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CJEU to look at electricity-market rules

The Supreme Court has referred questions of EU law arising from a case concerning the regulation of Ireland’s electricity market to the Court of Justice of the European Union (CJEU). 

The regulator, the Commission for Regulation of Utilities (CRU), had appealed an earlier High Court judgment in favour of two renewable-energy providers, Greencoat and Energia. 

The Supreme Court’s request to the CJEU says that its reference raises “issues of systematic importance for the functioning of the electricity market in the island of Ireland” and has asked for the matter to be prioritised.

‘Redispatched’ power 

The case centres on article 13(7) of EU Regulation 2019/943, which governs the operation of the single electricity market on the island of Ireland. 

The article sets out how companies in the market should be compensated when their renewable electricity is ‘redispatched’ – this happens in cases where the regulator needs to reduce the amount of renewable electricity in the system due to congestion, or limits having been reached.  

The energy companies had challenged the regulator’s interpretation of how compensation is calculated. 

The Supreme Court describes the issue of the proper calculation of such compensation as “one of huge commercial significance”. 

The two energy suppliers argue that article 13(7) entitles them to be fully compensated for lost revenue in cases where their electricity is redispatched. 

CRU’s position 

The CRU argues that the wording of the relevant article – in particular, a reference to “unjustifiably low or unjustifiably high compensation” – leaves such a broad discretion to member states that it cannot be said to be sufficiently “clear, precise and unconditional” to have direct effect, and cannot be enforced in a national court. 

The Attorney General, who was asked by the Supreme Court to participate as a notice party, broadly supports the CRU’s position. 

The Supreme Court states that, while the dispute between the parties over interpretation is significant, the broader dispute is “even more fundamental, extending to the legal status and effect of article 13(7) in the Irish legal order”. 

€158 million at stake 

It has asked the EU court a series of questions on the meaning of article 13(7), and whether it is precise enough to be directly effective in national law. 

Lawyers at William Fry say that, if article 13(7) is upheld by the CJEU as directly effective, it could leave the exchequer (through EirGrid) liable for payment of €158 million worth of compensation to wind-farm operators. 

They add that, once the CJEU delivers its response, which could take up to 18 months, the Supreme Court will be obliged to implement the EU court’s ruling with no scope for appeal.