EPUK Investments Ltd v Environmental Protection Agency

• Jurisdiction: Ireland
• Judge: Mr Justice David Holland
• Judgment Date: 10 February 2023
• Neutral Citation: [2023] IEHC 59
• Court: High Court
• Docket Number: Record no. 022/859 JR & 2022/860 JR

EPUK Investments Limited

Applicant

and

Environmental Protection Agency

Respondent

Between:

EPUK Investments Limited

Applicant

and

Commission for Regulation of Utilities

Respondent

[2023] IEHC 59

Record no. 022/859 JR & 2022/860 JR

Record No. 2022/860 JR

THE HIGH COURT

JUDICIAL REVIEW

Judicial review – Justiciability – Prematurity – Applicant seeking certiorari quashing what it called the “Unlimited Operation Decision" by the respondent – Whether the proceedings were premature

Facts: The applicant, EPUK Investments Ltd (EPUKI), in proceedings bearing record no. 2022/859 JR, applied to the High Court seeking certiorari quashing what it called the “Unlimited Operation Decision" by the respondent, the Environmental Protection Agency (EPA), by its e-mail dated 18 July 2022 to EPUKI, on the following grounds: as irrational and in significant and serious error in creating a situation in which Open Cycle Gas Turbine electricity generation plants (OCGTs) in Northern Ireland and Ireland are treated differently both in their permissible runtimes and in their treatment in the Single Electricity Market (SEM) Capacity Auction; for the EPA’s failure to consult in accordance with its duty under Common Law prior to reaching its Unlimited Operation Decision; as based on an error of law in the interpretation of Articles 11 and 14 of the Industrial Emissions Directive (IED) and the Implementing Decision; for the EPA’s acting in breach of its duties under Articles 11 and 14 of the IED and of those articles as transposed by s. 86A(3)(a) of the Environmental Protection Agency Act 1992 which require it to ensure OCGTs and Combined Cycle Gas Turbines electricity generation plants (CCGTs) are operated in accordance with the relevant Best Available Techniques (BATs) and that permits include all measures necessary for compliance with such BATs; and for the EPA’s acting in breach of its duties under Article 3(1) and 3(4) of the Recast Electricity Directive of 2019 (RED). In proceedings bearing record no. 2022/860 JR against the respondent, the Commission for Regulation of Utilities (CRU), the applicant, EPUKI, applied to the High Court seeking certiorari quashing what it called the "De-Rating Decision" by the Single Electricity Market Committee (SEMC) dated 5 September 2022, on the following grounds: as irrational and in error in creating a situation in which OCGTs in Northern Ireland and Ireland are treated differently in their permissible run-times, in their treatment in the SEM Capacity Auction, and failing to meet the intended purpose of the De-Rating Decision; failure to properly consult in accordance with its Common Law duty before making the De-Rating Decision; breach of its duties under s. 9BC(1) and 9BC(2) of the Electricity Regulation Act 1999 which transpose Articles 3(1) and 3(4) of the RED; as based on an error of law in the interpretation of Articles 11 and 14 of the IED and Commission Implementing Decision (EU) 2021/2326 (CID), and failing to adopt and/or recognise the legal limit prescribed by the IED and the CID, and in determining that it will award contracts without regard thereto.

Held by Holland J that he would dismiss the action against the EPA on the basis that the impugned e-mail of 18 July 2022 was non-justiciable. He held that the proceedings against the EPA were premature and would be dismissed on that account. Turning to the action against the CRU, he rejected the allegation of inadequacy of consultation. He found that there was no “acknowledgment” in the SEMC’s Information Note of December 2021 of the basis of a De-Rating decision taken months later and, in terms, that allegation was anachronistic. He held that the question of the SEMC interpreting the IED and the CID did not arise and his acceptance that the SEMC’s imposition of Annual Run Hour Limits (ARHL) De-Rating was not premised on the EPA’s interpretation of the IED and the CID – or, for that matter, any interpretation of the IED and the CID. He accepted that the presence or absence of an ARHL was an objective difference in a relevant characteristic producing objectively different effects on the respective contribution of the postulated respective OCGTs to electricity generation capacity. Accordingly, he held that the case based on discrimination must fail for failing to compare like with like. He held that in its risk allocation aspect, the decision was in no way irrational. He held that, at least on its case and on the figures as presented, EPUKI suffered no loss by the position and would lose by its prescribed position. Even prima facie he could not see the financial and associated information provided by EPUKI as enabling an award of damages.

Holland J dismissed both proceedings. He was provisionally of the view that the CRU and the EPA, having succeeded, should have their costs.

Proceedings dismissed.

