Grid power and energy security formed a major backdrop to today’s first UK–EU Summit – in which leaders hailed a new era of collaboration, five years after the UK’s departure from the EU.
In a joint conference, UK Prime Minister Keir Starmer and European Commission President Ursula von der Leyen announced cooperation across security, defence and industry.
One of the most eye-catching proposals in the energy sphere involves exploring the UK’s participation in the EU’s electricity market.
President von der Leyen said, “It is good for the stability of energy flows. It is good for our common energy security. Because we know that a bigger market will also be good for lowering the energy prices and it will attract more private investment because of the regulatory stability and predictability. We need to tap into the vast potential that the North Sea offers, specifically for renewable, cheap and homegrown energy.”
In another potentially important cross-border scaling move, both the UK and EU will welcome continued technical regulatory exchanges on new energy technologies such as hydrogen, carbon capture, utilisation and storage and biomethane.
Other measures include linking Emissions Trading Schemes which will improve the UK’s energy security and avoid businesses being hit by the EU carbon tax due to come in next year, saving around £800m, according to a UK government statement.
The Trade and Cooperation Agreement enables cooperation on energy between the EU and the UK, and sets rules to facilitate trading energy and raw materials across borders, providing cooperation in terms of network development (especially in the North Seas Energy Cooperation) and between transmission system operators and regulators.
The EU and the UK agreed to safeguard tariff-free trade in steel products.
Energy security leads agenda
Following the recent blackouts in the Iberian peninsula and the launch of a roadmap to phase out Russian fossil fuels, combined with the ongoing Ukraine war, energy security remains of uppermost importance for both parties.
The summit is an opportunity to set a forward agenda on energy transition cooperation, by ensuring power markets can run seamlessly and through commitments to a timetable and leadership track to support the fast build-out of the North Seas grid and other mechanisms to speed the energy transition.
Manon Dufour, Executive Director of E3G (Brussels), an independent climate change think tank, said the geopolitical context calls for UK and EU to put aside any residual differences and work together on common challenges.
“Agreeing a forward agenda for cooperation on decarbonisation and the energy transition can contribute to lasting security and competitiveness on both sides of the Channel,” she said.
“Strong signals from UK and EU leaders would also boost confidence in international climate cooperation, at a time when the multilateral order is under strain.”
Ed Matthew, Director of UK Programme at E3G, said deepening collaboration on the transition to clean energy could help the UK and Europe to accelerate the path to energy independence and cut costs.
“The Russian invasion of Ukraine has caused economic devastation across Europe by causing oil and gas prices to skyrocket,” he said.
“The only way for Europe to insulate against future price shocks is to move to a renewables-based energy system with strong interconnection.”
The European Commission’s Spring 2025 economic forecast projects real GDP to grow by 1.1% in 2025 in the EU and 0.9% in the euro area, broadly the same pace as recorded in 2024. In 2026, growth is expected to accelerate to 1.5% in the EU and 1.4% in the euro area. Uncertainty, more so than tariffs, weighs on domestic demand.
Global growth outside the EU is now projected at 3.2% for 2025 and 2026, down from the 3.6% rate forecast in autumn 2024, reflecting a weakened outlook for the US and China.
“Risks to the outlook are tilted to the downside. Further fragmentation of global trade could mitigate GDP growth and reignite inflationary pressures. Climate-related disasters are also more frequent and remain a persistent source of downside risk for growth,” according to a statement.
“On the upside, further de-escalation of EU-US trade tensions or faster expansion of the EU’s trade with other countries, including through new free trade agreements, could sustain EU growth.”
Multilateral cooperation and development budgets are under strain following moves from the new US administration.
The summit is an opportunity to showcase that Europe as a whole is staying the course, aligning climate diplomacy objectives, financing the climate transition, and setting concrete examples on carbon pricing cooperation.
This will send a strong signal ahead of COP30, hosted by Brazil later this year, and UK and EU–China summits in the summer.
The cause of the Iberian peninsula blackout is still under investigation. Initial reports suggest it was triggered by a series of power generation losses in south-west Spain, potentially involving large solar installations.
These losses, coupled with the limited availability of conventional generation and reduced support from the French grid, may have created the conditions for the massive power outage.
