EirGrid, as Ireland's Transmission System Operator, is responsible for ensuring the balance of supply and demand on the Irish electricity system.
EirGrid does this by a process of directing energy generators to increase or reduce supply and/or directing demand response facilities to increase or reduce their demand (referred to as "dispatch" and "re-dispatch") in accordance with Irish Single Electricity Market (SEM) rules.
The Regulation
EU Regulation 2019/943 ("the Regulation") is the governing framework for the internal electricity market and the SEM rules must be in accordance with the Regulation. Article 12 and Article 13 of the Regulation concern the "dispatching" of generation and demand response. Article 13(7) provides that where this "re-dispatch" process is engaged, the system operator shall compensate the affected operator of the re-dispatched generation/demand response facility.
The Regulation became effective on 1 January 2020 and, following several consultations, the Single Electricity Market Committee (SEMC) comprised of Ireland's Commission for Regulation of Utilities ("CRU") and Northern Ireland's Utility Regulator, issued SEM Regulatory Decision (SEM-22-009) (the Decision) on 22 March 2022. The Decision provided, among other things, that the compensatory payments associated with Article 13(7) would only be implemented from the year 2024/2025 and that net revenues from corporate power purchase agreements (CPPAs) lost due to redispatch (i.e. constraint or curtailment) would not be taken into account in calculating compensation.
In 2022, two separate judicial review proceedings were initiated by windfarm developers Greencoat and Energia against CRU, in relation to the Decision, seeking an order quashing the Decision.
High Court Judgment – November 2023
The initial judgment in the proceedings was delivered on 10 November 2023, with the High Court deciding the Decision conflicted with Article 13(7) due to it:
- delaying the payment of compensation for redispatch until the year 2024/2025;
- separating the compensation mechanism by way of costs of lost revenues in the market and revenues associated with support from renewable support schemes;
- leaving the decision as to whether compensation for foregone financial support should be paid with the governments of Ireland and Northern Ireland;
- distinguishing between generators on the basis of the date of commissioning preceding or following 4 July 2019;
- limiting compensation to generators in the day ahead and intraday electricity markets;
- allowing for payment by SEMOpx, the day ahead and intraday electricity market trading provider of the SEM, to parties other than the operator of the re-dispatched generation; and
- excluding net revenues from CPPAs lost as a result of re-dispatching from being taken into account in the calculation of compensation.
High Court Judgment – July 2024
On 1 July 2024, Sanfey J in the High Court delivered a follow-up judgment in which he confirmed the quashing of the Decision and set out the terms for ten other substantive orders to be made in relation to the case. These can be found here.
Next Steps
The CRU has indicated that it will appeal the substantive decision.
Contributed by Matthew Smith, Colm Booth
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