Introduction

The future of UK–EU energy governance is likely to be characterised by deeper technical cooperation without a return to full political or institutional integration. Brexit removed Great Britain from the EU Internal Energy Market (IEM) from 1 January 2021, but it did not remove the physical interdependence of the two energy systems. Electricity interconnectors, gas infrastructure, offshore renewable projects, carbon markets and the shared North Sea resource continue to create strong incentives for cooperation. (Energy)

The legal foundation is principally the EU–UK Trade and Cooperation Agreement (TCA), supplemented by the Withdrawal Agreement/Windsor Framework, bilateral and regional arrangements, and regulatory cooperation between institutions such as Ofgem, EU regulatory bodies and transmission system operators. In 2025–26, the relationship began moving beyond the relatively limited post-Brexit framework: the parties agreed to extend the TCA Energy Title to March 2027, explored UK participation in the EU Internal Electricity Market, and committed to work towards linking the UK and EU emissions trading systems. (GOV.UK)

The future therefore raises an important legal question: how can the UK and EU create an integrated energy-governance system while remaining separate legal and constitutional orders?

1. Post-Brexit Legal Foundation

Before Brexit, UK electricity and gas markets were deeply integrated with the EU through EU legislation concerning market coupling, network access, competition, state aid, environmental regulation and energy security.

After Brexit, the TCA Energy Title became the principal framework for energy cooperation. It addresses:

electricity and gas trade;

security of supply;

interconnectors;

offshore renewable energy;

regulatory cooperation;

energy efficiency;

renewable energy;

cooperation on new technologies.

The EU confirms that Great Britain left the EU Internal Energy Market on 1 January 2021. Electricity trading consequently ceased to operate through the EU's ordinary market-coupling mechanisms. Instead, the parties have been working toward alternative arrangements, including Multi-Regional Loose Volume Coupling (MRLVC). (Energy)

The UK Government similarly recognises that the TCA requires the parties to develop efficient electricity-trading arrangements over interconnectors. (GOV.UK)

Legal significance

This creates a model of regulated interdependence without membership. The UK remains legally outside the EU energy market but must cooperate with EU institutions and neighbouring states because electricity physically crosses national borders.

2. Possible UK Participation in the EU Internal Electricity Market

One of the most significant future developments is the possibility of renewed UK participation in the EU Internal Electricity Market.

At the May 2025 UK–EU Summit, the parties agreed to explore UK participation in EU electricity trading platforms. (GOV.UK)

The exploratory discussions were subsequently concluded in December 2025. The UK and European Commission agreed that closer electricity cooperation was in their mutual interest and proposed working toward an EU–UK Electricity Agreement governing UK participation in the Internal Electricity Market. (GOV.UK)

The February 2026 TCA Partnership Council minutes confirm that the parties intended to begin detailed negotiations on UK participation in the IEM. (GOV.UK)

Possible legal consequences

A future electricity agreement could require:

greater alignment of electricity-market rules;

common technical standards;

cooperation between Ofgem and EU regulatory authorities;

closer cooperation between transmission system operators;

rules for cross-border capacity allocation;

mechanisms for dispute resolution;

arrangements concerning changes to EU electricity legislation;

safeguards for UK and EU regulatory autonomy.

This would create an interesting constitutional arrangement: dynamic regulatory alignment without formal EU membership.

3. Electricity Market Coupling

Electricity market coupling is likely to become one of the central subjects of future UK–EU energy governance.

Under the pre-Brexit system, electricity could be traded across borders through EU market-coupling mechanisms. Following Brexit, Great Britain became a separate market.

The EU explains that electricity trading between Great Britain and the EU continues but is less efficient because GB cannot participate in the EU's internal market-coupling mechanisms. (Energy)

The TCA therefore envisaged Multi-Regional Loose Volume Coupling.

The parties have been developing this system, but implementation has been technically and institutionally difficult. The UK Government reported in 2025 that the UK and EU transmission system operators had progressed toward concept validation while continuing to address barriers concerning electricity trading and offshore hybrid projects. (GOV.UK)

Future direction

The likely legal trajectory is from:

post-Brexit separation → loose coupling → negotiated participation in EU electricity platforms.

This is particularly important because greater renewable generation makes cross-border electricity balancing increasingly valuable.

4. North Sea Energy Governance

The North Sea may become the most important geographical focus of future UK–EU energy relations.

The UK and European states share an enormous offshore wind resource. Future projects may involve:

offshore wind farms;

interconnectors;

hybrid offshore assets;

artificial energy islands;

hydrogen production;

offshore grids;

carbon capture infrastructure.

The UK participates in North Seas Energy Cooperation (NSEC) under a 2022 Memorandum of Understanding. The UK Government states that this cooperation implements the framework contemplated by Article 321 of the TCA. (GOV.UK)

In January 2026, the UK and European partners also adopted the Hamburg Declaration, aimed at strengthening offshore renewable cooperation and supporting major joint offshore-wind development. (GOV.UK)

The future legal problem is that offshore projects can no longer be governed purely through domestic law. A single offshore renewable project may involve:

UK territorial waters + EU waters + multiple transmission systems + several national regulators + EU environmental law + UK planning law.

