Maintaining stable, reliable and affordable energy post-'Brexit'

In November ‘Brexit’ was named the word of the year by Collins Dictionary, reflecting how political debate has been one of the defining features of 2016. The UK’s decision in June to leave the EU will ripple beyond this year as the UK Government begins to turn the electorate’s democratic decision into action and ‘Brexit’ into a verb rather than a noun.

All attention right now is on the proposed triggering of the Article 50 process by the end of March, which will mark the start of formal negotiations.

As an energy company generating power and supplying electricity and gas across Ireland and Northern Ireland, and the second largest energy utility in each market, SSE Ireland is focussed on what ‘Brexit’ means for all of our 800,000 energy customers. The referendum result does not present any immediate changes to how we serve our customers.  Our own role remains to deliver secure and affordable flows of energy to SSE Airtricity’s household and business customers – regardless of which side of the border, hard or soft, they reside in or operate from.

As with many areas, energy policy is made against a backdrop of EU requirements.  As the UK-EU energy relationship develops, we believe the focus needs to be on choosing the path that best benefits customers. 

In an energy context, Ireland and Northern Ireland are unique, being relatively small, isolated (from an energy perspective at least!) and reliant on imported fuels.  This motivated the creation of the Single Electricity Market (SEM) back in 2008. It has allowed customers to benefit from improved market efficiencies and system stability from shared resources across the island. The SEM has successfully leveraged major investment in cleaner, greener and flexible forms of energy – SSE alone has invested almost £2billion (or €2.2billion) since its introduction in 2008 – and an integrated market should be maintained post-‘Brexit’ to safeguard future investment.

Regulators and energy companies are currently working on a suite of changes under the I-SEM (Integrated Single Electricity Market) Project to further integrate the Ireland and Northern Ireland markets and improve trading with neighbouring countries.  This project, due to go-live in 2018, will help stimulate future energy investment and importantly deliver energy cost reductions for customers in the years to come. 

Another key project to help secure stable and affordable energy supply on the island is the North-South interconnector which is intended to better connect the electricity grids of Ireland and Northern Ireland.  Delivery of this project will ensure that power can flow to where it’s needed and full advantage can be taken of the cheapest power available for consumers to benefit. Planning approval has now been secured by EirGrid from An Bord Pleanala for the project element in the Republic, while the Northern Ireland element of this important cross-border project will go before a public planning inquiry in February. While we’ve seen one positive planning decision there are still a number of key milestones to be overcome, not the least of which is the political decision from all sides to proceed.

Among the many uncertainties surrounding the UK Government’s ‘Brexit’ plan, its future energy arrangements with the EU is but one. SSE believes that important energy market infrastructure projects such as I-SEM and the North-South interconnector should be delivered, irrespective of the UK and EU political arrangements, and especially given the importance of a functioning stable and long-term energy market to all jurisdictions. 

Exchanges of letters between UK Prime Minister Theresa May and leaders in Northern Ireland demonstrate that they appreciate the importance and complexity of energy policy in a ‘Brexit’ context and the unique nature of the All Island market.  At SSE Ireland, we’re confident that arrangements can be found and our legislators and regulators will do the right thing for energy consumers across the island to safeguard current and future energy market developments.

Energy may not be the most prominent issue in the ‘Brexit’ debate, but it is critical to our future.  By keeping our focus on customer benefit, we will create a scenario where stable, reliable and affordable energy supplies are maintained and improved into the future, for the benefit of all, within and without the EU.

About the author

Stephen Wheeler Managing Director, SSE Ireland

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