GR Wind Farms 1 Ltd and Others v The Commission for Regulation of Utilities; Energia Group Holdings (ROI) DAC and Others v The Commission for Regulation of Utilities

• Jurisdiction: Ireland
• Judge: Mr Justice Mark Sanfey
• Judgment Date: 10 November 2023
• Neutral Citation: [2023] IEHC 620
• Court: High Court
• Docket Number: [Record No. 2022/507JR]

Between

GR Wind Farms 1 Limited, CNOC Windfarms Limited, TRA Investments Limited, Ballybane Windfarms Limited, Beam Wind Limited, Meenaward Wind Farm Limited, Cordal Windfarms Limited, Sigatoka Limited, Glanaruddery Windfarms Limited, Glencarbry Windfarm Limited, Gortahile Windfarm Limited, Killala Community Windfarm Designated Activity Company, Kill Hills Windfarm Limited, Knocknacummer Wind Farm Limited, Knocknalour Wind Farm Limited, Seahound Wind Developments Limited, Lisdowney Wind Farm Limited, Monaincha Wind Farm Limited, Ronaver Energy Limited, Tullynamoyle Wind Farm II Limited

Plaintiff

and

The Commission for Regulation of Utilities

Respondent

and

Eirgrid Plc

Notice Party

Between

Energia Group Holdings (ROI) DAC, Energia Customer Solutions Limited, Wind Generation Ireland Limited, Holyford Windfarm Limited, Cornavarrow Windfarm Limited and Eshmore Limited

Applicants

and

The Commission for Regulation of Utilities

Respondent

and

Eirgrid Plc

Notice Party

[2023] IEHC 620

[Record No. 2022/507JR]

[Record No. 2022/501JR]

THE HIGH COURT

COMMERCIAL

JUDICIAL REVIEW

JUDGMENT of Mr Justice Mark Sanfey delivered on the 10 ^th day of November 2023 .

	Page
Introduction	5
The parties	7
The legal framework	8
The consultation process	8
The single electricity market	9
Relevant concepts generally	10
Dispatch	10
Priority dispatch	11
The three markets	12
The ex-ante markets	12
Balancing market	13
Redispatch	13
Grid connection and firm access	14
Financial support schemes	15
Relevant terms of the Regulation	15
The Decision	19
The reliefs sought	22
The parties' positions on direct effect/direct applicability	24
The expert's evidence	27
Mr Roberts's evidence	28
Mr Anstey's evidence	31
Submissions by Greencoat on specific aspects of the Regulation	33
(i) Deferral of compensation payments until 2024	34
(ii) Phasing out of compensation for redispatch due to curtailment.	34
(iii) Payment of compensation by the TSO to the generator	36
(iv) Limitation of compensation to generators with ex-ante positions in the SEM	37
(v) Exclusion of financial supports	38
Energia submissions	41
“Unjustifiably low/high”	41
Examples	41
The SEMC's perspective on “Unjustifably low/high”	42
The principles of non-discrimination/equal treatment	43
Bidding code of practice (“BCoP”)	44
Corporate power purchase agreements	44
The Decision is in breach of Article 15.2.1 of the Constitution	45
Irrelevant considerations	46
Statement of opposition/duty to give reasons	47
Correspondence on the meaning of the Decision	49
Submissions of the respondent generally	51
The timeliness of implementation	53
Unjustifiably low/high: the respondent's perspective	53
Documents providing context for the Decision	54
Generators pre-and post-4 July 2019	56
Supports a matter for the two governments	56
Phasing out of compensation for curtailment	57
Submissions on the experts' evidence	57
Legal issues raised by the respondent	61
(1) Direct effect/direct applicability	61
(2) The obligation to give reasons	62
(3) Pleadings	63
(4) Article 15.2 of the Constitution	63
Reply by the applicants	65
Discussion and analysis	65
The implications of direct applicability	65
The textual interpretation of Article 13(7)	69
The extent of the implementing measures	75
The meaning of Article 13(7)	84
Other grounds of criticism of the Decision	85
The phasing out of compensation for curtailment	85
Limitation of compensation to generators with ex-ante positions	85
Compensation to be paid by SEMOpx through the SEM	88
Net revenues arising from CPPAs	90
BCoP/BMPCoP	92
Breach of Article 15.2.1 of the Constitution	93
Pleadings/legal certainty/reasons	94
Conclusion	95
Appendix A	97
Appendix B	98

Introduction

1 . This judgment relates to applications for judicial review by each of the groups of applicants in the titles of the proceedings set out above. I shall say more about the identity of the various participants in due course, but for reasons which will become apparent, I propose to refer to the applicants in the first title above collectively as ‘ Greencoat’, and to the applicants in the second title collectively as ‘ Energia’.

