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Government may be failing to consider impact on consumers bills under 'no deal' Brexit

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The government could be making decisions on the future of UK energy without considering their potential to impact consumer bills, according to a House of Lords select committee.

The EU energy and environment sub-committee has written to Claire Perry, minister of state for energy and clean growth, following her appearance before them on 23 October when she was asked about the government’s preparations for a ‘no deal’ exit from the European Union.

During the meeting, she was asked by chair Lord Teverson what estimate her department had made of the price differences to energy consumers caused by the UK’s departure from the Internal Energy Market; a feature of a ‘no deal’ Brexit.

Perry remarked that it was “a really important question” but offered little else to address the question, with a letter sent to the minister’s office yesterday (14 November) by Lord Teverson stating: “You did not answer the question.”

“We are disappointed that you were not able to respond on this issue and are concerned that the government may be making decisions without having fully considered their potential on consumers,” it continued.

The sub-committee has therefore restated the question, requesting the minister answer in greater detail.

It has also requested further information on the value of the Carbon Emissions Tax that would replace the EU Emissions Trading Scheme – set at £16 per tonne of carbon dioxide in the recent Budget – and how it was selected.

The government has also been asked to provide an update on the progress made towards securing agreement that the Integrated Single Electricity Market (I-SEM) in Ireland would be maintained in a 'no deal' scenario, and how this could be affected by its proposed carbon tax for Northern Ireland.

Previously Perry had claimed that the goal was to achieve an agreement between the Irish government and European Commission that the I-SEM will “continue in any scenario, including no deal”.

Draft deal for continuation of Irish electricity market

While Lord Teverson’s letter had complained that “no concrete information” had thus far been provided, the draft agreement on the withdrawal of the UK from the EU agreed in cabinet yesterday included specific provision for the continuation of SEM.

Article 11 of the tenuous agreement states that “the provisions of Union law governing wholesale electricity markets…shall apply, under the conditions set out therein, to and in the United Kingdom in respect of Northern Ireland”.

This would apply to generation, transmission, distribution, and supply of electricity, trading in wholesale electricity or cross-border exchanges in electricity between Northern Ireland and the Republic.

However this still does not address Lord Teverson’s concerns over a ‘no deal’ Brexit, which could still be a possibility as the draft agreement has been widely condemned by MPs from across the House of Commons, and has resulted in the resignations of six government ministers at the time of writing.

It remains to be seen if the agreement will make it through a commons vote, should this take place.

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