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THE HIGH COURT
[Record No. 2024/1407 JR]
BETWEEN
KILSHANE ENERGY LIMITED
APPLICANT
AND
EIRGRID PLC
AND
COMMISSION FOR REGULATION OF UTILITIES
RESPONDENTS
AND
MINISTER FOR THE ENVIRONMENT, CLIMATE AND COMMUNICATIONS
NOTICE PARTY
[Record No. 2024/1429 JR]
BETWEEN
COOLPOWRA FLEX GEN LIMITED AND COOLPOWRA BESS LIMITED
APPLICANTS
AND
EIRGRID PLC
AND
COMMISSION FOR REGULATION OF UTILITIES
RESPONDENTS
AND
MINISTER FOR THE ENVIRONMENT, CLIMATE AND COMMUNICATIONS
NOTICE PARTY
Judgment delivered by Mr. Justice Micheál O'Higgins on 25th March 2025
Table of Contents
The Northern Ireland proceedings. 8
The qualification process under the CMC.. 10
Kilshane application - Affidavit of Brian McMullan. 11
Affidavit of Stuart Draffin. 13
Affidavit of Tom Gallery on behalf of EirGrid. 18
Affidavit of Anne Fitzgerald on behalf of EirGrid. 20
Affidavit of John Melvin sworn on behalf of the CRU.. 23
Affidavits in the Coolpowra proceedings. 25
Affidavit of Anne Fitzgerald sworn on behalf of EirGrid. 31
Affidavit of Aodhagan Downey on behalf of EirGrid. 33
Affidavit of John Melvin on behalf of the CRU.. 34
Outline submissions on behalf of Kilshane. 36
Outline submissions on behalf of Coolpowra. 42
Outline submissions on behalf of EirGrid. 46
Summary of submissions on behalf of CRU.. 50
(i) Question as to the applicable law.. 55
(ii) Failure to exercise discretion/fettering of discretion. 58
(iii) Test for feasibility. 65
(iv) Breach of fair procedures. 72
Fair procedures argument by Coolpowra. 75
Analysis of Coolpowra's fair procedures argument 81
(v) Did the CRU review "cure" earlier flaws?. 83
The CRU review and the "Decision Tree" methodology. 84
(vi) Should relief be withheld on discretionary grounds including futility?. 90
(vii) Choice of decision-making stage for remittal purposes. 95
1. These are twin proceedings brought by separate electricity-generating undertakings seeking to participate in an electricity "Capacity Auction" to supply capacity to the national grid. The Capacity Auction was initially scheduled to run in November 2024. The applicants challenge what are known as Final Qualification Decisions ("FQDs") made by the first respondent ("EirGrid") and the decisions of the second respondent, the Commission for Regulation of Utilities ("CRU") to approve those FQDs, which had the effect of excluding the applicants from the auction.
2. The proceedings raise issues about governing law clauses, failures to exercise or a "fettering" of discretion, curial deference, contractual interpretation, fair procedures, a review body's capacity to cure earlier errors, the doctrine of futility and remittal.
3. The Minister for the Environment, Climate and Communications was named as a notice party to the proceedings, reflecting the important public interest concerns raised by the case. As things turned out, it wasn't necessary for the court to determine the interlocutory injunction applications - which was the notice party's main concern - in circumstances where the respondents ultimately elected to postpone the Capacity Auction for short periods while the proceedings played out. A similar position was adopted in another set of legal proceedings taken in Northern Ireland by separate undertakings in November 2024. I will return to the Northern Ireland proceedings later in this judgment.
4. In view of the pending auction and the urgency of the case, the proceedings were fast tracked by Gearty J. in the judicial review list. I granted leave in the Kilshane proceedings on the 13th November and in the Coolpowra proceedings on 19th November 2024. The proceedings were case managed in the judicial review list and, based on the time estimate given to the court, were assigned a two day hearing slot on 3rd and 4th December 2024. That time estimate turned out to be unrealistic because the hearing actually took four days, from 3rd until 6th December 2024.
5. The court was asked by the parties to provide an almost immediate decision by Tuesday 10th December 2024. At the close of the hearing on the Friday evening, I indicated I would consider the issues over the weekend and provide the decision of the court by that deadline, with reasons to follow later in a reserved judgment. In my decision, I decided that the final decision of the second respondent should be quashed in each case and the proceedings remitted for further consideration. This is now my reserved judgment.
6. The Capacity Market invites participants to commit to delivering energy over the course of a defined delivery period, the period in the present case being from 1st October 2028 to 30th September 2029. In return, eligible participants receive guaranteed capacity payments for each megawatt (MW) of capacity they sell to the market. The level of capacity payment, and the level in which capacity providers receive it, is determined by competitive auction, in this case the 2028/2029 T-4 Capacity Auction. Subject to the qualification criteria, a Capacity Auction is open to all existing and new capacity which has not yet been constructed or commissioned. Non-participants in the Auction may still subsequently sell energy into the market, but they will not benefit from the guaranteed capacity payments.
7. In the Kilshane proceedings, the applicant seeks an order of certiorari quashing the FQD of EirGrid rejecting the applicant's application for qualification for the Capacity Auction in respect of Candidate Units bearing the references "GU_406920" and "GU_406930", located at Huntstown, Co. Dublin.
8. In the Coolpowra proceedings, the applicants seek an order of certiorari quashing the FQD of EirGrid rejecting the applicants' respective applications for qualifications for the Capacity Auction in respect of Candidate Units bearing the following references:
· In respect of Coolpowra Flex Gen: GU_406290, GU_406300 and GU406310;
· In respect of Coolpowra Bess (previously Lumcloon Power (E) Limited): GU_406770, GU_406780, GU_406790, GU_406800, GU_406810, GU_406820, GU_406830, GU_406840 and GU_406850.
9. In both sets of proceedings, the applicants also seek an order of certiorari quashing the decisions of the second named respondent (CRU) to approve the FQDs aforesaid.
10. In light of the subject matter, it is unavoidable that a certain amount of industry jargon and acronyms will creep into the case. I will do my best to keep these to a minimum. However, some central players and concepts need to be identified from the outset, so I will set out in the next few paragraphs a short glossary of relevant terms. The CRU is the Regulatory Authority established pursuant to s. 8 of the Electricity Regulation Act 1999 (the "1999 Act"). Among its statutory functions, the CRU is responsible for the regulation of the electricity sector in the State. Pursuant to s. 14(1)(e) of the 1999 Act, the CRU licences EirGrid as the Transmission System Operator (the "TSO") in the State. It is also responsible, with the Northern Ireland Authority for Utility Regulation (the "NIAUR"), for the management of the Single Electricity Market (SEM) on the island of Ireland.
11. EirGrid together with SONI (the licensed TSO for Northern Ireland) - known together as the "SOs" - are responsible for the administration of the Capacity Market to which the current auction relates.
12. In their joint actions in relation to the SEM, the NIAUR and the CRU are referred to collectively as the Regulatory Authorities (RAs). The RAs have overall oversight of the SEM. There are two committees created under the respective legislative frameworks in Ireland (Section 8A and Schedule 1A of the 1999 Act) and Northern Ireland (Article 6 and Schedule 2 of the Electricity (Single Wholesale Market) (Northern Ireland) Order 2007), those being the Irish SEM-C and the Northern Irish SEM-C respectively. SEM-C stands for Single Electricity Market Committee. Each committee comprises the same membership of up to three representatives of the NIAUR, three representatives of the CRU, one independent member and deputy independent member.
13. It has previously been held that the SEM-C is not a "separate person in law" and accordingly, the CRU is the appropriate respondent in respect of challenges to decisions of SEM-C brought in this jurisdiction (Clarke J. in Viridian Power Ltd. v. CRU [2011] IEHC 266, para. 3.4). For the purpose of these proceedings, the CRU accepts that a decision of the Irish SEM-C may be treated as a decision of the CRU.
14. The SEM Oversight Committee ("SEM-OSC") is comprised of two persons, being the Director of Security of Supply and Wholesale in the CRU, and the Director of Markets in NIAUR. The SEM-OSC has delegated authority from the SEM-C and has a role in reviewing matters to be decided by the SEM-C and in making recommendations.
15. The CMDRB is the Capacity Market Dispute Resolution Board. As the name suggests, it provides participants with a dispute resolution mechanism whereby an independent panel of experts assess disputes arising out of the qualification process under the Code. Where a dispute is referred to the CMDRB, its decision shall be in writing, providing reasons (B.14.8.6). The decision of the CMDRB is binding on the parties, subject to the provisions of the Code. In the present cases, the applicants challenge the validity of the CMDRB decision refusing the review in each case.
16. The rules which govern the Capacity Market, and the holding of Capacity Auctions are set out in the Capacity Market Code (the CMC). This is the key document in the case. A number of provisions of the CMC are relevant to the issues I have to decide.
17. Section B.2 of the CMC is headed "Governing Law and Jurisdiction" and provides that:
"B.2.1.1 This Code and any disputes arising under, out of, or in relation to this Code shall be interpreted, construed and governed in accordance with the laws of Northern Ireland.
B.2.1.2 Subject to the provisions relating to the Dispute Resolution Process, the parties hereby submit to the jurisdiction of the Courts of Ireland and the Courts of Northern Ireland (and no other court) for all disputes arising under, out of, or in relation to this Code."
18. There is a dispute between the parties on the fundamental question as to whether Irish law or Northern Irish law is the applicable law for the purposes of this judicial review. I will address this issue at the commencement of my analysis section.
19. FQDs are dealt with in E.9.4 of the Code. For reasons of brevity, I will mention only some of the paragraphs:
"E.9.4.3 The System Operators shall submit the Final Qualification Decisions to the Regulatory Authorities for approval.
E.9.4.4 The System Operators shall use reasonable endeavours to submit the Final Qualification Decisions in accordance with paragraph E.9.4.3 on or before the Final Qualification Submission Date specified in the applicable Capacity Auction Timetable...
E.9.4.6 If the Regulatory Authorities reject a Final Qualification Decision submitted by the System Operators under paragraph E.9.4.3, then the Regulatory Authorities may by written notice to the System Operators determine an alternative decision in substitution for that of the System Operators...
E.9.4.8 The Final Qualification Decisions approved, are deemed to have been approved, by the Regulatory Authorities (and as substituted by the Regulatory Authorities) under this section E.9.4 are final and binding on the Parties...
E.9.4.12 For the avoidance of doubt, the System Operators (or the Regulatory Authorities under paragraph E.9.4.6) may reject an Application for Qualification for any of the reasons contemplated in section E.7 in light of any updated information or change in circumstances affecting the participant which they become aware of, notwithstanding that they may not have done so at a previous stage in the Qualification Process."
20. The CMC establishes a layered decision-making process that essentially has five stages:
(i) Provisional Qualification Decision by the SOs (PQD);
(ii) Application for a review;
(iii) Appeal to the CMDRB;
(iv) Final Qualification Decision (FQD); and
(v) Approval of FQD by the Regulatory Authorities
21. Two separate applications for judicial review concerning the same Capacity Auction were brought in Northern Ireland by Prime Power Generation Limited and EP Kilroot Limited. Those applicants challenged the decisions of the NIAUR, in respect of decisions taken by the Regulatory Authorities to approve the FQD submitted by the SOs, determining that those applicants' respective Candidate Units did not qualify to participate in the Capacity Auction. Both EirGrid and SONI were notice parties to the Northern Ireland proceedings.
22. The RAs, the NIAUR and the CRU issued a written notice pursuant to section D.2.1.10 of the CMC amending the timetable for the Capacity Auction for it to be held between the 3rd and 5th of December 2024. At the system operator's invitation, the court in Belfast granted interim relief on the 19th November 2024 requiring that they comply with this amended timetable. On the 27th November 2024, the High Court of Northern Ireland (Scoffield J.) delivered judgment in the Northern Ireland proceedings - Prime Power Generation Limited & EP Kilroot Limited v. Northern Ireland Authority for Utility Regulation [2024] NIKB 102.
23. Scoffield J. made an important legal finding in the Prime Power proceedings which has implications for the two cases before me. Section E.7.2.1 of the Code provides only that the System Operators may reject an application for qualification where one of the nominated conditions are met. This is in contrast to the mandatory grounds for rejection in section E.7.5.1. Scoffield J. held that there was no evidence that, having identified an issue with the feasibility of the Prime Power application under E.7.2.1 of the Code, either the SOs or the RAs recognised that this was only a discretionary basis for rejecting the application. Scoffield J. upheld the submission that where discretion is conferred, the deciding authorities should both appreciate that there are options open to it and address how its discretion should be exercised; or at least keep its mind open to the exercise of a discretion in a case where a policy is applied (para. 189). I will return to this issue because it is one of the main grounds of challenge relied upon by both applicants before me.
