The Supreme Court has referred a dispute over compensation for renewable electricity generators to the Court of Justice of the European Union (CJEU), asking it to clarify the meaning and effect of EU rules on non-market redispatching.
The reference, dated 21 January 2025, arose from two appeals brought by the Commission for Regulation of Utilities (CRU). The appeals concern challenges by groups of electricity market participants to a March 2022 decision of the Single Electricity Market Committee (SEMC). That decision set out how compensation should be calculated when generators are instructed to reduce output for system reasons rather than through market-based mechanisms.
The applicants say the decision fails to compensate affected generators fully for losses caused by downward redispatching. They challenge, among other things, delaying compensation for curtailment, deferring consideration of lost government support, excluding some generators that do not participate in the day-ahead market, and paying compensation to electricity suppliers rather than necessarily to the generators. They also contest different treatment based on whether a generator has priority dispatch and the decision’s treatment of payments under corporate power purchase agreements.
The CRU disputes the applicants’ interpretation of the EU regulation. It says the provision allows discretion over what compensation is appropriate and that it does not necessarily require full compensation. The Attorney General broadly supports the CRU’s position. These are parties’ submissions, not findings by the Supreme Court.
The High Court upheld the applicants’ judicial review challenges and quashed the SEMC decision in 2023. The Supreme Court granted the CRU leave to appeal. It has not decided those appeals or ruled on the legality of the decision. Instead, it said the EU provision’s interpretation and enforceability raised questions that were not sufficiently clear to resolve without guidance from the CJEU.
The Supreme Court’s questions include whether the regulation requires generators with firm access to be compensated for all lost revenue, including foregone support; what counts as “unjustifiably low or unjustifiably high” compensation; and whether compensation can vary according to priority dispatch. It also asks whether the provision has direct effect in national law and whether it can be relied on to challenge a national measure if it does not.
Further questions concern when compensation must begin, treatment of foregone financial support, eligibility of generators outside the day-ahead market, who should receive payment, and whether compensation must include losses under corporate power purchase agreements.
The court requested that the CJEU give the reference as much priority as possible, citing the issues’ importance to the electricity market on the island of Ireland. The reference seeks answers to the legal questions; it is not a final outcome in the appeals.