Preparing for EU exit – implications for licences and industry codes

Ofgem has committed to working with the industry in the run-up to Brexit to ensure a seamless transition.  It has published its views on what changes may be needed to the industry, available here.

This follows principles laid out in the Withdrawal Bill (available here) which assumes, amongst other things, that most EU law will be ‘converted’ or ‘retained’ as domestic law on exit day. As a result, it has not identified any provisions which are likely to be legally inoperable on exit day. There are a few areas however that may require modification, which includes references for the requirement that code objectives comply with EU law as well as definitions and terms derived from EU law. Ofgem is expecting to publish more detailed proposals in the autumn, when the details of leaving the EU are better understood.

Ofgem has ruled out launching a Significant Code Review (SCR) for changes that are required, which will mostly be updates to references to external documents. Instead it believes that industry parties (primarily National Grid) are best placed to do this work.

You can read Ofgem’s consultation response here

The Department for Business, Energy & Industrial Strategy (BEIS) select committee published a view on the handling of state aid as part of Brexit. During the transition period, it is proposed that the existing structure of EU rules and regulations will still be used, with the Competition and Markets Authority (CMA) best placed to take on the role of State Aid Regulator after exit.

You can read the letter here

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