The UK has confirmed European energy law will no longer apply and its electricity markets will be decoupled from the Internal Energy Market if it leaves the European Union in a so-called no-deal scenario.
In a guidance note, UK energy department BEIS said cross-border flows across interconnectors will no longer be governed by EU legislation and alternative trading arrangements and access rules will need to be developed and approved.
The UK government and Ofgem are working on such rules to be approved at a national and EU level, it added.
London will also lay statutory instruments to ensure the UK’s energy laws continue to work on day one of exit after 29 March 2019 in a no-deal scenario.
Changes likely to be required to domestic power market codes and licences will be managed by Ofgem for Great Britain and by the Northern Ireland Utility Regulator.
BEIS said it is committed to preserving the Single Electricity Market in the island of Ireland but warned of a risk that the Northern Ireland market would become separated from that of the Republic.
The Northern Ireland Utility Regulator and SONI, the Northern Ireland transmission system operator, are undertaking contingency work on how best to establish a separate Northern Ireland market.
“Negotiations are progressing well and both we and the EU continue to work hard to seek a positive deal,” said BEIS.
BEIS also produced no-deal guidance for the EU emission trading system. It said a UK-wide carbon price would replace the ETS with further information to be announced in the 2018 Budget.