UK-EU Electricity Deal Could Lower Northern Ireland Wholesale Power Prices

Northern Ireland's energy regulator has told lawmakers that wholesale electricity prices in the region are 20 percent higher as a result of market changes following Brexit. The regulator said those wholesale costs account for about half of a typical consumer bill, meaning a 20 percent reduction would produce significant savings for households.

The prime minister held talks this week with European Commission President Ursula von der Leyen. In a joint statement the two said they looked forward to a UK-EU summit later this year where an electricity deal could be discussed. They added that they agreed on the importance of being ambitious in what could be achieved together for the benefit of both sides.

Northern Ireland forms a Single Electricity Market with the Republic of Ireland. That market was designed to integrate with the EU Internal Energy Market. Before Brexit both the Single Electricity Market and the Great Britain market participated in the EU's market coupling system using shared software and legal rules.

Trading across undersea interconnectors still occurs but in a more cumbersome and expensive manner. The regulator said wholesale prices on the island of Ireland are currently 20 percent more expensive than those in Great Britain. The regulator stated that recoupling would probably produce up to a 20 percent reduction in wholesale electricity prices in Northern Ireland.

The regulator added that successfully tackling the issue would be a huge benefit.

The island of Ireland has no direct electricity interconnection to the European Union at present. A link between Cork and France is under construction but is not scheduled to begin operating until 2028. As a result any electricity flow from the EU currently passes through the decoupled Great Britain market.