Fall-back access rules have been agreed for three electricity interconnectors linking the GB market with its continental neighbours. The rules will apply in the event of a ‘no-deal’ Brexit. There are access rules for the IFA link with France, the Britned link with the Netherlands and the Nemo link with Belgium.
While GB is part of the EU’s Internal Energy Market (IEM), power contracts between GB and European parties include so-called ‘implicit’ Interconnector allocation. But if the UK exits the EU with no deal it will no longer be part of IEM and, among other issues, the markets will be decoupled and there will no longer be a single reference price generated for the border. Instead, ‘explicit’ capacity allocation will be required in which Interconnector capacity is booked separately. The new access rules, agreed by continental regulators as well as Ofgem, will provide a framework for these trades. The change will, however, mean trades between GB and neighbouring markets are no longer ‘frictionless’ and will raise costs.
Further reading
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