Richard Bruton (Dublin Bay North, Fine Gael) | Oireachtas source

I circulated a note so I will not read from it exhaustively. The Department has been considering the contingency for all our various sources of energy in the context of a hard Brexit.

We have looked at oil, gas, coal and electricity. We are content that the systems for oil, gas and coal will operate normally and without fear of significant disruption after careful examination by the regulators and various overseers.

Gas comes predominantly from Scotland and it is on what they call PRISMA software, which will continue to operate post Brexit. No tariffs are imposed by the EU on gas imports at the moment and that will continue to be the case. Having done a detailed analysis, GNI and the CRU are happy that there will be no change in cross-Border gas trade in the event of a no-deal Brexit.

The situation for electricity is more complicated. In 2007, a single electricity market was established and that is regulated under a single electricity market committee, which has regulators, North and South, and an independent and deputy independent member. They manage that platform. It is managed within European law and it is different to the gas market, which is operated on an independent software platform. There will be some impact on the sort of trading that can occur as a result of the departure of the UK from the European Union. Certain types of trade will not be able to continue. There will still be security of supply trades and what they call intra-day trades and it is believed that they will continue to support the vast majority of the flow of activity on it. However, it will not, strictly speaking, be compliant with European law and, if that continues into the medium term, we will have to negotiate and set out a new basis for the continuance of trade of the single electricity market. It is the desire of the UK, the EU and ourselves that the single electricity market should continue. It has brought great benefits, North and South. It is the only example of a fully integrated EU electricity market with a common trading platform and the UK has clearly signalled its intention, and has published legislation, to ensure, insofar as possible, that the UK will be compliant with the requirements of EU law. Nonetheless, over time, a medium-term platform will have to be put in place.

We are taking powers which we do not believe will need to be used in this legislation. They are being taken in the event that there will be a severe disruption that will lead to some unexpected market activity. We are giving the CRU the power to alter licences in the event of certain events happening. This is clearly something precautionary, rather than something we believe will be necessary, but when the full evaluation was done by the CRU and EirGrid and so on, it was believed that this would be prudent legislation.

The provision to alter licences will be considerably constrained in that it will have to have ministerial approval to say it is justified. It can only last for one year and it can only be exercised in the context of a disorderly Brexit and its commencement would be contingent on an absolute necessity being established. The legislation, which will be published on Friday, will set out the provisions in a number of sections but these are the main provisions. It is intended to make doubly sure that the CRU will have this reserve power should there be activity in the market that is not anticipated.

That is the position as I understand it. Officials accompanying me are experts in this market, including its legal and practical day-to-day dimensions. I hope we are in a position to answer any questions the committee might have.