24. On the particular facts of the case, Scoffield J. declined to grant relief to Prime Power, holding that, based upon the court's view of the evidence, remitting the matter "would inevitably result in the same decision", i.e. rejection of Prime Power's application. The judge concluded at para. 191 that "intrusive relief" should not be granted in relation to this legal error.
25. In the EP Kilroot case, Scoffield J. quashed the RAs' decision on the basis of procedural unfairness (paras. 213-225). The Judge upheld a small, but important number of complaints made out in the case relating to additional information from the SOs and EP Kilroot which ought to have been available to the SEM-C before making its final decision. Accordingly, he remitted that application back to the SEM-C to be further considered in accordance with law.
26. As of the time of the case proceeding before me in December 2024, no appeal had been lodged against the Northern Ireland judgment.
27. Capacity Auctions are helpfully described in the judgment of Scoffield J. as follows:
"[13] Capacity auctions are the means by which participating power-generation undertakings may sell electrical capacity from candidate units to the grid for a given capacity year. Qualified participants submit sealed bids online to sell capacity to the grid, specifying the amount of wattage of capacity being offered and the price for that capacity. At the conclusion of the auction, the bids are arranged from lowest to highest. For a given capacity year, the SOs will have a total capacity which they wish to purchase from participants. Generally speaking, they accept the lowest bid for capacity and continue accepting higher bids in order until the total capacity requirement is met. (I understand that there are some circumstances in which higher-priced bids may take priority over lower priced bids through the auction software where, for instance, this is required in order to avoid significant over-procurement which may breach State Aid requirements). The 'market clearing price' is set at the level of the bid in which the total capacity requirement was ultimately met; and that then becomes the price paid to all successful bidders who bid at or under that price. Such auctions are a mechanism designed to ensure that the generation capacity on the island is sufficient to meet demand and that the regulatory-approved generation adequacy standard is satisfied."
28. The Kilshane proceedings were grounded on an affidavit of Brian McMullan, Project Lead of Kilshane Energy Limited. Mr. McMullan confirms the accuracy of the affidavit of Stuart Draffin and verifies the contents of the applicant's statement of grounds. Mr. McMullan has worked in the area since 2012 and is responsible for the management of various Kilshane projects. He has acted in this role on behalf of Kilshane in previous Capacity Auctions, wherein Kilshane has been both a successful qualificator and bidder on a number of occasions.
29. On the 1st October 2024 Mr. McMullan attended and participated in the hearing of the CMDRB for Kilshane Energy in relation to these and other Candidate Units. He was joined by the legal team on behalf of Kilshane Energy and Ciaran Hughes, Project Director at H&MV Engineering. EirGrid was represented by Aodhagan Downey, Capacity Market Team Lead, who was joined by other employees of EirGrid, including Conor Farrell. Kilshane's legal team outlined Kilshane's position regarding the Candidate Units. It was raised that another applicant, PAM Energy Supplies Limited, successfully qualified for an earlier auction, with comparable projects and operating from the same Huntstown site, and with the same electrical connection to the same substation at Woodland. It was submitted that to not qualify Kilshane's Candidate Units would be irrational and inconsistent with this earlier decision.
30. In response, Mr. Farrell outlined that EirGrid maintained concerns in relation to the ability of Kilshane to construct a 400 kilovolt (kV) connection between the Candidate Units and the substation at Woodland. This was on the basis of comparison to previous and current projects that EirGrid had been involved in.
31. Mr. McMullan says the account provided by EirGrid was entirely anecdotal and related to projects subject to significantly different regulatory requirements. Mr. McMullan's main argument is that none of the material presented by Mr. Farrell at the hearing had previously been raised with Kilshane as illustrating the reasons for rejecting their qualification application for being "not feasible" - whether in the provisional decision, review decision or in the written submissions of EirGrid. He says it was not possible to interrogate this material in any meaningful way, or to provide an appropriate response.
32. Mr. McMullan avers that, although Kilshane had made very clear and detailed written submissions in relation to its position, and in reply to those of EirGrid, as well as providing works schedules from H&MV Engineering, EirGrid chose not to engage with these in any way. The decision of the CMDRB does not record whether EirGrid provided additional written details of the projects outlined by Mr. Farrell, before or after the hearing. Certainly, no further written detail was provided to Kilshane.
33. Mr. Hughes of H&MV Engineering provided further detail on behalf of Kilshane, developing the existing evidence of the proposed connector works and the timetable already provided to EirGrid. He outlined H&MV Engineering's expert experience in relation to projects similar to the Candidate Units and explained that, based on the limited information provided by Mr. Farrell, there were a number of specific and significant differences between the circumstances that Mr. Farrell had alluded to and the present Candidate Units - particularly the differing regulatory regimes that apply.
34. Mr. McMullan avers that the rejection of the qualification application by EirGrid and the decision to uphold that rejection by the CRU came as a shock, particularly as Kilshane had extensively cooperated with the review processes and provided significant amounts of information and expert evidence. He avers that these materials demonstrated beyond doubt that the delivery of the new capacity comprised in the Candidate Units was feasible. It does not seem consistent or coherent that PAM Energy Supplies Limited had qualified for previous auctions with comparable projects operating from the same Huntstown site, while the Kilshane Candidate Units were determined not to be feasible.
35. On this basis, Mr. McMullan avers that the process was unfair, particularly because EirGrid withheld, until the very last moment, its "actual grounds" for not qualifying the Candidate Units. This eliminated any proper opportunity for Kilshane to respond. Such an approach undermines the qualification process that is supposed to provide multiple stages, reviews, dispute resolution, and the exchange of information, to avoid such a situation.
36. The Kilshane application was also grounded on the affidavit of Stuart Draffin, Director of Kilshane Energy Limited. He outlines that Kilshane owns and operates a number of generator units and is in the process of building additional units. It is an active player in the energy market throughout Ireland.
37. The timeline of the Capacity Auction envisaged that on the 15th October 2024 EirGrid would, following a qualification and review process, submit FQDs in relation to applications to the Capacity Auction in respect of Candidate Units to the CRU, and that final qualification results would be approved by the CRU by the 7th November 2024. The Capacity Auction was then proposed to commence on the 21st November 2024 until the 28th November 2024.
38. In and around the 31st May 2024, Kilshane Energy applied to qualify for the auction in accordance with the CMC. The Candidate Units constituted proposed projects of two 299 MW open cycle gas turbines.
39. The Huntstown site was acquired in and around November 2021 and spans some 70 acres. An operation of one 293 MW open cycle gas turbine has already been successful in the T-3 2024/2025 CRM Auction, and Kilshane intends to construct a 220kV substation with approximately 5 kms of cable for electrical connection to the overall project, and an above ground installation which will connect to a 700m pipeline to provide for gas connection. He says approximately €110 million has been committed to be spent on the site to date, with an estimated total capital expenditure of €240 million. It is expected that they will be in operation in and around August 2029 (this was later corrected by counsel to August 2028).
40. Mr. Draffin says that PAM Energy Supplies Limited was established to construct and operate comparable generators to the Candidate Units on the same Huntstown site, with an identical electrical connection at the same substation at Woodland. On that basis, on the 14th April 2023, PAM Energy Supplies Limited applied to participate in the 2026/2027 T-4 Auction, which EirGrid qualified. However, it was not successful in the auction itself, which in turn defeated the project.
41. On the 16th August 2024, EirGrid issued a decision in relation to Kilshane's qualification application, provisionally determining that the Candidate Units did not qualify on the basis of para. E.7.2.1(f) CMC, namely that EirGrid considered that delivery of part or all of Kilshane's proposed capacity was "not feasible (either technically or in the applicable timeframe)".
42. On the 20th August 2024 Kilshane, in accordance with para. E.14.2.4 CMC, sought a review of this decision. On 28th August, EirGrid sought further information in relation to the application, which was provided by Kilshane on the 30th August.
43. On the 6th September 2024 EirGrid maintained its decision on review. Mr. McMullan sent an email replying to the substance of this decision and requested a review. On the 11th September 2024, as required by para. B.14.2 CMC, Kilshane raised a notice of dispute with the CMDRB.
44. On the 20th September 2024, Kilshane made written submissions to the CMDRB. On the same date, EirGrid made written submissions to the CMDRB and Kilshane replied.
45. On the 25th September 2024, EirGrid confirmed to the CMDRB that it did not propose to make a further reply.
46. On the 1st October 2024, the CMDRB sat and heard the dispute. At the hearing of the dispute both Kilshane Energy and EirGrid made oral submissions. On that date, the same panel of the CMDRB heard another dispute (against SONI rather than EirGrid) arising from a rejection of a qualification application involving Prime Power Generation Limited, in respect of a Candidate Unit in Belfast. The determination in that dispute issued on the 9th October 2024, and also gave rise to an issue relating to the interpretation of "feasibility" within the CMC. Importantly, Mr. Draffin exhibits that separate determination of the CMDRB, which I will now turn to consider.
47. In the Prime Power application, the same panel of the CMDRB at paras. 64 - 68 gave a ruling on the definition of "feasible" within the meaning of the Code. The CMDRB ruled as follows:
"65. Prime Power have expressed the view that something is feasible if it is not impossible and have referenced the dictionary definition as supporting that view. Consequently, if the connection to any one substation is not impossible, which Prime Power argue that it is not, then its application for qualification must necessarily be successful.
66. The SO argue that the word feasible, in its normal usage, requires that something must be reasonably possible, and in this instance the SO argues that the connection to the Castlereagh Sub-Station is not reasonably possible.
67. The CMDRB have considered the Parties submissions and have also noted the Collins dictionary definition of the word feasible as follows:
'feasible (1) able to be done or put into effect; possible
(2) likely; probable'
The above quotation focuses on the definitions only and omits other characteristics of the word.
68. The CMDRB consider that the Prime Power arguments focus on the first definition of the word and is not persuaded that is it the appropriate definition in the context of the Code.
69. The CMDRB agree with the SO and the term feasible in the context of the Code and E.7.5.1(f) in particular means probable or more likely than not, essentially the second definition in the dictionary." (Emphasis added)
48. Separately, Mr. Draffin says that on the 7th May 2024 the CRU, pursuant to s. 33 of the 1999 Act gave a direction to EirGrid. He exhibits that direction and says that it confirms that projects do not require planning permission in order to qualify for Capacity Auctions, making it much easier for undertakings such as Kilshane to bring on new capacity speculatively as an investment, in effect, drawing commercial justification for proceeding with the project by being successful in being allocated a trade in a Capacity Auction.
49. On the 9th October 2024, the CMDRB determined not to uphold Kilshane's dispute. On the 11th October 2024, Kilshane raised a notice of dissatisfaction as required by B.14.8 CMC. On the 14th October 2024, EirGrid confirmed that it would recommend to the CRU that Kilshane's Candidate Units be determined not to qualify for the auction in accordance with para. E.9.4.3 CMC.
50. On the 18th October 2024, Kilshane wrote to the CRU and requested that it reject EirGrid's decision not to qualify its Candidate Units per para. E.9.4.5 CMC. Kilshane followed up its correspondence with a further email on the 6th November 2024, requesting news of the decision and that the auction be postponed.
51. With effect from the 7th November 2024, the CRU approved EirGrid's decision not to qualify Kilshane Energy's Candidates Units.
52. The CRU wrote to Kilshane on the 8th November 2024 explaining the reasoning behind the CRU's decision to approve EirGrid's decision not to qualify the Candidate Units per E.9.4.5 CMC, and setting out its position regarding the need for the auction to proceed.
53. Mr. Draffin says at para. 35 that the rejection of the qualification application by EirGrid, and the subsequent decision to uphold that rejection by the CRU, came as a shock to him as Kilshane had cooperated with the relevant processes and provided significant amounts of information to demonstrate that the delivery of the new capacity comprised in the Candidate Units was feasible. He was surprised at the lack of engagement from EirGrid and the CMDRB with the evidence that Kilshane provided to support the application.
54. At para. 36 he states that Kilshane has every commercial incentive to ensure that it delivers capacity to the grid from these Candidate Units from 2028 onwards. He says Kilshane would have absolutely no reason to bid and post such performance security absent being extremely confident in its ability to provide the required surety.