This will require increasingly sophisticated transnational energy governance.

5. Multi-Purpose Interconnectors

Future UK–EU cooperation is likely to move beyond conventional point-to-point electricity interconnectors.

Multi-Purpose Interconnectors (MPIs) can combine:

offshore renewable generation;

electricity transmission;

interconnection between different national markets.

The UK Government's 2026 interconnection policy identifies MPIs and offshore hybrid assets as an important part of future electricity-system development. It also acknowledges that international cooperation is necessary because these assets cross regulatory and market boundaries. (GOV.UK)

Governance challenge

An MPI may require agreement concerning:

ownership;

licensing;

transmission-system operation;

market access;

congestion revenues;

offshore planning;

environmental assessment;

cost allocation;

liability;

emergency powers;

cybersecurity.

Consequently, future UK–EU energy law may develop specialised rules for hybrid infrastructure governance.

6. Carbon Markets and UK–EU ETS Linking

Another major area is cooperation between the UK Emissions Trading Scheme (UK ETS) and the EU Emissions Trading System (EU ETS).

The 2025 UK–EU Common Understanding states that the parties should work toward an agreement linking the two carbon markets. It also identifies potential interaction with carbon border adjustment mechanisms. (GOV.UK)

In August 2025, the UK Government published material concerning the proposed negotiations on linking the UK and EU ETSs. (GOV.UK)

Why this matters

Carbon-market linkage could affect:

electricity generators;

industrial consumers;

electricity imports and exports;

carbon prices;

investment decisions;

carbon leakage;

offshore renewable projects;

hydrogen production;

carbon-border measures.

It could therefore become a major component of future UK–EU climate-energy governance.

7. Hydrogen and Decarbonised Gas

The future relationship is also likely to extend beyond electricity.

The UK and EU have identified cooperation in areas including:

hydrogen;

biomethane;

decarbonised gases;

carbon capture, utilisation and storage (CCUS).

The 2026 TCA Partnership Council recorded continued technical regulatory exchanges concerning hydrogen, CCUS and biomethane. (GOV.UK)

This will become legally important because hydrogen infrastructure can cross borders just as electricity and gas infrastructure do.

Future cooperation may therefore concern:

hydrogen certification;

guarantees of origin;

sustainability criteria;

pipeline conversion;

cross-border transportation;

storage;

state aid;

infrastructure investment;

common safety standards.

8. Energy Security and Emergency Governance

The energy crisis following Russia's invasion of Ukraine demonstrated that European energy security cannot easily be separated into national compartments.

The TCA already contains cooperation mechanisms concerning security of supply. The EU states that the agreement provides a framework for continued cooperation on electricity and gas security, which is particularly significant for Ireland because of its geographical position within the European electricity system. (Energy)

Future UK–EU governance could therefore develop mechanisms for:

emergency electricity assistance;

gas supply disruption;

coordinated demand reduction;

information sharing;

infrastructure protection;

emergency interconnector operation;

cyber incidents;

extreme weather;

critical-energy infrastructure resilience.

The major legal issue will be balancing national emergency powers against the need for coordinated cross-border action.

9. Role of Ofgem and EU Regulators

Brexit transformed the institutional structure of energy regulation.

The UK regulator Ofgem no longer operates within the EU regulatory hierarchy in the same manner as before Brexit. Nevertheless, cross-border electricity trading requires regulatory cooperation.

The UK's Strategy and Policy Statement specifically identifies Ofgem's role in facilitating cooperation with European energy regulators and implementing the energy-related provisions of the TCA. (GOV.UK)

Future governance could therefore develop a networked regulatory model, involving:

Ofgem → UK Government → European Commission → EU regulators → national regulators → TSOs → market participants.

This is different from traditional hierarchical regulation because no single institution necessarily possesses complete authority over the entire cross-border energy system.

10. Case Law: Aquind and ACER

One of the most important cases for understanding UK–EU energy governance is the Aquind litigation concerning a proposed UK–France electricity interconnector.

Aquind Ltd v ACER, Case T-735/18

The case concerned a proposed electricity interconnector between the UK and France and an application for exemption from EU rules concerning interconnectors.

The General Court considered ACER's powers and the appropriate intensity of judicial review concerning its decision-making. (InfoCuria)

The case demonstrates the importance of EU regulatory institutions in cross-border energy infrastructure.

ACER v Aquind, Case C-46/21 P

The Court of Justice subsequently considered the appeal concerning ACER's decision-making powers and review of decisions involving electricity interconnectors. The judgment was delivered on 9 March 2023. (InfoCuria)

Post-Brexit significance

Aquind is especially important because Brexit created a question about the continuing competence of EU institutions over projects involving the UK.

A later Aquind case, T-492/21, directly concerned the consequences of Brexit for ACER's competence regarding the UK–France interconnector and referred expressly to the TCA's special arrangements. (curia)

This illustrates a fundamental principle of future UK–EU energy governance:

Cross-border infrastructure requires carefully allocated jurisdictional authority.

