In a technical notice laying out the implications for electricity trading in a no-deal Brexit scenario, the government said there was a risk that the electricity markets of Ireland and Northern Ireland would be separated.
Currently Northern Ireland shares a wholesale electricity market with Ireland, operating within the framework of common EU rules on energy markets. Although the government said it was taking “all possible measures” to maintain the single electricity market, it acknowledged there was a risk that it would be unable to continue.
“Separate Ireland and Northern Ireland markets will be less efficient, with potential effects for producers and consumers on both sides of the border,” the government said.
Existing legal powers could be used to maintain market operation in such a scenario. Additional legal powers may be required to ensure security of supply, although the government did not specify exactly what these would include.
The government also said interconnectors, UK market participants and the organisations which administer industry codes, such as National Grid, would need to work with stakeholders to prepare alternative arrangements and rules for electricity trading. Energy regulator Ofgem is to lead the process of updating industry codes.
UK market participants will need to register under the Regulation on Energy Market Integrity and Transparency with an EU regulatory authority for the purposes of market monitoring to avoid a disruption to cross-border trade, trade within EU wholesale energy markets, or trade within the Irish Single Electricity Market.