55. He says that should the auction proceed without Kilshane, this would have significant and detrimental impact on Kilshane Energy and its financial future. The single electricity market is a monopsony - there is only one entity to which a power generation undertaking may sell electricity. Therefore, if Kilshane is unable to bid to sell electricity, then there will be no alternative buyer. This indeed occurred in the circumstances of PAM Energy; once it was unsuccessful in the 2027 auction, the company's project to construct a powerplant on the Huntstown site became commercially unviable and did not proceed. Kilshane, since its incorporation, has successfully qualified for four auctions with a contract awarded in respect of T-3 2024/2025. Kilshane takes seriously its role in ensuring security of supply for the electricity market on the island of Ireland.
56. Affidavits filed on behalf of EirGrid and the CRU offer a different perspective. One such affidavit is that of Tom Gallery, Access Planning Manager in the Transmission Power System Planning Team at EirGrid. Mr. Gallery's team was responsible for the rejection of Kilshane's initial 220 kV connection method proposals and consideration of their subsequent proposal to connect at 400 kV. On the 1st October 2024, he attended the CMDRB hearing as part of the EirGrid team. However, due to the discussion at the hearing revolving around the deliverability of the connection method within the auction timeframe, rather than the connection method itself, he was not called to speak.
57. Mr. Gallery responds to a number of the pleas made in the applicant's statement of grounds and averments in the affidavits of Mr. Draffin and Mr. McMullan. At the time of preparation of his affidavit, Mr. Farrell was not available to swear an affidavit.
58. Mr. Gallery recalls Mr. Farrell emphasising to the hearing that EirGrid had a more mature understanding of developing 400 kV cables of this length by reference to the Kildare Meath and East Meath North Dublin projects. During the hearing, Mr. Farrell referred to projects on the EirGrid website as they were directly comparable to Kilshane's proposed project. Both involved the use of 400 kV cables and connections into the Woodland 400 kV substation. There are no other comparable 400 kV projects involving buried cables of this significant length in this area, and so EirGrid's experience of these projects is, in EirGrid's view, relevant as the nearest comparators for what Kilshane are proposing, regardless of whether the works are being conducted by EirGrid or by a private entity as contestable works.
59. It is EirGrid's considered view based on substantial experience in delivering major grid infrastructure, and information from other providers in the market, that a facility requiring a 400 kV connection is a significantly more challenging project to deliver than one which depends on a 220 kV connection.
60. Mr. Gallery avers that the initial planning application was predicated upon a 220 kV connection, which did not correspond with the updated application for qualification for the 2028/2029 T-4 Capacity Auction made by the applicant. He notes that that application has since been withdrawn. He says that this is relevant to the reality of a risk of any prejudice being suffered by the applicant in terms of its capacity to deliver the project within the requisite timeframes.
61. During the CMDRB hearing Mr. Farrell further referenced issues which EirGrid had experienced in carrying out these projects, including engagement with relevant state agencies, local authorities and landowners and the requirement for the project to proceed as a Strategic Infrastructure Development ("SID") through An Bord Pleanála. Mr. Farrell spoke to delays and issues which would be caused should the applicants' cables traverse other utilities, as well as evident issues with the applicants' proposals to route their 400 kV cables along public roads.
62. Mr. Farrell spoke to the requirement for joint bays when laying a cable of this length, and how this might require public road diversions during construction and additional engagement with landowners. Mr. Farrell noted that none of these items had been covered in the applicant's project plan.
63. Mr. Gallery rejects the contention that the applicant was "ambushed" during the CMDRB hearing with a new rationale as pleaded in the applicant's statement of grounds. He says the grounds for rejection of the application remained its "feasibility". The hearing facilitated the hearing of further information as to why the applicant's application had failed to satisfy the feasibility criteria.
64. EirGrid's written submission to the CMDRB which was furnished to the applicant in advance set out EirGrid's position with respect to the dispute, albeit that further details were provided during the course of the hearing before the CMDRB.
65. Mr. Gallery concludes that Kilshane failed to submit satisfactory evidence as to how it could feasibly deliver the capacity within the required timeframes. EirGrid's submission at the CMDRB simply elaborated on a range of matters which would ordinarily be in the contemplation of a participant proposing to build a facility and deliver equivalent energy capacity.
66. The main verifying affidavit for EirGrid was sworn by Anne Fitzgerald, Head of Market Interface at EirGrid. Ms. Fitzgerald has managed the Capacity Market since 2018 and is also the Chair of the Capacity Market Board in EirGrid/SONI whose role is to review and approve the decisions put forward by the Capacity Market Team. The decision of the CMDRB was issued on the 9th October 2024 after which the SO submitted their FQD submissions to the RAs (acting through the SEM-C on the 15th October 2024). The SO also met with the SEM-OSC on the 18th October 2024.
67. The role of the SO, in making provisional SO qualification decisions, is to consider the feasibility of applicants' projects through a defined qualification process, assessing their capacity to deliver reliable electricity for the start of the relevant capacity period. Decisions are based on matters of technical evaluation and exercising, as required by s. E.7.1.2 of the CMC, the judgment reasonably expected of a "Prudent Industry Operator" performing a similar role in similar circumstances.
68. Ms. Fitzgerald says that given that the project concerned a proposal for new capacity which is currently unbuilt, the SO consider the technical feasibility of the project and whether the project can be ready to deliver the required capacity by the start of the relevant Capacity Market period.
69. Ms. Fitzgerald avers that in the SO email of the 6th September 2024, EirGrid communicated the outcome of the applicant's application for review in respect of the Candidate Units. Having reconsidered the application for qualification, the SO remained of the view that while the applicant was open to delivering a 400 kV connection contestably, it did not have sufficient detail that assured them such connection could be built within the timeframe. The SO therefore determined that delivery of part or all of the associated new capacity was not feasible in the relevant timeframe and upheld their decision to reject the application for qualification, in accordance with para. E.7.2.1(f) of the CMC.
70. Ms. Fitzgerald notes that Mr. Draffin in his affidavit avers that it is expected that the relevant Candidate Units will be operational in August 2029, some ten months after the Capacity Market period for the Capacity Auction in question commences in October 2028.
71. Responding to Mr. McMullan's affidavit wherein he references other projects that Kilshane have successfully qualified, Ms. Fitzgerald says that two of these projects are on the basis of 220 kV connections, and not the 400 kV connection which is the basis of the current application. Both the connection method and connection points for those two projects are completely different to the Candidate Units at issue here. On that basis, the SO believe that they are not suitable comparators.
72. Likewise, the SO do not accept that the PAM project referenced by Mr. Draffin is a direct comparator to the Candidate Units. There are two main reasons which differentiate the projects. Firstly, there was a change in the proposal around the length of cable required for Kilshane's connection to Woodland, the estimate of which increased from approx. 16 kms to approx. 21kms. Secondly, the SO's understanding of the timelines for procurement of 400 kV high voltage equipment, as well as the planning and design timelines around such a connection, "are more mature this year compared to last year" when PAM's application was considered.
73. Moreover, Ms. Fitzgerald says that the decision to qualify PAM for the 2027/2028 T-4 Capacity Auction was "extremely marginal" and the project had been provisionally rejected at both the Provisional SO Qualification Decision and Application for Review stage, before subsequently being accepted following the submission of further information.
74. Ms. Fitzgerald avers that the SO did not apply a test for feasibility that requires an applicant to demonstrate that delivery of capacity should be "more likely than not". She says that the approach of the SO was recorded at para. 66 of the CMDRB decision, namely that it utilises the ordinary meaning of the words which is that something must be "reasonably possible". She references para. 69 of the CMDRB decision where the CMDRB states:
"The CMDRB agree with the SO and the term feasible in the context of the Code and E.7.5.1(f) [sic] in particular means probable or more likely than not, essentially the second definition in the dictionary."
75. Ms. Fitzgerald says that for the avoidance of doubt, the SO did not impose the CMDRB's more onerous requirement of "more likely than not" when assessing applications for qualification.
76. She avers that the interpretation applied by the CMDRB "reflected its own understanding and consideration of the SO's submissions". Underpinning the assessments carried out by the SOs is the feasibility of a proposal against the risks and consequences of non-delivery. Qualification assessments are measured against those risks in the context of exercising reasonable judgment as prudent operators and the feasibility of technical delivery within the required timeframe.
77. I have also considered but, for reasons of brevity, need not summarise other affidavits sworn on behalf of EirGrid including affidavits from Aodhagan Downey and Keith Gibson BL who swore an affidavit of laws concerning the issue as to the applicable law.
78. The CRU's grounding affidavit was sworn by John Melvin, Director of Security of Supply and Wholesale of the CRU. He makes the affidavit from an examination of the records of the CRU, including those of the Irish SEM-C. Mr. Melvin provides very useful background information regarding the SEM, the Capacity Market, the CMC, the Capacity Auction process and outlines the CRU's experience of Capacity Auctions to date. Importantly, he outlines at some length the potential consequences of infeasible units qualifying for Capacity Auctions and at para. 55 and onwards he outlines the FQDs in respect of Kilshane's Candidate Units. The CRU was not involved in any stages of the process leading up to the hearing before the CMDRB on the 1st October 2024, nor did it participate in that hearing.
79. On the 15th October 2024 the SOs submitted the Kilshane FQD to the Regulatory Authorities for approval in accordance with s. E.9.4.3 of the CMC. Their recommendation was that Kilshane's application for qualification should be rejected on the basis of feasibility.
80. Mr. Melvin explains that the SEM-C takes decisions on matters referred to the RAs under section E.9.4.3 of the Code. In this particular case, the SOs requested a meeting with the RAs and the SEM-OSC, which occurred on the 18th October 2024.
81. The SEM-C met on the 31st October 2024. On the basis of legal advice received by the SEM-C, the SEM-OSC was directed to review the 18th October meeting minutes in order to determine whether they contained any new information relevant to the Kilshane FQD such that it should be provided to Kilshane so that Kilshane could reply. The SEM-OSC determined that they contained no such new information.
82. On the 4th November 2024 the SEM-C resumed the 31st October meeting which had been adjourned to consider FQDs, including the Kilshane FQD. Minutes were taken, and those covering the meetings of 31st October and 4th November were produced in respect of Kilshane, addressing inter alia the Kilshane FQD. Mr. Melvin makes a number of observations about the meeting of the 4th November. First, he says each of the SEM-C members confirmed that they had received and read the materials referred to in Parts 1-3 of Annex A to the Kilshane minutes.
83. Second, Mr. Melvin says that the SEM-C members considered this material which included Kilshane's notice of dissatisfaction of the 11th October 2024. This document expressly identified several bases upon which the determination was allegedly flawed, and the arguments made therein were carefully considered by the SEM-C, along with the relevant correspondence, memoranda and documents. The SEM-C members confirmed their agreement to adopt the interpretation of the terms "feasibility", "feasible", "achievable" and "achieved" as set out in Annex B of the Kilshane minutes.
84. Third, the SEM-C members addressed whether they should approve or reject the Kilshane FQD on the basis of the "Decision Tree" described in Annex C of the Kilshane minutes. Part of the "decision tree" was the SEM-C's agreed policy whereby FQDs submitted by the SOs would only be rejected if "plainly wrong". In circumstances where the SEM-C members saw no basis upon which to conclude that the Kilshane FQD was plainly wrong, the SEM-C members approved the Kilshane FQD.
85. Mr. Melvin goes on to deal with the timeline for the Capacity Auction and outlines extensively the difficulties and risks that would arise in the event that the timeline was upset or delayed. He also addresses a number of claims made by Kilshane concerning the implications for the company if the FQDs are allowed stand.
86. The Coolpowra proceedings are mainly grounded upon the affidavits of Mr. Nigel Reams who is a Director of the applicant company. The first applicant is known as Coolpowra Flex Gen. The second applicant's previous name was Lumcloon Power (E) Limited, and it then changed its name to Coolpowra Bess Limited. In the documents exhibited for the purposes of the application, the second applicant was known as Lumcloon Power (E) Limited. The companies are both part of the Lumcloon Energy Group, founded by Mr. Reams, which has at its focus the development of battery energy storage systems.
87. Lumcloon Energy has significant experience with the consent process involved in the development of large-scale power projects, having previously developed facilities including, inter alia, the largest battery development in Ireland operational at Shannon Bridge, County Offaly.
88. The companies submitted two applications for qualification pursuant to the Code on the 31st May 2024. Coolpowra Flex Gen applied to qualify three new gas-fired generator units which it proposes to develop, each with the capacity to produce 385 MW of electricity. The proposed development is in Co. Galway and constitutes the construction of the three gas turbines, a 25 km gas pipeline, and a 400 kV substation. The application constitutes a Strategic Infrastructure Development ("SID") under the Planning and Development Act 2000. The application for permission is currently with An Bord Pleanála and a decision was due on the 13th January 2025.