11. Aquind and Projects of Common Interest

Another important decision is Aquind and Others v Commission, T-295/20.

The case concerned the proposed UK–France Aquind interconnector and its treatment under the EU's framework for Projects of Common Interest (PCIs).

The General Court considered questions including:

legal certainty;

legitimate expectations;

proportionality;

good administration;

equal treatment;

the Commission's role;

Member State approval of energy infrastructure.

(InfoCuria)

Future relevance

After Brexit, UK projects can no longer simply rely on the same EU infrastructure status that existed during UK membership. Future agreements may therefore need to establish alternative mechanisms for recognising strategically important UK–EU infrastructure.

12. Capacity Markets and Tempus Energy

The case Commission v Tempus Energy, C-57/19 P concerned the UK's electricity capacity market and EU State aid law.

The Court examined whether the Commission should have opened a formal investigation into the compatibility of the UK capacity-market scheme with EU State aid rules. (InfoCuria)

The case is relevant to future UK–EU energy relations because electricity-market integration inevitably raises questions concerning:

subsidies;

capacity mechanisms;

competition;

state aid;

market distortion;

decarbonisation policy.

Even after Brexit, these issues remain relevant wherever UK policies affect cross-border energy trade or where future agreements contain level-playing-field obligations.

13. PreussenElektra and Renewable Electricity Regulation

The classic CJEU judgment in PreussenElektra AG v Schleswag, C-379/98 concerned a German renewable-electricity purchasing obligation.

The Court held that the statutory renewable-energy purchasing mechanism in question did not constitute State aid merely because it was imposed by legislation. (curia)

The case is historically important for UK–EU energy governance because it demonstrates how European energy law has traditionally attempted to reconcile:

energy-market regulation + renewable-energy promotion + competition law.

Future UK–EU cooperation in offshore wind, hydrogen and clean-energy investment will face similar questions, although under a substantially different post-Brexit legal framework.

14. Future Legal Architecture

The emerging architecture can be represented as follows:

This is likely to produce a multi-layered governance system, rather than a single UK–EU energy regime.

15. Major Future Legal Challenges

A. Regulatory divergence

The UK and EU may adopt different rules for:

electricity markets;

hydrogen;

carbon pricing;

state aid/subsidies;

network regulation;

environmental standards.

The greater the divergence, the more complicated cross-border trade becomes.

B. Dynamic alignment

A future electricity agreement may need to determine what happens when the EU changes its electricity legislation.

The fundamental question will be:

Must the UK automatically follow future EU rules, negotiate each change, or retain the right to diverge?

This is simultaneously an energy-law and constitutional-law question.

C. Regulatory autonomy

The UK has emphasised that future cooperation must respect both sides' decision-making autonomy. The 2025 joint statement expressly referred to negotiations taking place within the respective legal frameworks and respecting each other's decision-making autonomy. (GOV.UK)

D. Dispute settlement

Future energy agreements will need mechanisms for resolving disputes concerning:

electricity trading;

infrastructure;

regulatory decisions;

carbon markets;

emergency measures;

market access.

Aquind demonstrates why allocation of institutional competence is particularly important.

16. Future Governance Model

The emerging model can be conceptualised as “functional reintegration without political reintegration.”

The UK is unlikely simply to recreate its pre-Brexit status. Instead, cooperation is likely to be concentrated in areas where physical interdependence makes separation inefficient.

The principal areas are likely to be:

electricity trading;

interconnection;

North Sea offshore wind;

multi-purpose interconnectors;

hydrogen;

CCUS;

carbon markets;

energy security;

regulatory cooperation;

critical infrastructure resilience.

The 2026 UK Government interconnection policy already recognises that cooperation with European partners is necessary to address inefficient electricity flows and develop future cross-border infrastructure. (GOV.UK)

Conclusion

Future UK–EU energy governance is likely to become more integrated functionally while remaining legally separate institutionally. Brexit created a formal separation from the EU Internal Energy Market, but electricity interconnection, offshore renewable development, gas infrastructure and decarbonisation make complete regulatory separation impractical.

The most important development is the move toward a possible EU–UK Electricity Agreement, following exploratory discussions completed in 2025. (GOV.UK) Alongside this, the extension of the TCA Energy Title, proposed UK–EU ETS linkage, North Sea cooperation and collaboration on hydrogen and CCUS point toward a more sophisticated transnational energy-governance framework. (GOV.UK)

The Aquind cases are particularly instructive because they demonstrate that cross-border electricity infrastructure creates difficult questions concerning regulatory competence, jurisdiction, exemptions, investment protection and the legal consequences of Brexit. (curia)

Ultimately, the future legal architecture will need to reconcile four objectives:

UK regulatory autonomy + EU regulatory autonomy + efficient cross-border energy markets + common decarbonisation and security objectives.

That combination is likely to make UK–EU energy law an important example of post-Brexit transnational regulatory governance, in which cooperation is achieved not through membership of a common legal order, but through treaties, regulatory networks, specialised committees, technical agreements and shared infrastructure.