Yellowhammer – Is there really a risk of energy price increases, or is this bird a red herring?
There have been some alarming reports in the media today about the risk of significant increases in electricity prices supposedly highlighted in the government’s Yellowhammer report on no deal Brexit impacts. I believe these are the result of misunderstanding the relevant text (below).
- Demand for energy will be met and there will be no disruption to electricity or gas interconnectors. In NI there will be not be immediate disruption to electricity supply on Day 1. A rapid SEM [Single Electricity Market] split could occur months or years after EU Exit. In this event, there would not be security of supply issues. However, there will likely be significant electricity price increases for consumers (business and domestic), with associated wider economic and political impacts. Some participants could exit the market, thereby exacerbating the economic and political impacts. (BEIS)
The document refers to the risk of ‘significant increases in electricity prices’ in Northern Ireland specifically, and then only in the event of a rapid split in the all-Ireland Single Electricity Market – something both the UK and Irish governments are intent on avoiding. There would be NO material effect on the GB electricity market either way.