89. A separate application was submitted by Lumcloon Power (E) to qualify nine battery modules which it proposes to develop, each with the capacity to produce 100 MW of electricity (900 MW in total). Again, this development is in Co. Galway adjacent to the first development. It would use the same substation referenced above. An application was made to Galway County Council on the 8th July 2024 and was refused on the 30th August 2024. A first party appeal to An Bord Pleanála was lodged on the 26th September 2024 and a decision was due on the 7th February 2025.
90. On the 16th August 2024 both companies' applications were rejected by EirGrid when it issued its provisional decisions not to qualify the companies. Mr. Reams contends that under para. E.7.1.1 of the Code, the default provision is that EirGrid shall accept an application for qualification and determine that a relevant Candidate Unit is qualified to participate in a Capacity Auction, except in defined circumstances set out thereafter.
91. Mr. Reams states that the reasons given by EirGrid for refusing the applications are very short and are made by reference to s. E.7.2.1(f) of the Code which provides as follows:
"E.7.2.1 The System Operators may reject an Application for Qualification for a Capacity Year in respect of a Candidate Unit or combination of Candidate Units where:
...
(f) they consider the delivery of a part or all of any New Capacity proposed in the Application for Qualification is not feasible (either technically or in the applicable timeframe)"
He cites the reasons stated in the decision as follows:
"(i) In respect of Coolpowra Flex Gen's application: "REJECT_NOT_FEASIBLE 25km of gas pipeline considered a Strategic Infrastructure Development. SID approval can take from 18-24 months. Delivery not possible for 1st October 2028 on this basis. New 400 kV transmission station considered not feasible in the timeframe. Limit of 1000 MW onto the 400 kV line at Oldstreet...
(ii) In respect of Lumcloon Power (E)'s application: "REJECT_NOT_FEASIBLE: Development of a new 400 kV transmission station is considered not achievable in the timeframe. Limit of 1 GW can be accommodated at any new Oldstreet 400 kV station...".
92. Mr. Reams says that although the reasons are limited and very unclear, it appears that the companies were refused for qualification on the basis that EirGrid were of the view that the transmission station would not be deliverable by the 1st October 2028.
93. Referencing the definition of 'new capacity' in the glossary to the Code and in chapter 5 thereof, Mr. Reams says that "new capacity" does not include transmission system upgrades, and so EirGrid's decisions were based entirely on irrelevant considerations. Further, EirGrid bears the statutory responsibility for developing and operating the transmission system to the grid, and therefore EirGrid appears to be refusing the companies' applications based on its predicted inability to meet its own statutory obligations.
94. Mr. Reams contends that the impugned decisions were unreasonable and factually flawed, in that EirGrid did not take relevant factual matters into account and did not exercise the judgment of a prudent industry operator as required by para. E.7.1.2 of the Code. In particular, its determinations of what was achievable in the planning process were significantly wide of the mark, and an incorrect threshold was applied whereby EirGrid appeared to have a fixed idea of what was "feasible". Further, EirGrid failed to take into account Lumcloon Energy's previous track record, and failed to acknowledge or consider that, even if it concluded that the delivery of the new capacity was not feasible, it continued to have a discretion to accept the qualification application. A fixed policy of refusing applications which were held not to meet the threshold in para. E.7.1.2 of the Code appears to have been applied.
95. Accordingly, on the 19th August 2024 the companies submitted applications for a review of the provisional decisions. On the 6th September 2024, EirGrid issued decisions affirming its earlier provisional decisions.
96. The Coolpowra companies raised notices of dispute in accordance with para. B.14 of the Code. Subsequently the companies and EirGrid made written submissions. A CMDRB was established in accordance with the Code and a virtual hearing took place on the 27th September 2024. Mr. Reams was present at the hearing and the companies were represented by Alex McClean.
97. Mr. Reams avers that at the CMDRB hearing, EirGrid, without notice to the companies, called wholly new evidence, including evidence on extraneous matters, in an attempt to introduce new alleged reasons for its refusal to qualify the companies. Further, a representative of EirGrid remarked that, due to the scale of the Lumcloon projects, they could displace other market participants.
98. On the 9th October 2024 the CMDRB issued its decision, upholding EirGrid's decision that it was entitled to take into account any grid upgrade connection requirements for the purposes of assessing "new capacity" and that EirGrid's decision to exclude the companies was reasonable and compliant with the Code.
99. Mr. Reams says there are several aspects of the CMDRB's decisions that are of concern. First, the CMDRB applied the wrong factual threshold and reversed the burden of proof in relation to the issue for decision. Mr. Reams says the question was whether EirGrid had shown that the connection was not feasible, not whether the applicants had demonstrated that it was feasible. This was important, says Mr. Reams, because it justified EirGrid's position that a very high (and in the applicant's view, unrealistic) level of detail regarding the construction of the projects was required.
100. In its application for a review decision in respect of Coolpowra Flex Gen's Candidate Units, EirGrid relied upon multiple items of information extraneous to the application, including advice allegedly provided to it by Gas Networks Ireland (GNI) on an unknown date and in an unknown form, and its alleged understanding of unspecified previous Strategic Infrastructure Development applications. In the CMDRB determination regarding Coolpowra Flex Gen's Candidate Units, this information was relied upon in rejecting the applicant's contention that the gas connection could feasibly be delivered.
101. The CMDRB relied on the said alleged information as outweighing the applicant's reliance on the direction received by GNI from the CRU, requiring them to expedite connections for successful applicants in the auction. Further, Mr. Reams contends that the alleged information relied upon by EirGrid regarding the timeline for deciding SID applications conflicts with An Bord Pleanála's statutory objective of determining SID cases within 18 weeks.
102. In the CMDRB determination regarding Coolpowra Bess's Candidate Units, EirGrid's recent experience of comparable projects was relied upon in rejecting the applicant's contention that the grid connection could feasibly be delivered. Mr. Reams says that no specific comparable projects were identified, nor was any written evidence furnished regarding such projects. The applicants had no reasonable opportunity to verify, challenge or otherwise engage with the said alleged information and advice.
103. Mr. Reams contends that EirGrid's reliance on the GNI information occurred in breach of para. E.6.1.2 of the Code which provides as follows:
"The System Operators shall conduct their assessments based on information provided in Applications for Qualification except to the extent that this Code allows them to use other information."
104. The companies submitted notices of dissatisfaction with the CMDRB's decision to the SOs. By FQD dated 7th November 2024, EirGrid rejected the companies' application.
105. Mr. Reams contends at para. 71, in summary of the above, that the decision-making process was flawed from the outset, and that EirGrid misapplied the relevant provisions of the Code which it relied upon to exclude the companies from participation in the Capacity Auction. Moreover, they misapplied the concept of feasibility for the purpose of the Code. He says the decision to exclude the company was based entirely on irrelevant considerations and is unreasonable and irrational.
106. Mr. Reams also refers to the fact that Bord na Móna was provisionally qualified for the Capacity Auction by way of a separate decision. The Bord na Móna project was submitted for planning in 2024, however, it is for a combined cycle gas plant. To be operational, it will require a 10 km gas pipeline (which may take longer to secure planning permission) and a complex 8 km long overhead line with two 220 Gas Insulated Substations (GIS) and one 400 kV substation (which is the same as that proposed by Coolpowra).
107. Mr. Reams says that the scale of construction on the Bord na Móna project is about four times the complexity of the proposed Coolpowra GIS - the battery technology is vastly simpler and faster to construct. In these circumstances Mr. Reams contends that it flies in the face of any rational decision-making process to apply the same qualification assessment process to each project yet conclude differently in respect of each project.
108. Anne Fitzgerald also swore a verifying affidavit for the purposes of the Coolpowra proceedings. At para. 11 she confirms that insofar as is relevant to the issues in these two cases, there are no differences between version 11.0 of the Code dated March 2024, and version 12.0 of the Code dated November 2024.
109. Ms. Fitzgerald does not agree with Mr. Reams' averment that "the default position is that EirGrid shall accept an application for qualification". In terms of the process by which such decisions are made by the SO, the provisional SO qualification decision is approved by the Capacity Market Board which is made up of managers from within SONI and EirGrid. The proposed decision and rationale for the decision is prepared by the Capacity Market Team which seeks approval from the Capacity Market Board. Similarly, any review of a provisional SO qualification decision is conducted by the Capacity Market Team on behalf of the SO, and the proposed review decision is sent to the Capacity Market Board for approval.
110. Similarly to the Kilshane project, the applicants' projects concern a proposal for new capacity which is currently unbuilt, and thus the SO consider, inter alia, the technical feasibility of the project, and whether the project can be ready to deliver the required capacity by the start of the relevant Capacity Market period.
111. Ms. Fitzgerald says that insofar as complaint is made about EirGrid's reliance on Gas Networks Ireland's views, Coolpowra Flex Gen signed a consent form authorising the SO to share information with GNI and Mutual Energy in respect of the three relevant units on a confidential basis, and vice versa. Accordingly, Coolpowra Flex Gen would have been aware that EirGrid would be in contact with GNI throughout the application process.
112. It is significant to note that para. E.7.2.1(f) of the CMC refers to whether the delivery of a part or all of any new capacity proposed in the application for qualification is feasible. The assessment of the feasibility of the delivery of new capacity necessarily entitles EirGrid to take into account any grid upgrade connection requirements and/or gas connection works.
113. The applicants seek to argue that they are entitled to the benefit of the "long stop date" as defined by Clause J.6.1.1(b) of the CMC in interpreting the "applicable timeframe" for the purpose of Clause E.7.2.1(f). Ms. Fitzgerald says that is incorrect. The applicable timeframe means the start of the relevant capacity year, in this case 1st October 2028. As part of this auction, all participants are competing to deliver capacity for the period 1st October 2028 to 30th September 2029. As well as the detrimental impact on security of supply, it is the System Operator's view that it would constitute undue discrimination to qualify a participant with a target delivery date outside the capacity year, as they would not be operating under the same constraints as other applicants and bidders.
114. Discussing the "long stop date", Ms. Fitzgerald says that in respect of a capacity award of more than one year, candidates would be entitled to an additional 18 months after the beginning of the capacity year to deliver before the SO would be obliged to terminate them for non-delivery. However, this allowance is only made for an "award of new capacity", that being a project which has successfully qualified for the auction and has been awarded a capacity contract. Ms. Fitzgerald stresses that it is not the case that applicants for qualification are entitled to the benefit of the long stop allowance even before they qualify.
115. Ms. Fitzgerald declines to make any comment about the Bord na Móna project in circumstances where those details are commercially sensitive and while the auction is ongoing, except to say that the SO are fully satisfied that the FQDs for all Candidate Units have been made in accordance with the provisions of the CMC.
116. At para. 34 Ms. Fitzgerald states that the SO did not apply a test for "feasible" that requires an applicant for qualification to demonstrate that delivery for capacity should be more likely than not. She says the approach of the SO was that "feasible" means "reasonably possible".
117. Mr. Aodhagan Downey also swore affidavits on behalf of EirGrid in the Coolpowra proceedings. These affidavits deal with "balance of convenience" issues with respect to the applicant's application for interlocutory relief, the applicants' complaints concerning the conduct of the CMDRB hearing, and the contention that the applicants were "ambushed" with a new rationale. I will deal presently with his affidavit dated 26th November 2024.
118. Mr. Downey was present at the CMDRB relating to the two Coolpowra applications and says that Mr. McClean argued that the SOs had erred in their provisional qualification decision to reject the Coolpowra projects (detailed at para. 7 of his affidavit). This was followed by the SO's presentation by Mark Kearn, Senior Lead Analyst with the Capacity Market Team, who made points in reply (detailed at para. 8).
119. The panel asked questions regarding statements made by both parties. Mr. Downey rejects the contention that the applicants were "ambushed" during the hearing with a new rationale, as pleaded in the statement of grounds. EirGrid's point remained that the SOs considered that the delivery of the new capacity was not feasible in the timeframe, and that the applicants had failed to provide them with a detailed schedule to underpin their submitted implementation plan demonstrating that they fully understood what was required to deliver 400 kV infrastructure at this scale.
120. The applicants failed to show how they could feasibly deliver the capacity within the required timeframe. The EirGrid submissions elaborated on a range of matters that a reasonable participant proposing to build a facility and deliver equivalent energy capacity would be expected to be aware of. A prudent transmission operator should take into account the various matters identified. These included what was said by GNI as to the indicated timelines of 60-72 months. Mr. Downey rejects the contention that EirGrid's reasons are speculative and premature in the context of delivery of a project in four years' time.
