High Court quashes decision not to compensate renewable energy companies for ordered shut-downs

Two groups of companies involved in the generation of renewable energy have won High Court challenges against a decision by the Commission for Regulation of Utilities (CRU) not to compensate them if they are told to temporarily shut down due to issues with the electricity grid.

The actions were taken by Energia Group Holdings, along with several subsidiaries, and GR Wind Farms, and its subsidiaries, over a decision taken last March by the commission, which is the State’s regulator for energy and water.

The CRU decided not to implement an EU regulation providing that power-generating companies would receive compensation when they are told to switch off their wind farms due to grid limitations.

In a lengthy judgment, Mr Justice Mark Sanfey said the compensation system established by the decision, which was made through the commission’s Single Energy Market Committee, was “fundamentally flawed” and could not be allowed to stand.

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The judge said the applicants are entitled to orders quashing the challenged decision.

The applicants had claimed that the CRU was not entitled to make the decision and must implement the EU regulation regarding compensation for energy-generators.

It was also alleged that in arriving at its decision the respondent took into account irrelevant considerations and failed to take into account relevant considerations.

It was further claimed that the decision was irrational and that the commission failed to give adequate reasons for what the applicants say amounts to a breach of fair procedures.

They had sought various orders and declarations including orders quashing the CRU’s decision and for the regulator to give effect to the EU regulation regarding compensation.

They also seek a variety of declarations including that compensation must be paid in accordance with the EU regulation by the transmission system operator, which in this case is EirGrid, as licensed by the commission.

The actions were opposed.

EirGrid Plc was a notice party to the actions.

Mr Justice Sanfey said that while the granting of orders quashing the decision “is warranted” he wanted the parties to first consider his judgment and confer with each other before any further and final orders are made.

The judge said the application for an order that the respondents give effect to the EU regulations on the internal market for electricity was “in very general terms”.

The matter will return before the court later this month.