Electricity Trading (Development of Technical Procedures) (Day-Ahead Market Timeframe) Regulations 2021

Lord Oates Excerpts

Tuesday 18th May 2021 Grand Committee

[Lord Oates (LD)]

My Lords, I am honoured to be in such a select group of noble Lords debating these regulations. I thank the Minister for his explanation of them.

If I did not already deeply regret the UK’s exit from the European Union, then having to get my head around this statutory instrument would surely have converted even the most ardent Brexiteer to the most ardent remainer. We are confronted by such tortuous statements as:

“cross-border electricity trading arrangements at the day-ahead market timeframe that will replace previous market coupling … will be based on the concept of ‘multi-region loose volume coupling’, where cross-border transmission … on an interconnector and electricity are auctioned together and the energy market in Great Britain maintains independence.”

That is not even from the SI; it is from the Explanatory Memorandum.

Can the Minister help us out a little here, on what is obviously a fairly technical measure? Can he tell us whether the proposed

“multi-region loose following coupling”

is preferable to the previous market coupling? Is this change between the two types of coupling taking place simply between the UK and the single energy market—is it happening because we are no longer part of the European Union and as part of the arrangements under the trade and co-operation agreement—or is it part of a broader change within the European single energy market?

I think the Minister confirmed in his opening remarks that Northern Ireland is not within the scope of the regulations. That certainly seems to be the case from what I have read. Northern Ireland will therefore continue to be governed by the single energy market rules. He has told us how he has consulted the Northern Ireland Executive on these regulations, but how are the Northern Ireland Executive and Assembly involved and able to make representations on the single European energy market, under which, if I have understood this properly, they are still governed? How will they be consulted as we develop these proposals and what practical impact will they have on them anyway, if they are part of the single European energy market? Can he also indicate how long it will take to put the new arrangements in place, given that they will obviously involve some fairly complex technical discussions between a range of stakeholders, domestically and within the European Union?

Paragraph 7.16 of the Explanatory Memorandum tells us that

“Placing obligations on relevant persons is not sufficient by itself to ensure that technical procedures are developed without delay”


and that “An appropriate enforcement mechanism” is therefore

“necessary to act against non-performance. The instrument applies Section 25 of the Electricity Act 1989”

in this respect. I have looked at Section 25 of the Electricity Act 1989 and it did not enlighten me particularly. Can the Minister explain to us what the enforcement procedures under Section 25 of that Act are and what the sanctions are? Section 25 refers to the notices that may be issued to relevant persons but says nothing about the sanctions if they are not complied with. I am happy for him to write to me on any of this because it is obviously a technical error.

The final question I have for the Minister is this. Throughout the documentation, there are references to the trade and co-operation agreement—the Minister has explained that the references have been amended because of the changes in the final version of the TCA. Paragraph 8 of the Explanatory Memorandum tells us:

“This instrument does not relate to withdrawal from the European Union.”


I am slightly at a loss as to that. Can the Minister explain how it does not relate to our withdrawal, when it seems so bound up with the fact that we are no longer part of the single energy market? That refers back to my first question: would this be happening anyway if we were within the European Union?