Ireland: Renewable Energy: Legal Update

Last Updated: 5 May 2015
Article by Garrett Monaghan
Most Read Contributor in Ireland, December 2017

In this legal update we have summarised and commented on a number of recent legal developments and open issues that will be of interest to generators of renewable energy, their funders and offtakers in the SEM. This legal update is neither a complete nor a definitive statement of law or of regulation. Specific legal advice should be obtained before taking any action.


An important feature of the I-SEM will be the ability of market participants to trade in different time frames: ahead of, during and after the Trading Day. There are significant advantages in ex ante price disclosure in any market and having a highly liquid, actively traded day-ahead market will be an important indicator of the success of the I-SEM. However, trading in a day-ahead market creates particular challenges for generators who have a more limited ability to predict their output for the following day.

In particular, if there is a mismatch between what the generator sells into a day-ahead market and what it actually generates on the day, it will need to either sell any additional excess generation into the within day or balancing market or, if it is short generation, will need to purchase power in the within day or balancing markets to cover its contract position. Important questions remain as to how this "balancing risk" is to be allocated in the I-SEM, and in particular whether it will be compensated through the REFIT reimbursement methodology.

At present, pursuant to Decision Paper CER/08/236, REFIT reimbursement for offtakers is calculated as the amount, if any, by which the applicable REFIT payments in respect of a generator under the PPA exceeds the total revenues received from the market. This figure is calculated as the total of all revenues from the market over the entire PSO year, taking into account energy payments, constraint payments and capacity payments for every individual trading period in the year. If this principle is applied in the I-SEM, as we believe it should be, offtakers will be kept whole for the amount, if any, by which the applicable REFIT payments in respect of a generator under the PPA exceeds the total revenues received from the market (irrespective of the time periods within which they trade and whether they are forced to purchase electricity to cover a short generation position). This is consistent with the current operation of REFIT, the applicable State Aid notifications and the expectations of market participants.

It has been suggested, however, that REFIT may only compensate offtakers in respect of differences between the applicable REFIT Reference Price plus supplier balancing payment and a single "reference price". If the reference price was an ex ante price this would create a material new balancing exposure for market participants and would give rise to an unprecedented level of regulatory uncertainty for REFIT generators. Any such balancing risk would then fall to be allocated between generators and offtakers under the terms of the PPA. It is not expected that offtakers will readily accept this risk and so it is expected that new PPAs will expressly allocate this risk to generators. Where this risk is not expressly allocated to generators, it is expected that PPAs will permit the offtakers to terminate the PPA when I-SEM is implemented if this issue is not addressed to the offtaker's satisfaction.

Offtakers under existing PPAs will be examining rights under market change and REFIT change clauses to ensure that they are not exposed to this risk.

It is therefore critical for both existing projects and the development of new capacity to meet Ireland's 2020 targets that certainty in relation to REFIT continuing to reimburse all out of market costs be given as a matter of urgency.


A number of recent cases in the Irish and European Courts have potentially major implications for developers of wind farm projects.

Following the recent decision of the Irish High Court in O Grianna v An Bord Pleanala (12 December 2014), developers of wind farm projects now must assess all works which will form part of the overall project at planning application stage. This includes the grid connection, the substation, haul routes and any borrow pits. In O Grianna, the High Court quashed a planning permission granted by An Bord Pleanála ("ABP") for a 6 turbine wind farm in Co. Cork because the planning application in accordance with the then accepted industry practice had not included any information on the works required to connect to the grid. This meant that ABP had, in turn, not assessed the cumulative environmental impacts of these works (which the High Court held are an integral part of any wind farm project) as part of its environmental impact assessment before granting permission.

The application of the Habitats Directive has also given rise to much litigation. In particular, the Court of Justice of the European Union has decided, in Briels v Minister van Infrastructuur en Milieu (15 May 2014), that where protected European habitats are concerned, it is not enough for a developer to compensate "after the fact" for the permanent loss of a protected European habitat caused as a result of the proposed project, by providing for the replacement of the protected habitat elsewhere. A developer must instead seek to eliminate or minimise the negative effects that are likely to arise as a result of a project by way of mitigation measures. These measures should inform and be incorporated into the project design from the outset of the project planning phase.

The Irish High Court in Kelly & Ors. v An Bord Pleanala (25 July 2014) considered the application of the Habitats Directive, and provides clarity on how a consenting authority should undertake an Appropriate Assessment. It is a very stringent and comprehensive analysis. What is required, in summary, is identification, in the light of the best scientific knowledge in the field, of all aspects of a development project which can, by itself or in combination with other plans or projects, affect the relevant European Site in light of its conservation objectives. This requires both examination and analysis. An Appropriate Assessment must contain complete, precise and definitive findings and conclusions and may not have lacunae or gaps for completion at some later stage after consent is granted.