Unapproved

JUDGMENT OF Mr Justice David Holland DELIVERED 10 FEBRUARY 2023

Contents

THE IMPUGNED DECISIONS	6
THE PARTIES	7
EPUKI'S COMPLAINT — And change of ground	7
EPUKI v EPA — Pleadings	12
EPUKI Grounds	12
D1 & D2 — Irrationality, Error & Failure to Consult — Particulars	13
EU1 & EU2 — IED, CID & EPAA 1992 — Particulars	14
EU3 — Recast Electricity Directive — Particulars	16
EU1, EU2 & EU3 — Damages	16
Justiciability	16
EPA Opposition	17
Preliminary Objections — Justiciability, Discretion & Time Limits	17
Preliminary Objections — Standing/Sufficient Interest/Prematurity	17
Preliminary Objection — Improper Constitution/Abuse of Process	18
Preliminary Objection — No Case Pleaded Against EPA	18
EPA Opposition — Substance	18
EPUKI v SEMC — PLEADINGS	20
EPUKI Grounds	20
D1 & D3 — Irrationality, Error & Failure to Consult — Particulars	21
D2 & EU2 — Recast Electricity Directive & Electricity Regulation Act 1999 — Particulars	22
EU1 — Articles 11 and 14 IED and the CID — Particulars	23
CRU Opposition	24
Preliminary Objections	24
D1 & D3 — Irrationality, Error & Failure to Consult	25
D2 & EU2 — Recast Electricity Directive & Electricity Regulation Act 1999 — Particulars	26
Discretionary Refusal	26
BACKGROUND	27
IED	28
The RED and the SEM	29
Clean Energy Package	32
OCGTs & CCGTs and EPUKI's OCGTs & CCGTs	33
Interaction of Regulatory Roles & Competences & an Initial Conclusion	35
Conclusion of Background	39
INDUSTRIAL EMISSIONS DIRECTIVE & IED PERMITS	41
Obiter	41
Environmental Protection	41
IED Regime, IED Permits & ELVs	41
IED Articles 11, 14, 15	41
IED — Scheme & Academic Commentary	44
BAT & Role of BAT and ELVs in Informing IED Permit Content	48
EPAA 1992 & LCP Regulations 2012	53
The Parties' Views of BATs and ELVs in IEL licensing	56
The LCP CIDs	60
CID — General Considerations	61
BAT 12, BAT 40, Tables 23 & 24	62
IED & ARHL — CHRONOLOGY FROM THE 2017 CID	68
Draft English Guidance 2018 & 2019	68
The Ballylumford Permit Review — Autumn 2021 & the Position of the NIEA & the New Kilroot OCGTs	70
The Corduff Road IEL — November 2021	72
The 2021 CID & SEMC Information Note December 2021	73
EPUKI's Pre-Application Consultation with EPA, the Impugned EPA e-mail of 18 July 2022 & Events to the Correspondence before Action	74
THE IMPUGNED EPA E-MAIL OF 18 JULY 2022	75
Events from 18 July 2022 to the Correspondence before Action	76
The EPA's Inquiries of Environmental Regulators in other Member States	80
SEM, CAPACITY MARKET, CAPACITY AUCTIONS, QUALIFICATION & DE-RATING DECISION	82
ARHL DE-RATING — Sequence of events & the T4-2026/2027 Capacity Auction	86
From March 2017	86
June 2021 — the Possibility of ARHL De-Rating Revisited	89
From July 2021 — including EPUKI Submission	89
SEMC Information Note of 7 December 2021 & Comment Thereon	94
From May 2022 — Decision to Impose ARHL Derating — 2 Decisions & Code Modification	97
SEMC Parameters Consultation Paper & EirGrid/SONI Information Paper — May 2022	97
EPUKI Response in Parameters Consultation — 22 June 2022.	100
Parameters Decision of 11 August 2022 & Code Modification Proposal	102
Impugned Code Modification Decision of 5 September 2022	105
The Code Modification & Rejection of Qualification Applications	107
SEMC Commentary	108
T-4 2026/27 Capacity Auction & EPUKI Qualification	111
Ireland Capacity Outlook 2022–2031 — October 2022	112
ADMISSIBILITY OF EXPERT REPORTS, DISPUTES ON TECHNICAL ISSUES & ENVIRONMENTAL ADVANTAGE & FINANCIAL MATTERS	113
Admissibility on Question (i) — Interpretation of the CID BAT Conclusions	114
Admissibility on Question (ii) — Advantages, Disadvantages and Uses of OCGTs & CCGTs	115
Question (ii) — The Utility of OCGTs	115
Denison & Lyden Affidavits	115
Crankshaw, O'Connor & Melvin Affidavits	117
SEMC ASSUMPTION OF ARHL DIFFERENCES NORTH AND SOUTH & FINANCIAL IMPLICATIONS FOR EPUKI	122
SEMC Assumption of ARHL Differences North and South — the CoNE Paper	123
Financial Consequences to EPUKI — EPUKI Position	125
Financial Consequences to EPUKI — EPA and SEMC Response	127
EPA CASE — JUSTICIABILITY/PREMATURITY	128
Introduction	128
Sweeney v Fahy, Cintra, Spencer Place & CETA	129
EPA Cases on prematurity	136
Mullally, MacPhartaláin & Maguire	137
Conclusion on Justiciability & Prematurity	140
EPA CASE — RESIDUAL ISSUES	142
What does the EPA's E-Mail dated 18 July 2022 mean?	143
Interpretation of BAT Conclusions — Possibility of Difference Between EPA & NIEA	144
SEMC CASE — CONSULTATION	145
SEMC CASE — SEMC DERATING DECISION BASED ON EPA APPROACH TO ARHL	148
SEMC CASE — BREACH...