P382 – Amendments to the BSC in the event of no-deal Brexit

Formal title: Amendments to the BSC to reflect the United Kingdom’s withdrawal from the European Union without a deal

The Balancing and Settlement Code (BSC) contains multiple references to European Union (EU) legislation and bodies. Additionally, it also contains text introduced as a result of implementing various EU legislation. Retaining these references and text following the United Kingdom’s (UK’s) withdrawal from the EU without a deal (‘no-deal Brexit’) will mean that the BSC is no longer technically accurate but will remain operable because of the European Union Withdrawal Act 2018.

Current Status

Submission
Initial Written Assessment
Assessment Procedure
Report Phase
With Authority
Awaiting Implementation
Implemented

Summary

The European Union Withdrawal Act (2018) will allow the BSC to remain operative immediately following exit day. However, there will be technical inaccuracies, which may lead to confusion for anyone not familiar with the relevant Brexit legislations, and will need updating as soon as possible.

Most EU regulations will be retained in UK law in the event of the UK leaving the EU without a deal – a ‘no-deal Brexit’. However, the UK government has laid Statutory Instruments (SIs) that, when in force, will mean that some parts of EU Regulations will not be retained i.e. some Articles within Regulations will effectively be ‘deleted’ from retained UK law (some of the ‘deleted’ articles are, in some cases, replaced by UK replacement legislation but, not all). This means that the BSC will need to be updated to reflect this. Additionally, references to partially retained EU Regulations will need to be updated.

It should be noted that some revoked EU Legislation may not lead to the BSC being amended as it is more efficient for these parts of the BSC to remain ‘dormant’ until further details emerge of the UK’s future relationship with the EU post-Brexit. An example would be parts of the Code dealing with P344 ‘Project TERRE’ which won’t become ‘active’ until December 2019.

Progression

The Panel reviewed the draft Modification Report at their meting on 11 April 219 and deferred making a decision until there is more certainty around the UK’s exit from the EU.

The UK’s exit day from the European Union was amended early in the morning of 11 April 2019 until 31 October 2019 at the latest. The Panel felt that as there is a reasonable possibility that the P382 proposed draft legal text may need amending before then e.g. as a result of other Modifications being implemented in the meantime or changes to legislation by the Government.

Coupled with uncertainty over whether P382 will be required (N.B. P382 is only required in the event of a no-deal exit from the EU), the most economic and efficient thing to do would be to defer their decision.

Next Events

ELEXON will continue to monitor and analyse Brexit announcements for relevance to the BSC as well as liaising with Ofgem, BEIS and other Code Administrators. If we assess that the Panel need to make a decision on P382 ahead of the 10 October 2019 Panel meeting, we will make such recommendation at the appropriate time.

If changes are required to the proposed draft legal text for P382, we will share them with the Panel ahead of asking for their P382 decision and, if necessary (e.g. if there has been a material change in the text) may recommend that the Panel re-consults on the amended proposed draft legal text.

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