Electricity (Risk-Preparedness) (Amendment etc.) (EU Exit) Regulations 2020

Lord Oates Excerpts

Tuesday 3rd November 2020 Grand Committee

[Lord Oates (LD)]

My Lords, I declare my interests as set out in the register as chair of the advisory board of Weber Shandwick UK. I am grateful to the Minister for her summary of the legislation. As so often with EU exit regulations, it not only raises issues of detail in relation to the statutory instrument itself, but gives rise to a whole series of questions about our future relationship with EU member states and the extent to which the Government are prepared to work collaboratively with our European neighbours going forward. In this case, it would be to ensure the security of our electricity supply in a crisis and to provide mutual aid to neighbouring countries should they require it.

My noble friend Lord Stephen has also raised critical issues about how we get ahead of the crisis to come, particularly with regard to investment in renewables. He made the important point that we need to focus in this area, not on new nuclear. The truth is that the economics of nuclear have been destroyed by the success of renewables, largely due to the vision of the then Secretary of State for Energy and Climate Change, Ed Davey, in pursuing offshore wind in particular.

Before I turn to the broader questions, I wonder if the Minister will be able to help the Grand Committee with some of the detail of these new regulations. As she explained, the instrument makes a number of amendments to Regulation EU 2019/941. She and the Explanatory Memorandum set out that these are intended to remedy deficiencies in retained EU law by, for example, substituting references to EU institutions for references to the Secretary of State and removing obligations for the UK to provide information to EU institutions. However, a dive into the detail of the statutory instrument suggests to me that it goes beyond such necessary technical changes, and I hope that the Minister will be able to provide some clarity here.

For example, the new regulation omits Articles 5 and 6 of the existing regulation. These relate to the methodology for identifying regional electricity crises and the identification of such scenarios. This has some logic, given that we are no longer part of the regional planning framework. However, incorporated within Article 5 are the key issues to consider in identifying regional crisis scenarios, and these are then referenced in relation to national crisis scenarios under the existing Article 7. They include for example, that

“The proposed methodology shall identify electricity crisis scenarios in relation to system adequacy, system security and fuel security on the basis of at least the following risks: (a) rare and extreme natural hazards; (b) accidental hazards going beyond the N-1 security criterion and exceptional contingencies; (c) consequential hazards including the consequences of malicious attacks and of fuel shortages.”


The existing Article 7 is amended under this regulation to omit the first sentence of paragraph 3, which states that

“The national electricity crisis scenarios shall be identified on the basis of at least the risks referred to in article 5(2)”.


Presumably, this sentence is deleted on the basis that Article 5 is omitted in its entirety from the new regulations. However, this means that we no longer have any agreed minimum criteria which the Secretary of State has to apply when identifying national electricity scenarios. Can the Minister tell us what criteria the Secretary of State intends to apply? If she cannot do so, can she explain on what basis Parliament will be able to determine whether the Secretary of State has discharged his responsibilities properly in this regard?

Secondly, the new regulation omits paragraph 4 of the original Article 7, which requires member states to inform the Electricity Coordination Group and the Commission

“of their assessment of the risks in relation to the ownership of infrastructure relevant for security of electricity supply, and any measures taken to prevent or mitigate such risks, with an indication of why such measures are considered necessary and proportionate”.

Again, I understand the change to omit the reference to the Electricity Coordination Group and the European Commission, but why is there no provision to provide this information to Parliament? During the Brexit discussions, we heard much about a return to parliamentary sovereignty once we had left the EU, but we seem to have returned to executive dominance. Perhaps the Minister could deal with that allegation by explaining how Parliament will be kept informed on these matters.

The new regulation also omits Articles 8 and 9, relating to

“short-term and seasonal adequacy assessments”.

Naturally, these articles would need to be amended as they refer to EU institutions and a regional approach, but why are they omitted entirely rather than amended? Do we think we will be immune to short-term and seasonal adequacy challenges simply because we have left the EU? In fact, are the impacts of these not likely to be even more acute given that we are no longer part of the regional crisis framework?

Lastly, on issues of detail, can the Minister explain why the new regulation omits the second sentence of paragraph 7 of Article 10? This relates to the

“protection of the confidentiality of sensitive information”


on the basis of the principles set out under Article 19. As Article 19 is retained in amended form in the new regulation, why has this reference to the protection of information been removed? I hope the Minister will be able to address these detailed questions in her response.

However, beyond the detail is the wider issue of post-Brexit co-operation with our neighbours and friends. The new regulation omits requirements for regional and bilateral measures, but, surely, whatever one’s views of the European Union, it makes sense to have such arrangements in place both for our benefit and the purposes of mutual assistance. Can the Minister outline the Government’s approach in this regard?

The Government’s guidance on trading in electricity after 1 January 2021 makes it clear that, from that date, we will no longer be governed by EU legislation, which

“provides for efficient trade and cross-border cooperation in operating the electricity system”.

Instead, we will be reliant on alternative trading arrangements, which, less than two months from exit from the transition period, have still not been determined. Given our reliance on interconnectors and the Government’s estimate that, by 2025, they will account for nearly a quarter of all our supply, it is vital that we sort out these issues, establish a co-operative approach with our friends and neighbours, and start with regulations that adequately protect us in the event of an electricity crisis scenario being played out.