Newton Emerson: People will not be left to freeze for the sake of DUP pride

New British prime minister Liz Truss is expected to unveil an energy support package as early as today. Explaining how this might apply to Northern Ireland could take longer. Devolution, the protocol and Ireland’s single electricity market add mind-boggling layers of complexity, with the further complication that all these layers are to some extent broken. The grim reality of the coming months means administrative obstacles to keeping the lights on will become untenable, with significant political consequences.

From what has been reported of the Truss plan so far, it could cost up to £170 billion (€196 billion) over two years. Northern Ireland’s per capita share would be £5 billion (€5.7 billion), a vast sum in comparison to Stormont’s annual £12 billion (€13.8 billion) budget.

In theory, the £5 billion has to pass through Stormont’s hands if the scheme is classed as extra public spending. In practice, the mess Northern Ireland’s politicians and civil servants would make of such a daunting task is almost comic to contemplate. It would make the renewable heat incentive look like a dropped fiver. London might have options to give grants or loans directly to energy companies but that would not mean devolution could be bypassed. Northern Ireland is the only part of the United Kingdom where energy policy is devolved, with a separate privatised industry and regulatory regime. Any attempt to transpose a support scheme from Britain would still require adjustments and approvals from the North’s Utility Regulator and Stormont ministers, yet there is no fully-functioning executive to sign off on big decisions.

Tensions are brewing within the Irish single market. EirGrid has acquired parts of the Northern system but is refusing to accept the remit of the Northern regulator, which has accused it of secrecy and using the North to subsidise the South

Assuming that could be overcome, any scheme would have to be compatible with the all-Ireland single electricity market. The UK is likely to cap energy bills by subsidising suppliers, while the European Union is proposing a different scheme for member states, where profits are capped for each type of electricity generation. These approaches are incompatible with smooth trading across the island.

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Ironically for Truss, who styles herself as an heir to Margaret Thatcher, her scheme strips out the price mechanism in favour of government spending. The EU is attempting to preserve market signals to discourage consumption and reward efficiency. By law, the EU vision has to win: the all-Ireland market is protected by the Brexit protocol, which applies EU energy trading laws to Northern Ireland. UK subsidies could also breach the protocol’s restrictions on state aid. A VAT cut on energy, mentioned in some reports, could breach the protocol as well.

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Brussels has only partial control of energy policy. It might accept an energy scheme in Northern Ireland if regulators in both parts of the island were satisfied it protected competition, transparency and security of supply – the aims of EU law.

Unfortunately, tensions are brewing within the Irish single market. EirGrid has acquired parts of the Northern system but is refusing to accept the remit of the Northern regulator, which has accused it of secrecy and using the North to subsidise the South. EirGrid insists it can only be regulated by the single market committee, run by both regulators, despite having this claim thrown out by a Belfast court in March. The timing could not be worse, exacerbated by the unmistakable subtext of an Irish State enterprise taking over Northern Ireland.

Normally, any one of these issues would take years to address. Resolving them all before this winter is a preposterous expectation. Something will have to give.

A crisis “grace period” on the single electricity market is the most realistic and least damaging way to deliver support quickly to Northern Ireland. While it would be preferable if Brussels agreed, London got away with unilateral grace periods on food and medicine. Keeping power flowing is an issue on a greater scale.

People will not be left to freeze for the sake of DUP pride or EU paperwork. Whatever negotiations and manoeuvrings everyone has planned will have to fit around that reality

The DUP’s boycott of devolution will become unsustainable, perhaps to the party’s relief. Energy support would be the excuse it needs to return to Stormont without waiting for Truss’s Bill to disapply the protocol. In his statement congratulating the new prime minister’s appointment, DUP leader Sir Jeffrey Donaldson referred pointedly to the protocol and Northern Ireland’s “energy and food security”.

This suggests the DUP will settle for a sea border fix on agrifood so it can return to Stormont and claim credit for helping to roll out the energy support scheme.

The DUP certainly does not want to be blamed for delaying support. Polls show most unionist voters back its boycott but that is unlikely to last as temperatures fall.

Any delay cannot be for long. If Stormont is not restored by the October 28th deadline for the collapse of devolution the UK government will step in, extend the deadline and deliver help by a one-off act of direct rule. People will not be left to freeze for the sake of DUP pride or EU paperwork. Whatever negotiations and manoeuvrings everyone has planned will have to fit around that reality.