121. At para. 15 he refutes the averment of Mr. Reams that EirGrid ranked the project by reference to "the risk involved in permitting a large-scale project to the capacity auction". Projects with individual units larger than Coolpowra's have qualified for previous Capacity Auctions.
122. Separately Mr. Downey strongly refutes the assertion in Mr. Reams' affidavit that there was any element of pre-determination of the application. The applications were properly assessed and given the scale of the project, the delivery of the new capacity was considered to be not feasible within the timeframe.
123. On 30th September 2024, following the CMDRB hearing, the applicants ultimately, despite their protestations that such a detailed schedule was premature at this stage, provided a detailed Master Project Timeline and sought to address a number of the concerns expressed. These were not considered by the CMDRB as the submission window had closed. However, they were later considered by the SOs. Despite the efforts to address the concerns, the SO's view (which was supported by GNI) remained that the delivery of the new capacity was not feasible in the timeframe and a decision to reject the application for qualification was submitted to the Regulatory Authorities on 15th October 2024.
124. Mr. Melvin also swore an affidavit on behalf of the CRU in the Coolpowra proceedings. From para. 47 onwards he addresses the potential consequences of an indefeasible candidate unit qualifying for capacity auctions. These include the fact that SOs would have reduced confidence in the unit, making it more challenging for the SOs to reliably forecast a future gap between supply and demand. If such projects were successful in a Capacity Auction, but subsequently failed to deliver, or delivered late, it may have consequences for subsequent Capacity Auctions and for security of supply generally or may dampen competition in the wider energy markets. Failure to deliver may result in the retention of less efficient plants and therefore there would be "more polluting" forms of power generation on the system for longer.
125. On 15th October 2024, the SOs submitted FQDs, including the Coolpowra FQDs, to the RAs for approval in accordance with section E.9.4.3 of the CMC. The SOs requested a meeting with the RAs and the SEM-OSC, which occurred on 18th October 2024. He exhibits notes made by individuals in relation to this meeting.
126. On 4th November 2024 the SEM-C resumed the 31st October meeting which had been adjourned to consider, inter alia, the Coolpowra FQD. Minutes were taken at this meeting and minutes covering both the 31st October meeting and 4th November meeting were produced, addressing the Coolpowra FQDs.
127. Mr. Melvin at para. 65 onwards makes several observations about the 4th November meeting as addressed in the Coolpowra minutes. Frstly, each of the SEM-C members confirmed that they had received and read the materials referred to in parts 1-3 of Annex A of the Coolpowra minutes. A list of the relevant materials considered is set out within para. 65 of Mr. Melvin's affidavit.
128. Second, the SEM-C members considered this material, including Coolpowra's notice of dissatisfaction detailing complaints in respect of the interpretation of the term "feasibility" applied by the SOs. The SEM-C members confirmed their agreement to adopt the interpretation of the terms: "feasibility", "feasible", "achievable" and "achieved" as set out in Annex B of the Coolpowra minutes.
129. Third, SEM-C members addressed the question as to whether to approve or reject the Coolpowra FQD on the basis of the "decision tree" described in Annex C of the Coolpowra minutes. Part of that "decision tree" was the SEM-C's agreed policy whereby FQDs submitted by the SOs would only be rejected if "plainly wrong". In circumstances where the SEM-C members saw no basis on which to conclude that the Coolpowra FQDs were plainly wrong, the SEM-C members decided to approve the Coolpowra FQDs.
130. At this point, I think it is appropriate to pause for a moment and note that at no point in Mr. Melvin's affidavits - or indeed in the affidavits of Ms. Fitzgerald or Mr. Downey - is there any reference to either EirGrid or the CRU exercising a residual discretion under section E.7.2.1(f) of the Code. This is relevant to one of the grounds of challenge maintained by both applicants concerning the meaning and effect of E.7.2.1(f) of the Code and whether, properly construed, it gives rise to a necessity for the decision makers to carry out the residual discretionary exercise of considering whether an application should be admitted, notwithstanding the decision maker's view that the delivery of a part or all of any new capacity is not feasible. On the applicants' case, EirGrid and the CRU are vested with a discretion whereby they are entitled, but not obliged, to refuse the qualification application in such circumstances. I will consider this ground of challenge in greater detail later. For the moment, it might be noted that, as a matter of fact, there is no express averment by any deponent on behalf of either EirGrid or the CRU as to any such residual discretion having been carried out. In my view, that is significant.
131. Kilshane acknowledge that in certain circumstances, the court should pay curial deference to expert regulators where they enjoy a greater level of expertise or specialised knowledge. However, Kilshane contends that this is distinct from an exculpation of the court's inherent jurisdiction of review. Moreover, a regulator must abide by fair procedures and exercise its functions lawfully. Kilshane says that the issues before the court do not concern technical matters. Rather, they concern orthodox issues of interpretation, fair procedures and the consideration of evidence which are urged to be best determined by the court.
132. The respondents refused the Kilshane application on the basis of an adverse finding under para. E.7.2.1(f) CMC: "the delivery of a part or all of any New Capacity proposed in the Application for Qualification is not feasible (either technically or in the applicable time frame)".
133. The test for feasibility should be assessed in its proper context and is not intended to only filter in projects that are guaranteed to be delivered. Rather, it is intended to exclude projects that are plainly unachievable and impracticable. The applicant urges that that is simply not the case for its Candidate Units.
134. Submissions were made to the CMDRB as to the interpretation of "feasible". The applicant submitted that the term should bear its plain, ordinary and natural meaning - reasonably achievable or reasonably practicable - which is to say, less than a likelihood or probability.
135. At para. 45 of its determination, the CMDRB records that it did not accept the applicant's interpretation of feasibility; however, it does not positively identify or record in its decision what definition it applied.
136. The same panel of the CMDRB in Prime Power (discussed above), which was heard and determined on the same day, adopted a definition of "feasible" that requires an applicant for qualification to demonstrate that delivery of capacity is more likely than not. Kilshane says that this interpretation is plainly erroneous and at odds with the plain meaning of the term, and contrary to the text of the CMC. Moreover, Kilshane now relies upon the judgment of Scoffield J. (which only became available on 27th November) wherein he definitively rules on the applicable test for feasibility at paras. 131 to 135 of that judgment.
137. If one assumes that the CMDRB did not adopt inconsistent definitions of "feasible", it must follow that the panel applied the wrong test when considering the Kilshane application and, on that ground alone, the process is fundamentally flawed. It cannot be the case that the impugned decisions are defensible in any respect if it is accepted that the incorrect interpretation was applied in the course of the qualification application process.
138. Kilshane called expert evidence in relation to the deliverability of its Candidate Units, provided timelines and documentation to support its contentions, and identified a comparable project - that of PAM Energy Supplies Limited– which operated from the same Huntstown site with the same electrical connection to the same substation at Woodland, and was determined by EirGrid to be feasible (affidavit of Stewart Draffin para. 14).
139. Separately, Kilshane argued that, insofar as the CMDRB interpreted E.7.2.1(f) beyond temporal or technical feasibility to include matters such as procurement logistics, planning or matters going to commercial viability or risk, this was also erroneous and plainly wrong.
140. On the 7th May 2024, the CRU gave a direction to EirGrid which, in attempting to ensure security of supply for the Irish energy market, provides that in the interpretation of the CMC, the absence of planning permission shall not in itself be a reason to determine new capacity is not feasible. Kilshane submits that the CMDRB determination failed to have sufficient regard to the CRU direction and also breached para. E.7.2.1(f) which, it contends, expressly limits the scope of feasibility temporally and technically. Insofar as the CRU has now sought to re-characterise its own direction, this amounts to a post hoc gloss on the CRU direction.
141. In oral submissions, counsel for Kilshane focused on what he termed the "non-engagement" by EirGrid with the Kilshane application in the run up to the CMDRB hearing. EirGrid had asked in correspondence at the review stage if Kilshane would be willing or able to deliver a 400 kV connection "contestably" (meaning the applicant company will build it themselves) by the 1st October 2028. Kilshane replied by correspondence of the 28th August 2024 that they were prepared to do so and they furnished a draft delivery schedule confirming the feasibility of delivering the electrical connection to meet the T-4 timeframe. Subsequently, on the 6th September 2024 Kilshane sent in quite a detailed works schedule from a firm of engineers called H&MV Engineers. According to Kilshane, this demonstrated that they could provide the connection by March of 2028, seven months before the practicable deadline. There was no reply to this correspondence.
142. Accordingly, Kilshane invoked the CMDRB process and issued the notice of dispute under the Code. In their written submissions they pointed out that EirGrid had previously admitted an application from their sister company PAM Energy which it was said was an identical project with an identical connection to Woodland. Counsel submitted that in the EirGrid submission to the CMDRB dated the 20th September, the CMDRB do not address the schedules that had been furnished. The EirGrid submission claimed that certain assurances were absent, but these are not clearly identified. There must be a limit to what can be provided by way of technical or procurement evidence in the context of an application involving a new build. After all, that is why the governing test is whether a project is "reasonably deliverable" which, it is now established, is something less that the "likelihood" of delivery.
143. Kilshane contends that it was effectively "ambushed" or unfairly surprised at the CMDRB hearing. It is not disputed that either Mr. Gallery or Mr. Farrell provided the relevant evidence as part of the written process before the hearing date. That's how the Code is supposed to operate. Whilst the CMDRB hearing is an important part of the process, there is an obligation on EirGrid to engage properly at the earlier tiers of the process and to identify, in writing, the suggested shortcomings in the applicant's application. Kilshane points to the chronology of the review decision of the 6th December, the notice of dispute of the 11th September and then the hearing date for the CMDRB hearing of the 1st October. Kilshane complains that EirGrid had the detailed works schedule from H&MV Engineering from as early as the 6th September, but had not addressed it in any reasonable sense prior to the hearing.
144. It is against this backdrop that Kilshane contends that it did not have adequate opportunity to meet the case that was made against it very late in the day - at the hearing itself. There were no detailed reasons for the rejection of the application until the CMDRB hearing. EirGrid did not avail of the written part of the procedure, which is inconsistent with the spirit of the Code itself which is intended to be collaborative and cooperative. Counsel urged that the fair procedures issue should be viewed in a holistic way, assessing whether the overall process in the round - not just the CMDRB hearing - was fair or whether, as the applicant contends, it was a case of the applicant losing procedural ground at each stage due to the non-engagement by EirGrid.
145. As to EirGrid's contention that the FQD applied the correct text for feasibility, Kilshane contends that EirGrid allowed the mistaken legal reasoning of the CMDRB to infect the final qualification decision - "Reassurance after the event is no reassurance".
146. Counsel for Kilshane acknowledges that the minutes of the SEM-C meeting show that it did not misdirect itself on the definition of feasibility. However, the minutes show that the SEM-C asked itself the question of whether the decision comprised in the FQD was "plainly wrong". The minutes do not "flag up" that the CMDRB made a fundamental error in the process, nor do they illustrate the necessity for the SEM-C to exercise a residual discretion.
147. In these circumstances, Kilshane submits that the SEM-C consideration does not cure matters because there was no de novo reconsideration of the application, nor any acknowledgement of the errors that had occurred. Moreover, the FQD that went into the SEM-C was flawed because it was based off a flawed decision by the CMDRB. Counsel urged that because the SEM-C only asked the question whether the FQD was "plainly wrong", the earlier flaws in the process were not capable of being cured. The SEM-C looked at the whole issue through a very deferential prism - one that was overly deferential towards EirGrid's position.
148. Counsel relied on the finding of Scoffield J. that the respondents had fettered their discretion under E.7.1.1 of the Code. Where a public decision maker fails to exercise a discretion on the basis that it considers there is no discretion to exercise or fails to consider exercising such a discretion, this is unlawful. Reliance was placed upon Sherwin v. Minister for the Environment [2004] 4 I.R. 279 at paras. 26 to 30, Mulhare v. Cork City Council [2017] IEHC 288 at para. 30 and In Re Duff [2024] NICA 42.
149. Counsel urged that the CMC, properly construed, envisages a two-step decision being made by EirGrid - first, whether a new capacity is feasible within the meaning of the Code and secondly, even if it is not considered feasible, whether it should be approved for qualification, nonetheless. There is no evidence at all, in the various decisions of the respondents or indeed in their opposition to these proceedings, which suggests that this process was followed.
150. Kilshane complains that EirGrid chose not to reveal its basis for rejecting the qualification application until the hearing of the CMDRB. Neither the provisional decision, the review decision or its written submissions identify the actual basis for its refusal. In fact, even though the applicant had placed its cards face up throughout the qualification process, EirGrid opted not to reply to the applicant's written submissions, and so consciously chose to withhold the basis for the refusal.
151. It is extraordinary that EirGrid now seeks to re-evaluate its decision in relation to PAM Energy Supplies Limited by describing that decision as "marginal". This does not change the undisputed fact that the PAM Energy application was deemed feasible at the relevant time, and that any ex post facto differences should be viewed as questionable and contrived.
152. Kilshane's position is that the court should declare the applicant's qualification for the auction on the basis of the default provision of para. E.7.1.1. of the CMC. Alternatively, Kilshane contends that if remittal and reconsideration is required, the court should quash the various orders made by the respondents and remit the application for further reconsideration by the first respondent.
153. Senior Counsel for Coolpowra commenced by helpfully confirming that the court need only be concerned with the grounds of challenge pursued by way of oral submissions. The Coolpowra location in East Galway adjoins an existing 400 kV substation which connects to the main Moneypoint-to-Dublin power line, which is part of the national grid. Counsel emphasised that, because it is envisaged under the Code that applications may be made by undertakings that are not yet built, and that project horizons cover capital projects that are many years into the future, SOs and participants alike understand that the assessment of the feasibility of such large-scale projects is not viewed through a prism of probabilities, still less project certainties. This applicant envisaged that it needed to build its own 400 kV substation on its adjoining lands "contestably".
154. In broad outline, the respondents rejected the application on two separate grounds: first, the respondents decided that the substation will not be built as quickly as the applicant contends. Secondly, EirGrid rely on their own inability and say that the Moneypoint-to -Dublin line will only have a maximum availability of 1,000 MW at the relevant connection point, and EirGrid will not be in a position to upgrade the power line on time and transport the energy "through" the grid. In response, Coolpowra say that this unfair and contrary to the Code, because all the applicant should have to do is to get the capacity to the grid, not through the grid. Getting power through the grid is a matter entirely outside of Coolpowra's power and influence.
155. The grounding affidavit of Mr. Reams identifies the two separate elements of the Coolpowra application. Coolpowra Flex Gen applied to qualify three new gas fired generator units which it proposes to develop, the details of which are outlined in his affidavit above. A separate application was submitted by Lumcloon Power (E) to qualify nine battery modules which it proposes to develop, again detailed in considering his affidavit. With reference to the gas fired element of the project, EirGrid says there needs to be a gas connection built in order to supply the gas to the turbines that will create the electricity, and EirGrid contends that this will not be ready within the required timeframe. Coolpowra complain that EirGrid relies on assertions by an official in GNI has told them, namely that the connection will not have completed the planning process and built within the required time frame.
156. Regarding the battery-powered element of the enterprise, the respondents rely on only two grounds of refusal: first, the contention that the substation won't be built on time, and secondly the point concerning the need to transport capacity through the grid, as well as to the grid.
157. The applicant's judicial review papers identify essentially four grounds of challenge: first, the respondents impermissibly fettered their discretion by refusing the applications without considering the exercise of their residual discretion to accept the applications under E.7.2.1(f) of the CMC. Secondly, the respondents took into account irrelevant considerations in breach of E.6.1.2 of the Code and acted in breach of fair procedures by relying upon information from sources extraneous to the applicant's qualification application.
158. Thirdly, the respondents misapplied the burden of proof and disregarded the presumption of qualification provided for in the Code by placing the onus on the applicants to prove that the delivery of the new capacity was feasible.
159. Fourthly, the respondents acted irrationally and/or in breach of the principle of non-discrimination set out in para. B.6.2.1 of the Code by applying a standard of feasibility that was higher for the applicants than for other applicants.
160. Counsel for Coolpowra relied upon para. 189 of the judgment of Scoffield J. where he ruled that the respondents had fettered their discretion; there was no evidence the respondents recognised that this ground of refusal was a discretionary refusal; nor was there any evidence that they went on to separately consider how that discretion should be exercised.
161. Counsel submitted that where a breach of administrative law is established, the strong presumption is that a remedy will usually follow. Reliance was placed upon the decision of Donnelly J. for the Court of Appeal in H.A. v Minister for Justice.
162. In relation to the fair procedures argument, counsel relied upon the affidavit of Paul Collins regarding the suggested failure of the CRU to take into account the emails from Coolpowra dated the 30th September, 4th October and 11th October 2024. I will address this additional ground later in my judgment.
163. Section E.6.1.2 of the Code requires that the System Operators shall conduct their assessments based upon information provided in applications for qualification "except to the extent that this Code allows them to use other information". This meant that the SOs were not allowed to seek external information. Insofar as the SOs had relied upon information and correspondence from GNI, this was impermissible under the Code.
164. This gave rise to a breach of fair procedures because Coolpowra never received the GNI correspondence which apparently supported EirGrid's position that it would not be possible to build the pipeline within the required timeframe. Therefore, there was no opportunity given to Coolpowra to engage with this issue. The applicant had only learned of the GNI information mid-hearing before the CMDRB.
165. Coolpowra also relied upon the argument that the CMDRB had misapplied the test for feasibility. The CMDRB decision in the Coolpowra case was decided on the same day as the two decisions the subject matter of the Northern Ireland judgment in Prime Power.
166. While Prime Power held that the CRU decision effectively supersedes the EirGrid decision, counsel submitted, nonetheless, a fundamental misapplication of the test should ordinarily lead to an order of certiorari in respect of the outcome. The addition of the SEM-C layer of the process did not cure the situation from the respondent's point of view, because the later review is not a de novo appeal, but rather a limited review of earlier tiers of the process.
167. Separately, counsel relied upon the definition of "new capacity" and "generator" in the Code and submitted that this lent in favour of the point that delivery of capacity is to the transmission system, and not through the transmission system. It does not make logical sense that EirGrid's own issues or delays should be a ground for refusing the application. Moreover, EirGrid have a statutory responsibility to maintain and upgrade the transmission system. In these circumstances, it was urged that it was unfair or illogical to refuse the Coolpowra application on the basis of issues relating to EirGrid's own capabilities and default.
168. I will now summarise the respondents' arguments. Firstly, EirGrid submitted that there was insufficient evidence that there had been an error of law on the part of the CMDRB in the interpretation of "feasibility" in these two applications. Moreover, based upon the unchallenged averments in the affidavits of Ms. Fitzgerald, the correct legal test for "feasibility" had been applied by EirGrid. The test requires to be interpreted in context and imports the exercise of regulatory judgment. The question to be decided is whether in-time delivery is reasonably practicable or reasonably possible (see paras. 131-139 of Prime Power).
169. The applicants' arguments concerning the burden of proof are misconceived. The real question is whether an SO acting prudently considers whether the delivery of new capacity is not feasible, either technically or within the applicable timeframe. The judgment of Scoffield J. makes clear that a high level of curial deference should be accorded to the SOs and also to the CMDRB panel. Many of the issues involved are technical and concern issues of engineering, logistics, procurement and planning. There was ample basis for EirGrid's finding that delivery of the new capacity was not feasible, either technically or within the applicable timeframe. On no account could the impugned decisions be regarded as irrational and any suggestion to the contrary lacks reality.
170. EirGrid submitted that there was no procedural unfairness. The phased nature of the decision-making process meant that, in advance of the final decision, the issues had been well ventilated, and the applicants were fully aware of the concerns they had to meet. Reliance was placed upon para. 173 of Prime Power in that regard.
171. The allegation of reliance on irrelevant considerations was also misconceived. Decision making responsibilities are reposed in expert decision-makers precisely because of their domain expertise, to which they are entitled to have regard. Problems with procurement and logistics, and a failure to secure the necessary planning approvals, are self-evidently relevant to whether it is feasible to secure a connection within a particular timescale. This was the conclusion of the Northern Ireland judgment at para. 170.
172. In relation to the applicant's contention that there was a fettering of discretion, there is no evidence that EirGrid adopted a fixed policy. If it formed a clear view on feasibility, it was entitled to reject the application.
173. Insofar as the Northern Ireland judgment determines issues concerning the interpretation of the CMC, the Northern Ireland judgment should be followed. However, insofar as the Northern Ireland judgment determines issues of administrative law, Irish administrative law instead applies and, accordingly, the Northern Ireland judgment is persuasive only. In particular, Irish administrative law affords a very high degree of curial deference to the evaluative judgment of expert decision makers on matters within their expert competence. This principle is, in any event, supported by the Northern Ireland judgment at paras. 126/127.
174. It is not accepted that EirGrid misinterpreted the Code or breached the Code in any material respect. Moreover, the applicants had a full opportunity to make their case, and challenge the respondents' case, in the oral hearing before the CMDRB. The SO's final qualification decisions are required to give effect to CMDRB decisions (B.14.9.3 CMC).
175. Under the Code, as found by Scoffield J., the SO's FQDs become superseded by the decisions of the second respondent as part of the RA's decision to approve the FQDs. The Northern Ireland court so found at para. 130 of that judgment. The fact that the regulator may approve or reject FQDs made by EirGrid provides an independent layer of evaluative review. The regulator considers the evidence on file and reaches an informed decision on whether to approve or reject the FQD. In accordance with para. E.9.4.8 of the CMC, it is the FQDs approved by the RAs that are final and binding on the parties. Therefore, it is the approval by the CRU (acting through the RAs) which the applicants in reality seek to challenge in these proceedings.
176. Turning then to the individual grounds of challenge, the affidavits of Mr. Gallery and Mr. Farrell reject in clear cut terms Kilshane's complaints about being "ambushed" at the CMDRB hearing. Moreover, in regard to suggested non-engagement by EirGrid pre-hearing, the reality is that the system builds in a very full opportunity for applicants to make their case, and rebut EirGrid's case, at the oral hearing. Applicants can and do call factual and expert evidence and ventilate such issues as they may be advised.
177. Separately, the applicants' arguments that procurement, logistical planning or commercial matters or risks cannot be taken into account was firmly rejected at para. 170 of the Northern Ireland judgment. Such problems are self-evidently relevant to whether it is feasible to secure a connection within a particular timescale.
178. Based upon the facts of the cases, the arguments under the heading of "fettering of discretion" are artificial and unrealistic. When one considers all the relevant materials, it is clear that EirGrid engaged in an individualised assessment of the relevant applications and decided to refuse each application under E.7.2.1(f). There was no evidence that EirGrid adhered to some form of fixed policy. If the SOs were of a clear view - as they appeared to have been from the materials - that a project was not feasible within the requisite time frame, it is semantic to contend that the decision maker should engage in a formalistic staged decision process. If the evidence suggested marginal non-compliance for feasibility, then this line of argument might be understandable. However, in Kilshane's case for example, there was no precedent to support the proposed timelines for development of a 400 kV connection. In the absence of evidence of a fixed or unwavering policy, it is not a proper basis to impugn a decision to contend that the exercise of discretion is not obvious, if the final decision is well founded.
179. EirGrid contends that a decision to reject an application under E.7.2.1 is a unitary decision; it is not appropriate to seek to unpick such a decision in the manner contended for by the applicants. The SOs make an individualised assessment. On a fair reading of the materials, the SOs clearly addressed their mind to each of the applications before it, exercised its expert judgment and decided to refuse each of the applications on the grounds that the SOs considered that the delivery of the new capacity was not feasible under E.7.2.1(f) of the CMC.
180. Even if this Court were to follow the decision in the Northern Ireland proceedings and find that the SOs fell into error in this regard, EirGrid submits that on the facts of these cases there is nothing to suggest that if the SOs had not so erred, it might have led to a different outcome in either case. On that basis, it is submitted that the court should, as the court in Northern Ireland did, decline to grant certiorari.
181. A stark feature of the case is the fact that each layer of expert consideration led to the same conclusion - neither application was feasible within the relevant timeline. All the reasons for which the SOs decided to reject the application are set out in the PQD, the review process, the submissions to the CMDRB and the FQD.
182. In the Kilshane proceedings, the SO submitted to the CMDRB that there was a high degree of similarity between the SO's considerations for the purposes of E.7.2.1(f), and E.7.5.1 (b) and (c). It was submitted that the application for qualification could have, in the SO's view, been rejected on the basis of any of these subparagraphs. For all these reasons, EirGrid contends that no benefit could obtain to the applicant if certiorari were granted.
183. Insofar as the applicants make complaints abouts the CMDRB decision and process, that does not go to the validity of the SO's decision. The SOs were not required to set out in their decision reasons for the differences between the PAM Energy application and the applicant's application, or explain why PAM Energy qualified and Kilshane did not. In any event, the affidavit of Ms. Fitzgerald sets out the reasons why the earlier PAM Energy project was not an appropriate comparator to the application the subject of these proceedings.
184. The applicants are impermissibly inviting the court to substitute its own views for that of the decision of the expert decision maker. The SOs had before them material on which it could make the decision that it did (O'Keeffe v. An Bord Pleanála [1993] 1 I.R. 39) and it is well established that the court should not substitute its view as to what an alternative decision might be. The SO's decision enjoys a presumption of validity (Campus Oil v. Minister for Industry and Energy (No. 2) [1983] I.R. 88) and the applicants have failed to discharge the onus upon them of proving otherwise.
185. Senior Counsel for CRU addressed the court under the following broad headings: First, the facts of the two cases and the context as to the purpose of a feasibility analysis which lies at the heart of the proceedings. Second, the issue as to the governing law. Third, the role of the doctrine of curial deference and the principles to be applied. Fourth, the decision-making processes that arise under the Code and the necessity to assess the process in a holistic sense. Fifth, the approach of the SEM-C in deciding whether to approve or reject a FQD and sixth, the individual grounds of challenge maintained by each applicant.
186. Counsel endorsed the submissions made on behalf of EirGrid as to the connection between the feasibility assessment, and the need to have security of supply. Counsel relied upon the affidavit of Mr. Melvin as to the importance of ensuring delivery of capacity from the start of the relevant delivery period, and the necessity to ensure that projects are feasible before Candidate Units are permitted to participate in a Capacity Auction, so as to avoid compromising security of supply. Mr. Melvin's affidavits outline in detail the negative consequences that arise if infeasible units are admitted into the market.
187. The CRU was not involved in the CMDRB hearing, or indeed any of the earlier stages. Its position is set out clearly in the minutes that were distributed by the solicitors for the CRU. The Kilshane and Coolpowra minutes addressed the manner in which the FQDs were considered at the 4th November meeting. First, each of the SEM-C members confirmed they had received and read the relevant materials and been provided with access to certain further materials. Second, the SEM-C members considered this material. Having done so, the SEM-C members confirmed their agreement to adopt the interpretation of the relevant terms set out in Annex B of the Kilshane/Coolpowra minutes which indicated that "feasible" meant "reasonably practical, reasonably doable or deliverable". This conforms with the finding of Scoffield J. in the Northern Ireland case.
188. Thirdly, the SEM-C members addressed the question as to whether to approve or reject the FQDs on the basis of the "decision tree" described in Annex C of the minutes. Part of that "decision tree" was the SEM-C's agreed policy based on legal advice whereby FQDs submitted by the SOs would only be rejected if "plainly wrong". In circumstances where the SEM-C members saw no basis on which to conclude that any of the FQDs were plainly wrong, and having also considered whether, notwithstanding this view, it would nonetheless be appropriate to reject the FQD, the SEM-C members decided to approve the FQDs.
189. It is important to note, firstly, that neither applicant has criticised the "plainly wrong" standard adopted by the SEM-C in deciding whether to approve or reject the FQD. In any event, for a number of reasons, the "plainly wrong" standard was the appropriate and correct standard to adopt. The SEM-C itself does not prescribe the form of review that should be applied. The fact that the default position is for the FQD to be approved indicates that an interrogation of the correctness of the decision is not the aim of the SEM-C. It would be incongruous to allow for default approval where there has been any lapse of the prescribed time, yet require an approval or rejection decision be made within the prescribed time to be a merits-based enquiry.
190. The minutes of the meeting illustrate that the FQD review was a considered process which was proceeded by engagement between the SEM-OSC and the SOs including a meeting on the 18th October, 2024. Moreover, the SEM-C itself held its meeting over a number of dates - the 31st October, 4th November and 6th November 2024 - and a large number of participants carefully considered the FQDs that were before them. The members had the benefit of legal advice, and had the benefit of reading relevant documentation that had been circulated in advance. Very importantly, the process involved the making of decisions through a structured and logical "decision tree".
191. The issues which had caused the SOs to conclude that Candidate Units of each applicant should not qualify for the Capacity Auction - such as those in respect of project delivery timelines, system constraints and gas and grid connection issues - were serious issues precisely of the type that can cause generation capacities to be severely delayed or even not materialise. These were issues peculiarly within the expertise of EirGrid given its statutory functions as SOs with its undoubted experience of overseeing the development of such projects year on year.
192. Particular emphasis was placed upon the "decision tree" utilised by the SEM-C in both cases. The third question the members of the committee asked themselves was whether, even if the FQD is not plainly wrong on the basis of the indicated assessment, it would nonetheless be appropriate to reject the FQD, taking account of the SEM-C's various objectives and duties. Counsel for the CRU urged that this involves an "opening up" of the consideration such that the SEM-C has already gone through careful steps in terms of very rigorous assessment of the FQD, looking at whether or not there is new information, whether there is an alternative basis upon which it might be approved, and then going on to the third stage of considering, even if the conclusion is that the FQD is not plainly wrong, whether it would be appropriate to reject the FQD. Question 3 is sufficiently broad to allow for a full reconsideration, if that is deemed to be warranted by the committee. Counsel submitted that this additional layer of consideration meets the requirements of the "residual discretion" found by Scoffield J. to be exercisable under the Code. Merely because the decision makers did not expressly refer to this residual discretion is not sufficient under Irish law to make out a ground of fettering of discretion.
193. There was a meeting on the 18th October with the SOs. There were two meetings on the 31st October and the 4th November of the SEM-C itself. There was a giving and a consideration of legal advice, a review of the extensive documents that had been circulated to the committee members, and a making of the decision in line with a very clear and careful structure embodied within the "decision tree". None of this can be regarded as a "light touch" review. It is perfectly clear that the SEM-C interpreted "feasibility" correctly and applied the correct test.
194. It would not be correct to say that the review is so "light touch" that it is incapable of remedying a defect. It could hardly be suggested that a standard that is somewhat akin to the standard applied by an appellate court when varying errors of fact of a lower court is incapable of delivering a remedy or curing a defect. All told, counsel urged that the standard of review that was applied and the level of consideration undertaken as evident from the minutes was more than adequate to cure any frailties that may have occurred earlier in the process.
195. As to the argument that the CMDRB had applied the wrong test for feasibility, it was submitted that the applicants had failed to evidentially demonstrate that the invalid test was carried across to each of their cases. In any event, it is clear from the affidavits that EirGrid and the SEM-C applied the correct test. Moreover, the SEM-C had the capacity to cure earlier defects in the decision-making process, if indeed any arose at all.
196. Counsel invited the court to depart from the conclusion of Scoffield J. that the respondents had fettered their discretion. There is a subtle difference in the approach taken by the Northern Ireland courts and the approach taken in Irish administrative law. Relying upon a decision of Hogan J. in C.S.B. v. Minister for Social Protection [2016] IECA 116, it was submitted that an applicant must show evidence that the decision maker regarded himself as being bound to take the decision that was made. While counsel was not saying that applicants have to show a policy or show a large number of decisions that are all taken the same way, what they do have to show is evidence that the decision maker's mindset was that they were bound in terms of the decision they had to make. In other words, that the decision maker thought he had no discretion. Since the applicants had not shown evidence suggestive of a closed mind, there was no basis for concluding that the SEM-C had fettered its discretion.
197. As to Coolpowra's fair procedures argument, counsel submitted that if an individual who is party to a process before a decision maker fails to make reasonable efforts to put material before a decision maker, it cannot then complain that the decision maker did not have regard to those same materials. Counsel submitted there was a somewhat cavalier approach adopted by Coolpowra in the circumstances. Materials that are now proclaimed to be critical appear to have been sent to only one member of the CRU. On a fair reading of the facts, Coolpowra was entirely responsible for these documents not being before the SEM-C.
198. There is a level of agreement between the parties as to the issues that need to be determined in the two cases before the court. For varying reasons, it is not necessary for the court to determine all matters in dispute. I propose to consider the issues arising in the following sequence:
(i) Applicable law
(ii) Failure to exercise discretion/fettering discretion
(iii) Test for feasibility
(iv) Breach of fair procedures
(v) Did the CRU review cure earlier flaws?
(vi) Should relief be withheld on futility grounds?
(vii) Question of remittal
199. The parties are in agreement that the CMC is to be interpreted in accordance with the laws of Northern Ireland. That is clear from section B.2.1.1 of the Code. It is also agreed that the decision of Scoffield J. represents the applicable law with respect to the interpretation of the Code. What is not agreed, however, is the question as to the applicable law for the purposes of assessing the applicants' grounds of judicial review. EirGrid and the CRU contend that the grounds of review must be assessed by reference to the laws of the Republic of Ireland, not Northern Ireland. Kilshane agrees with this, however Coolpowra does not. Coolpowra contends that the governing law for assessing the grounds of review is the law of Northern Ireland.
200. In arguing for the laws of Ireland as the governing law, the respondents contend that this is a judicial review brought in this jurisdiction, subject to the laws of this State. The applicants have invoked the judicial review jurisdiction of this Court. Having done so, they cannot contend that the grounds of review asserted can be assessed by reference to the laws of Northern Ireland.
201. In developing that core position, the respondents rely on the following grounds: First, the judicial review jurisdiction of a court forms a part of the court's inherent jurisdiction. The court cannot be expected to exercise that inherent power by reference to the judicial review principles of another jurisdiction. Second, the judicial review jurisdiction is a fundamental aspect of the rule of law in this jurisdiction. The upholding of the rule of law in this jurisdiction by Irish courts must be by reference to principles of Irish judicial review.
202. Third, each of the respondents is a public body established under statute. It could not have been the intention of the Oireachtas that such bodies would be subject to judicial review by reference to the principles of another State. Fourth, it could not be anticipated that a public body established in this jurisdiction could simply contract out of its regulation by the judicial review principles of this jurisdiction.
203. In response, counsel for Coolpowra submits that the correct starting point is the CMC itself, which provides in section B.2.1.1 that any disputes arising under, out of or in relation to the Code shall be interpreted, construed and governed in accordance with the laws of Northern Ireland. Therefore, on the face of it, the parties have contracted on the agreed basis that the legal dispute is and should be governed in accordance with the laws of Northern Ireland. Second, counsel submits that the respondents have not identified any rule of law or caselaw that says that "choice of law" clauses do not apply in judicial review. Third, counsel says that if the respondents are correct, the court is being asked to apply Irish law to some parts of the case, and Northern Ireland law to other parts of the case. This is difficult and presumptively questionable. Ordinarily, a court would want to decide a case by reference to a single jurisdiction, all other things being equal.
204. Fourth, the real reason the respondents want the laws of Northern Ireland to apply to some parts of the case, and the laws of Ireland to other parts of the case, is that there are some parts of the Belfast judgment they favour and wish the court to be bound to, and other parts they do not favour and do now wish to be bound to. Into the latter category comes the finding of the Belfast court that the respondents had fettered their discretion under the Code - a conclusion which they are now inviting this court to depart from. Finally, counsel opposes EirGrid's submission that the jurisdiction clause (which gives jurisdiction to both Ireland and Northern Ireland) is relevant to the issue. Counsel submits that a "choice of law" clause and a jurisdiction clause are different things, perform different functions, and should not be conflated.
205. It seems to me the first question I have to consider under this heading is whether, in fact, it is necessary to determine the governing law issue at all. In other words, whether it is necessary for the court to determine potentially far-reaching issues concerning governing law clauses or private international law. The parties are agreed that if the court is of the view that the relevant grounds of review are the same in both jurisdictions, it will not in fact be necessary to resolve the issue as to the applicable law. As stated above, the main factor propelling this issue is the desire of the respondents for the court to depart from the finding of Scoffield J. that the respondents had failed to exercise their residual discretion under para. E.7.2.1(f) of the Code, thereby amounting to an error of law. Having carefully considered the issue, I find myself in agreement with the analysis of Scoffield J. at paras. 189 to 191 of the Belfast judgment. For reasons that I will outline later, I find that by reference to the principles of judicial review and administrative law in Ireland, the respondents failed to exercise their (residual) discretion under para. E.7.2.1 to consider admitting the applicants' applications, notwithstanding their view that the projects were not feasible within the applicable time frame.
