Brexit and the Energy Trilemma
Markets, particularly energy markets, need security. Indeed its one of the three legs of the energy trilemma affecting Ireland. The other two are competitiveness and sustainability. The Institute of International and European affairs has published a considered piece on post Brexit energy issues – “What does Brexit mean for the Energy sector in Ireland”
It concludes that one of the biggest effects of Brexit on the energy sector has been investor insecurity. That has translated into a major switch off in investment. In July -just after Brexit – investment was down 20% . Comparing September 2016 to the previous year – figures were down 44.5%. Big percentages reflecting multi-millions.
Ireland’s single energy market (SEM) has developed outside of any European directive but the authors point out there are potential concerns for the continued operation of the SEM in the wake of Brexit such as security of supply, interconnectivity, and the data protection implications of running a cross-border market between an EU a non-EU state. And it also puts question marks over the next iteration of the SEM model.
On interconnectivity it adds that delayed PCI (Projects of Common Interest) construction and a drying-up of EFSI funding from the EU for UK-Ireland projects may expedite the completion of the Celtic Interconnector project currently under consultation between Ireland and France.