Brexit Decision Time
Brexit Decision Time
This is a crunch week in the Brexit saga we assume – although many other such weeks have been and gone with the can kicked a little further down the road. Tomorrow the House of Commons will vote on a motion relating to section 13(1)(b) of the European Union (Withdrawal) Act 2018 asking whether the Prime Minister’s deal should be approved, and should it not be approved MPs have been promised a vote on a “No Deal” exit or alternatively a delay to Brexit.
Last week the five remaining pieces of secondary legislation relating to Brexit and energy were passed by the UK parliament. On the other side of the Irish sea the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Bill 2019 was passed by Dáil Éireann on 6 March, and now moves onto the next stage. Part 4 of the Bill relates to electricity licences in the case of a “No Deal” Brexit, and alters the Electricity Regulation Act 1999 to grant the CRU powers to amend licences – one presumes the System Operator licence and generator licences being the particular targets.
The newly inserted amending power is phrased as being only in order to enable the State to comply with the various EU energy market rules. Note that it is NOT phrased as the power to alter licences to permit the SEM to continue in its current form – indeed Brian Stanley’s (SF, Laois) amendment requiring the SEM Committee to “[ensure] regulatory alignment” and “aim to maintain the single electricity market” was resisted by the Irish government on technical grounds, but also because the whole point of Part 4, reading between the lines, is to enable licencees to lawfully NOT implement the current SEM, which otherwise they would have to.
So what is it all about? Well firstly Richard Bruton talked about a desire to mitigate against any “unexpected, sudden events disrupt[ing] the market”. This is maybe generators or others attempting to exploit any newfound market power as a result of Brexit. In addition in a “No Deal” scenario Ireland will presumably be expecting a lot of support from Brussels and the EU27, so will have to be the best boys in class in terms of EU rules implementation. Finally, as Eamonn Ryan and others noted during debates on the Bill, there is a belief among policy makers that Northern Ireland is due a capacity squeeze, and that Ireland is therefore in a strong position to use the SEM as leverage.
All of the above may or may not be academic if the House of Commons chooses to back the Withdrawal Agreement, or extend Article 50, which we should hopefully have a better idea about by tomorrow night.