The Supreme Court has referred a number of questions concerning redispatch compensation arising under the governing framework for Ireland’s internal electricity market.
Background
In November 2024, the High Court set out its substantive decision in the ‘GR Wind Farms’ case regarding Ireland’s rules on the dispatching of electricity generation and demand response, as set out in a Single Electricity Market Committee (SEMC) Decision (the Decision), in the context of Article 12 and Article 13 of EU Regulation 2019/943 (the Regulation). We previously covered the background to that judgment and some of the key relevant concepts here.
Following the Commission for Regulation of Utilities’ (CRU) appeal of the High Court’s decision, an oral hearing took place in the Supreme Court on 12 and 13 December 2024, following which the Supreme Court has made its first order of 2025, deciding to refer certain EU law questions raised in the case to the Court of Justice of the European Union (ECJ).
“Insufficiently Clear, Precise and Unconditional“
The CRU appealed that Article 13(7) of the Regulation, which provides that a transmission system operator (e.g. EirGrid) must compensate affected operators of redispatched generation/demand response facilities where the ‘redispatch’ process is engaged, lacks the direct effect inherent to EU Regulations. The CRU made this argument based on the reference to “unjustifiably low or unjustifiably high compensation” in Article 13(7), claiming this wording left such a broad discretion to Member States in its implementation that it could not be said to be sufficiently “clear, precise and unconditional” as to have direct effect.
On that basis, the CRU posited that (i) Article 13(7) could not be relied upon to set aside the Decision, being a provision of a national law measure, and (ii) Article 13(7) could not be enforced before a national court. The Attorney General, who was requested by the Supreme Court to participate as a notice party, broadly supported this position of the CRU.
“Huge Commercial Significance“
Highlighting that “the issue of the proper calculation of the compensation payable where redispatching occurs is one of huge commercial significance“, the seven judge Supreme Court requested that the ECJ give this reference “as much priority as possible” as it is of “systematic importance for the functioning of the electricity market in the island of Ireland“.
If Article 13(7) is upheld by the ECJ as directly effective, the resulting disapplication of the Decision may render the exchequer (by way of EirGrid) liable for payment of €158m worth of compensation to wind farm operators.
Next Steps
Given the emphasis on the importance of the prioritised questions referred by the Supreme Court, the turnaround time of the ECJ’s response should be reduced by a few months.
Once the ECJ delivers its response, which could take up to 18 months, the Supreme Court will be obliged to implement the ECJ’s ruling with no scope for appeal.
The Supreme Court judgment is available to view in full here.
Contributed by Matthew Smith, Colm Booth.