Brexit: potential impacts on energy markets and regulation

This briefing note reviews the possible impacts of the UK’s Brexit vote on energy regulation in the UK, in two scenarios:

• The UK re‑joins the European Economic Area (“EEA”) through membership of the European Free Trade Association (“EFTA”), becoming an EEA EFTA country like Norway, Iceland and Lichtenstein (the “EEA scenario”); and
• The UK leaves the EU and EEA, whether through a full exit, a customs union, or joining EFTA without joining the EEA like Switzerland (the “non‑EEA scenario”).

There is uncertainty over both the Brexit model that will emerge from negotiations and the relative priority that the UK Government accords consideration of the EU energy regulatory regimes, bearing in mind that EU policies largely follow principles pioneered in the UK.