2 . Each of the two groups of applicants was granted leave of the court to initiate their respective proceedings in July 2022. Notwithstanding that the Energia proceedings come first in terms of record number, I have listed the Greencoat matter first in the title, simply because Greencoat went first with its submissions in the hearing before me. While the two proceedings have separate pleadings and affidavits, the two applicants essentially seek the same relief, and indeed, at the hearing before me, counsel for the applicants worked in tandem, dividing up their oral submissions between them.

3 . The applicants in each case challenge the lawfulness of a decision made by the respondent (‘ the CRU’) acting through the Single Energy Market Committee (‘ the SEMC’) on 22 March 2022 entitled “Decision Paper on Dispatch, Redispatch, and Compensation Pursuant to Regulation (EU) 2019/943” (‘ the Decision’). Each of the applicants seeks an order of certiorari quashing the Decision, and an order of mandamus requiring the CRU to “give full effect to Article 13(7) of Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity (‘ the Regulation’)”. The parties each seek a range of other declaratory reliefs which seek to establish the various deficiencies and errors of law in the Decision for which the applicants contend.

4 . The respondent to each of the proceedings, the CRU, filed a statement of opposition in each case. While Greencoat and Energia were critical of the way in which the statement of opposition in the respective cases was pleaded, there is no doubt that the CRU firmly opposed the applications. Each party submitted numerous very lengthy affidavits in support of their respective cases. As the various deponents responded to the averments made in the affidavits from the other side, those deponents frequently acknowledged that it was more appropriate to confine comment on the opponents' position to the submissions of the parties, before proceeding to embark upon what could only be regarded as a lengthy submission in the body of the affidavit.

5 . In fairness to the deponents, it was difficult for them to set out their respective positions coherently and accurately without explaining their actions and seeking to justify them. However, this resulted in the court receiving a large number of very detailed affidavits, each accompanied by several volumes of exhibits and core documents.

6 . The parties also submitted the views of expert economists, who proffered successive reports, each responding to the analysis offered by the other. There was some controversy between the parties as to the extent to which such evidence was admissible at all, it being suggested that the reports at times strayed into offering interpretations of the meaning of the Regulation, which all parties agree is solely a matter for the court.

7 . Each of the parties also delivered lengthy but very helpful written submissions, accompanied by volumes of applicable legislation, travaux preparatoires and relevant case law. The oral submissions of the parties took eight days, much of it spent exploring the complexities and intricacies of the electricity market in the EU: how the parties maintain the regulatory structures set up by the EU are supposed to function, and what that means in practical terms as regards implementing those structures.

8 . In order to understand how the Decision came to be implemented by the CRU/SEMC, the rationale for it, and the manner in which the applicants allege that it fails to give effect to the Regulation, it is essential to have a basic appreciation of the way the electricity market works, and in particular how that market is affected by the Regulation and the accompanying “Directive (EU) 2019/944 of the European Parliament and of the Council of 5 June 2019 on common rules for the internal market for electricity (recast) and amending Directive 2012/27/EU” (‘ the Directive’). In this judgment, I have attempted to give sufficient detail to enable the reader to understand the issues involved, while trying to avoid an overly-detailed exposition of matters of limited relevance which could only obfuscate the nature of the dispute.

9 . Where the electricity market is concerned, one of the difficulties facing the uninitiated is the proliferation of organisations, bodies and concepts to which reference is continually made in the documentation by means of acronyms. Mindful of this difficulty, both sides furnished me at the hearing with a glossary of acronyms and definitions of relevant concepts; the accuracy or lack of same of the definitions led to further divergence between the parties. I have therefore included as appendix A to this judgment a glossary of acronyms only which I hope will assist the reader.

10 . As the focus of the applicants' attack on the Decision is its alleged failure to give effect to Article 13(7) of the Regulation, I have quoted that sub-Article in full at para. 65 below. It will however be necessary to consider Article 13 in its entirety; rather than quote its lengthy provisions in full in the judgment, I have attached the full article to this judgment as appendix B.

11 . In this judgment, after introducing the parties, I shall say something about the...