From a project planning perspective, where a developer does not own all or a portion of the lands which are to be included in its application for permission, the decision of the High Court in McCallig v An Bord Pleanala (24 January 2013) outlines what form of written consent should be secured from the relevant landowner(s). The High Court provided what might be described as a novel 'good, better and best' approach for the consent to be obtained.


With any form of investment (including foreign direct investment), regulatory stability and certainty is and should be a pillar of the Irish renewables and wider projects sector.

There has been well-reported concern as to the impact the recent re-valuation exercise undertaken by the Valuation Office on certain operational wind farms in County Limerick; the revaluation led to a reported threefold increase in rates payable. Moreover, concern has been expressed on the extent to which the Valuation Office will apply the same rating methodology to similar wind farm (and possibly other energy) assets in other counties. We understand that the Limerick revaluation is the subject of an ongoing appeals process within the Valuations Office and, if necessary, the Valuations Tribunal (an external body).

Pending the outcome of any appeal or other reduction in the rates valuation, there are clear short term consequences for development and operational projects. The magnitude of this impact is estimated to be equivalent to an increase in the rate of corporation tax from 12.5% to 25% for the affected wind farms. Development projects will likely need to have a higher proportion of committed equity whereas the economics of operational projects will be immediately impacted by higher operational costs. At a national level, to the extent the rate of wind farm build is delayed, there will be an adverse impact on Ireland's ability to meet its 2020 targets. In addition, this materially changes the cost assumptions (of which rates and local taxes formed part) underpinning the REFIT support calculations, thereby resulting in REFIT undercompensating projects in respect of this cost item by reference to the calculations submitted as part of the State Aid notification to the European Commission.


The Companies Act 2014 (the "Act") will take effect on 1 June 2015. Directors of every company will need to appreciate the significance of certain key changes. Specifically, the Act will replace the existing private company limited by shares ("EPC") with two new company types, the:

  • new private company limited by shares, which will have the suffix "limited" or the Irish equivalent or an acceptable abbreviation (referred to here as the "LTD"); and
  • designated activity company, which will have "designated activity company", the Irish equivalent or an acceptable abbreviation as a suffix (the "DAC").

Every EPC will be required to choose whether to become either an LTD or a DAC. The Act sets out a simple procedure for doing so, and allows an 18-month transition period for EPCs to take the necessary action. For single purpose project-financed vehicles, the DAC may be the preferred option. In the event that no action is taken by the board of an EPC, the EPC will automatically convert to an LTD at the end of that period. This 'default' position (and knock on implications) needs to be carefully considered in that the resulting "imposed" standardised company constitution could conflict with prior terms covering, for example, preference shares, share pre-emption rights, minority shareholder protections, voting rights and dissolution provisions.

All companies are advised to review their existing constitutional documents, for example to remove references to redundant legislation and ensure consistency with the Act. Companies should look to engage at an early stage with third parties (e.g. lenders), where their consent to such changes is required by contract.

The Act also sets out a number of provisions intended to facilitate doing business in Ireland. A new optional two-stage procedure for the registration of charges will give greater certainty to borrowers.

The Act is intended to consolidate Irish company law, making it more coherent for investors, directors and regulators. The implementation of the Act does however require directors of EPCs to take action to decide whether to continue as a LTD or a DAC. Companies will also need to consider whether rights or obligations will be triggered under existing contracts in making the necessary changes.


On 26 February 2015, the Department of Energy and Climate Change ("DECC") published the outcome of the first allocation round for Contracts for Difference ("CfDs"), the new regulatory regime for supporting low carbon generation in Great Britain and part of the UK Government's programme of Electricity Market Reform.

A total of 27 contracts, with an estimated annual budget spend of £315 million by 2020/21, have been offered to projects with a combined total of over 2GW of capacity across England, Scotland and Wales. CfDs were awarded to 15 Onshore Wind projects with a total capacity of over 745MW, along with two large Offshore Wind projects (1,162MW). The remaining contracts were awarded to various Advanced Conversion Technologies (62MW), Energy from Waste with CHP (94.75MW) and Solar PV projects (71.55MW).

It is understood that those who have been successful in the auction will have until 27th March 2015 to sign the CfD. The contracts will be signed between developers and the Low Carbon Contracts Company (the CfD Counterparty).

The Northern Ireland Renewables

This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions