BREXIT: Steady as we go on climate-change issues, but role of European Court of Justice vexes Scots legal and energy experts alike

Peter Cameron, Professor of International Energy Law and Policy, and Director of the Centre for Energy, Petroleum and Mineral Law and Policy, at Dundee University.
Peter Cameron, Professor of International Energy Law

EXCLUSIVE by Scottish Energy News

The known ‘knowns’ – and ‘unknowns’ – about Brexit, the energy sector in Scotland and Scot-Govt – were the agenda of a flagship conference held by a leading energy law centre at Dundee University last week.

The conference – held by the Centre for Energy, Petroleum and Mineral Law and Policy – attracted presentations from senior civil servants, practising lawyers and legal advisers to some of the largest Scottish energy companies, national and international energy market consultancies and leading legal and energy academics.

Prof. Peter Cameron, conference chairman, and Director of the Centre for Energy, Petroleum and Mineral Law and Policy at Dundee University said: “Our aim at this conference is to lead informed, expert and <legal and academic> independent debate on energy law and policy.”

It was held on Chatham House rules – so that Scottish Energy News – is able to report on what was said but not who said it.

As far as the Scot-Govt is concerned, the view from St. Andrew’s Hoose is that general energy policy will continue pretty much as before – including the roll-out of its draft Scottish Energy Strategy – irrespective of Brexit.

This is because they key environmental legislation – the Climate Change Act 2008 – laid down the ‘big picture’ targets for reducing, and now, ultimately, eliminating, emissions of greenhouse gases.

This pre-dates the English / Westminster Act and will remain as environment issues are devolved to the Scot-parliament, so Brexit is not expected to have much, if any, impact on this area.

The government’s Scottish Energy Strategy also makes ‘big picture’ references to tackling greenhouse gas emissions from the transport and space-heating industry, also areas where legislation is partly or largely devolved to the Scot-govt.

The transport sector is responsible for more than half (53%) of greenhouse gas emissions in Scotland – and equal to electricity generation (22%) and heating (27%) combined.

While it appears likely that the US-driven BPV (battery power vehicle) industry will ‘solve’ the problem of emissions from private motor transport, the Scot-govt’s ‘biggest single challenge’ is de-carbonising C02 emissions from heating and encouraging energy storage.

De-carbonising the space-heating sector will require major investment in retro-fitting energy-efficiency and renewable energy technologies in millions of homes – because 90% of the likely housing stock in Scotland in 2050 is already built, but does not include these measures.

One leading Scottish university professor warned that both for both these issues (taxing BPVs and invasive retro-fitting in consumer homes) will require ‘difficult political decisions’ to be made and that politicians would ignore customers at their ‘peril’.

Other Scot-gov energy priorities include:

  • Security of supply (including UK-EU interconnectors0
  • Climate-change targets, and
  • Replacement of EU funding after Brexit

Meanwhile, at civil-servant-level, relations between St. Andrew’s House and Whitehall/ BEIS are ‘cordial’ and futher detail talks between these groups are due to be held this month on Brexit and energy before the Westminster parliament closes on summer recess.

Another, more vexed, issue that was discussed was the role of the European Court of Justice and determining disputes between both the UK and the remaining EU member states, and also between individual companies in the UK and EU member states.

Practising commercial lawyers raised the issue of English/ Scottish – EU jurisdiction as highly significant – and said that present uncertainty over this policy and practice is hindering investment.

A university law professor added: “The role of the EJC is a particularly ‘stick issue’ in Brexit, especially in relation to the specification of jurisdiction in bilateral commercial contracts”.

There was no clear view from the conference on how the role of the ECJ will be resolved in Brexit, although it was noted that some large organisations – such as German or Spanish utilities, for example – may simply asset their market-power and insist in inserting the ECJ as the locus for resolving contract disputes.

This is a very real issue facing, for example, Glasgow-based, but Spanish-owned Scottish Power, which is also a major energy supplier in England.

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