kwasi Kwarteng MP, Secretary of State for Business, Energy and Industrial Strategy, told parliament in a speech on September 20 that the high demand in Asia for a particular type of liquefied natural gas meant that less gas was arriving in Europe and that weather conditions in the United States had affected exports to Europe. Bloomberg reports that this was because the freezing temperatures in winter meant that this type of gas was going to Asia where sellers could get the best rates.

This article is part of our job checking for potentially fake Facebook images, videos, and stories. You can read more about it and find out how to report Facebook content here. For the purposes of this program, we have categorized this claim as missing context, as there is no evidence that Brexit and exiting the internal energy market is the driving force behind rising gas prices.


Source link