All-island electricity industry calls for transition period following Brexit

The all-island electricity industry is calling for the UK and EU to urgently agree to a transition period following UK withdrawal from the EU in March 2019, to safeguard the Single Electricity Market (SEM).

The Electricity Association of Ireland (EAI) says it is greatly concerned time is running out for the UK and EU to negotiate their shared commitment to maintaining the SEM on the island of Ireland. The representative body for the all-island electricity sector urges confirmation of an extension to the current negotiating period, by the end of this year, to provide market stability and maintain investor confidence.

EAI Chief Executive Owen Wilson said:

“We are asking negotiators on both sides to recognise the mutual advantages that an integrated market offers in terms of secure, reliable and safe electricity (and gas) supplies. These are critical facilitators for economic growth. Given the pace of negotiations to date it seems unlikely Phase 2 of the Brexit negotiations - which will address the future EU/UK trading relationships including energy - will start before the end of this year at the earliest. Consequently, we believe there is insufficient time remaining in the period to March 2019 for an energy trading arrangement to be agreed and implemented, including provisions for the continuation of the SEM. We therefore consider it imperative that a reasonable period of time beyond this date is agreed by the parties to cover both the detailed negotiations and the implementation of consequential processes.”

In its most recent position paper Objectives for a Brexit Transition EAI sets out the all-island electricity industry’s view on the process of negotiating for continued UK access to the EU internal energy market, and the objectives which it believes should inform these negotiations:

  • The Transition period must be sufficient to allow an energy trade agreement be made and to allow all stakeholders i.e. market participants, regulators and policy-makers, to achieve an appropriate level of readiness prior to the change-over to the new arrangements;
  • Only those policy issues that relate directly to the free and fair trading of energy should be the subject of a trading agreement;
  • Legal clarity must be provided regarding:
    • continuation of the SEM on the island of Ireland;
    • continued participation by the UK in the EU ETS at least until the end of Phase III (2020)
    • the applicability of EU Network Codes and related IEM regulations to Ireland following UK transition to Third Country status;
    • the validity of contracts established prior to 29 March 2019, and during the transition period and;
    • the governance during the transition period in the absence of continued direct linkage to the IEM and;
  • Unrestricted movement of skilled personnel to and from the EU and UK must be preserved.

The SEM has delivered significant benefits on an all-island basis in terms of market efficiencies, cost savings and enhanced security, and represents a positive manifestation of the Good Friday Agreement. As the market transitions to I-SEM in 2018, further potential benefits are set to be realised including more efficient use of electricity interconnections with Great Britain, which will help underpin key investment projects. EAI is of the view it is important that the delivery of these benefits is not undermined by Brexit.

Further information

Objectives for a Brexit Transition (November 2017)

EAI Position Statement on BREXIT (March 2017)