206. I conclude on the evidence before me, as Scoffield J. did on the evidence before him, that the respondents did not appreciate that they were not automatically required to reject the applications once they had concluded they were not feasible within the timeframe under section E.7.2.1.
207. That being my view, I find that, irrespective of whether I apply the administrative law of Ireland or Northern Ireland, the conclusion will be the same: the respondents failed to exercise a discretion which, under the Code, they were obliged to exercise; therefore, the respondents' assessment of the applications was neither complete, nor Code-compliant. Moreover, the respondents erred in law in a fundamental respect by incorrectly believing they were automatically required to reject the applications once they had concluded the projects were not feasible within the timeframe.
208. In these circumstances, it seems to me that I do not have to determine the issue as to the governing law for assessing the grounds of challenge. For the reasons indicated, and without deciding the issue formally, the court can simply proceed on the assumption that the applicable law is the law of Ireland, and I note that in oral submissions none of the parties disagreed with this approach in principle.
209. The next point I will deal with is the failure to exercise discretion point. The parties are agreed that the judgment of Scoffield J. correctly represents the governing law on the interpretation of the Code. That being so, I think it would be appropriate to consider the implications of that agreed state of affairs. Scoffield J. concluded that the Code, correctly interpreted, requires the System Operators, once they have rejected an application under E.7.2.1(f) ("may reject") to go on to consider, notwithstanding its view that delivery of the new capacity is not feasible (either technically or in the applicable timeframe), whether the application should nonetheless be admitted.
210. In the Prime Power judgment, under the heading "Fettering, or failure to exercise, discretion" Scoffield J. stated the following at paras. 189–191:
"[189] Section E.7.2.1 of the Code provides only that the SOs may reject an application for qualification where one of the following conditions are met. There are a number of such conditions where the discretion to reject the application may not be exercised (as Mr Larkin accepted, for instance where the application was submitted late but with good reason and/or where no prejudice arose); and others where the exercise of such discretion appears much less likely. To direct themselves properly, the SOs (and the SEM-C considering whether to reject or approve their decision) should have appreciated that they were not automatically required to reject the PPG bid once they had concluded the non-feasibility condition was met. Despite all of the evidence filed in this case, there is nothing to suggest that such a consideration was undertaken, and I find, on the balance of probabilities, that it was not. The evidence points towards a view being taken that non-feasibility under section E.7.2.1 would result in exclusion just as failure to satisfy a mandatory requirement under section E.7.5.1 would do. Moreover, the results code document appears to treat all of the reject codes in a similar fashion, making no distinction between the different categories of reasons for rejection set out in the Code.
[190] I therefore consider there to be force in this ground. Indeed, on analysis, it is the only ground in the PPG case with any real substance. Neither the SOs nor SEM-C, having reached the view that the PPG project was not feasible within the timeframe, considered expressly whether this should nonetheless not result in its exclusion from the auction in pursuant to section E.7.2.1 of the CMC.
[191] However, I do not consider it appropriate to grant any intrusive relief in relation to this flaw, in the form of an order quashing the SEM-C's decision and remitting the matter back to it for reconsideration, for the following reasons. In summary, I am satisfied to the high degree required on the basis of the evidence and submissions which have been presented in this case, that remitting the matter back to the SEM-C for reconsideration would inevitably result in the same decision, ie rejection of the PPG application."
211. It seems to me that there are two reasons why I should follow Scoffield J.'s analysis on this issue. First, the judgment reflects and states the law of Northern Ireland as to the correct interpretation of the Code; therefore, the judgment is binding on this court as to the applicable law governing the interpretation of the Code. Consequently, I am bound by the legal finding that section E.7.2.1 of the Code, correctly construed, involves a two-step process and a requirement that the System Operator must exercise a residual discretion in the manner indicated. I am not bound by the factual finding that, on the facts of the Prime Power case, no such residual discretion was exercised by the System Operator.
212. The second reason why I should follow the rationale of the Northern Ireland judgment is because I respectfully agree with Scoffield J.'s analysis. Correctly interpreted, section E.7.2.1 of the Code requires a two-step process and the exercise of a residual discretion. Having reviewed the evidence carefully in the two cases before me, I find as a fact that neither EirGrid or the CRU carried out the separate appraisal - or exercised the residual discretion - which they were required to carry out under the Code. Therefore, the applications were not considered in a manner that conformed with the requirements of the Code.
213. The Code lays down the process to be followed, and the correct process, as found by the Northern Ireland judge, was not followed. The Code very clearly draws a distinction between mandatory grounds of rejection in E.7.5.1 and discretionary grounds of rejection in E.7.2.1. In the case of the latter, the System Operator is required to proceed to a second stage of assessment of considering whether, notwithstanding the conclusion that delivery of the new capacity is not feasible, it would nonetheless be appropriate to admit the applications. No submission has been made to the court that the omission to comply with this part of the Code is de minimis or trivial or otherwise something that can be ignored. The CRU did submit that by following the "Decision Tree" the SEM-C essentially plugged the necessary gap and carried out the required assessment. However, for the reasons that I will explain later, that is not correct.
214. Similar to Scoffield J.'s analysis, I find that there is simply no evidence in the two cases before me that either EirGrid or the CRU recognised that the nominated ground of rejection was only a discretionary ground, and did not exhaust the necessary enquiry. Nor is there any evidence that either respondent appreciated that this was only the first part of the assessment; or that they appreciated they had to turn their minds to a second and separate exercise of consideration. Nor is there any evidence - either by way of a sworn averment in an affidavit or in the respective decisions under challenge - that such a consideration was undertaken. It is in my view quite telling that, with respect to a separate issue, deponents for both respondents were able to confirm without difficulty that when considering the applicants' applications they had applied the correct test for "feasibility". No such statement of fact was made by any deponent on the present issue concerning the second step of the two-stage process. In all the circumstances, I am satisfied on the balance of probabilities that no such residual consideration was undertaken.
215. In my view, it would not be appropriate to collapse the distinctions carefully drawn by the framers of the Code between the mandatory and discretionary grounds of rejection. Nor should one simply disregard the decision made by the respondents as to which part of the Code the applications should be considered under.
216. Counsel for Kilshane relied upon the decision of Costello P. in Sherwin v. Minister for the Environment [2004] 4 IR 279. In that case the evidence before the court demonstrated that when responding to the plaintiff's complaint, the Minister had misconstrued his ministerial powers and had "disabled himself from considering whether or not he should exercise his discretionary powers" under the relevant statute. On that basis, Costello P. granted the plaintiff a declaration setting out the appropriate way for the discretionary power to be exercised. It wasn't open to the court to grant certiorari in Sherwin because leave had not been granted to seek that relief.
217. The judgment of Costello P. indicates that where a public decision maker disables itself from considering whether to exercise a discretionary power, the resultant decision may be liable to challenge in judicial review (paras. 26-30).
218. The applicants also rely on the decision of the Northern Ireland Court of Appeal in Re Duff [2024] NICA 42 which concerned a judicial review of a decision to grant planning permission. The High Court concluded that the appellant had failed to satisfy the court that the grant of planning was likely to result in unacceptable damage to the habitat and was not properly addressed by the Council. The trial judge held it was a matter for the Council as to how deeply it enquired into the matter. The High Court decision was overturned on appeal. The Court of Appeal concluded at para. 79 that the matter could not have been considered appropriately as the relevant policy was not drawn to the attention of the counsellors and they were not provided with the basic data needed to conduct the balancing exercise required by it and thus determine the question properly.
219. By analogy, and again borrowing from the analysis of Scoffield J. as to the requirements of the Code, the respondents in the present cases cannot be regarded as having considered the applications properly in circumstances where they appear not have been aware of the relevant discretion, or of the need to undertake a secondary assessment. The matter was not brought to their attention, and they did not weigh the relevant factors in the exercise of that discretionary consideration.
220. The written submissions filed on behalf of EirGrid at para. 70 make the case that the Sherwin case and other authorities mentioned by Hogan et al, Administrative Law in Ireland 5th Ed., (Roundhall, 2019) at para. 17-249 should be distinguished from the present case because a decision to reject an application under E.7.2.1 is a "unitary decision" which should not be unpicked in the manner contended for by the applicants. For the reasons outlined by Scoffield J., that cannot be correct. The Code envisages a two-step analysis being carried out by EirGrid - first whether the new capacity is feasible within the meaning of the CMC and second, if it is not considered feasible, whether it should be admitted for qualification, nonetheless.
221. The respondents rely upon the decision of the Court of Appeal in C.S.B. v. Minister for Social Protection [2016] 1 I.R. 335. In my view, the analysis carried out by Hogan J. in C.S.B. is in fact supportive of the present applicants' case, not against it. On a fair reading of the judgment, including from para. 23 and onwards, the principles underpinning the challenge in that case were endorsed as correct by the Court of Appeal, namely the necessity for the deciding officer to make an independent judgment of his own on the task intrusted to him by the statute, and the requirement not to abdicate his function by following the dictation of a third party. As Hogan J. notes, that, after all, was what the Supreme Court had condemned in McLoughlin v. Minister for Social Welfare [1958] I.R. 1.
222. The C.S.B. case is authority for the general proposition that if a deciding officer regards himself as bound by some other matter, such may amount to an unlawful fettering of discretion. I hold on the facts of the present cases that that is precisely what happened here. The respondents incorrectly believed that once they had assessed the applications as not being feasible within the timeframe, that was the end of the matter and they bound to reject the Candidate Units.
223. In the context of a statutory scheme involving the exercise of discretionary powers, the core requirement is for the decision maker to exercise the discretion that the statute has conferred upon him. Applying that underlying logic to the present cases, I hold that in accordance with E.7.2.1(f) of the Code, EirGrid was intrusted with the discretion of deciding whether to approve the applications for qualification, notwithstanding the initial conclusion that the new capacity was not feasible in the timeframe.
224. On a fair reading of the evidence, EirGrid believed that once it had concluded that the non-feasibility condition was met, it was automatically bound to reject the application. In my view, that is a reasonable inference to draw from the evidence and I note that Scoffield J. concluded on the balance of probabilities at para. 190 that that is what had occurred in the Northern Ireland cases.
225. The logical consequence of the respondents not following the required two-step procedure was that the applicants were denied the possibility that the residual discretion could have been exercised in their favour. This failure of the respondents therefore had "bite" in that it unfairly deprived the applicants of a realistic possibility of being admitted into the auction.
226. At no stage in the decision-making process did EirGrid or the CRU consider whether to exercise the discretion vested in them under E.7.2.1(f). The provisional qualification decisions simply provide for the rejection of the applications on the ground that they were "considered not feasible". The reasoning provided in the decisions on the applications of review, and the CMDRB decisions are similarly limited to the question of feasibility. The FQDs also refer only to the question of feasibility. The CRU's consideration was limited to a review of the FQDs, based upon the limited review standard that I will address later in this judgment. In my view, it is significant that each stage of the decision-making process was infected with the error concerning the failure of the decision maker to exercise the residual discretion. For these reasons, I hold that the impugned decisions were tainted by legal error and invalid.
227. Similar to the last issue, both applicants in the present cases made the argument that the test for considering whether a project was "feasible" in the context of the CMC was misapplied by the respondents in the assessment process. In both cases, the basis upon which the applications were refused was that, per E.7.2.1(f) CMC:
"the delivery of a part or all of any New Capacity proposed in the Application for Qualification is not feasible (either technically or in the applicable time frame)."
228. The concept of "feasible" is not defined in the Code. However, the judgment of Scoffield J. provides a definition at para. 135 which I gratefully adopt. Before examining the definition provided, it is appropriate to refer to the following paragraphs of the Northern Ireland judgment by way of context:
"[133]... the meaning of the word 'feasible' in section E.7.5.1(f) of the Code must take its meaning from its context. The purpose of the qualification stage in capacity auctions is to permit an assessment of undertaking's capacity to deliver electricity capacity for the start of the relevant capacity year. Winning bidders receive capacity agreements, which commit them to be available to supply power when needed. The respondent and notice parties submit that it is critical that successful bidders are able to provide the capacity that they secured through the auction and that the qualification process is designed to filter out unreliable or unfeasible projects to protect the market from capacity shortfalls. That is to ensure that there is security of supply, that consumers are protected and that there is price stability within the market.
[134] At the same time, the assessment of feasibility obviously does not require a completed connection at the time of application; nor absolute certainty that the project will inevitably be delivered on time. One purpose of T-4 capacity auctions is to permit new capacity which is being developed to compete. No project is ever entirely risk free and there will always be some level of uncertainty about how things may work out."
229. Then at para. 135, Scoffield J. sets out the definition for "feasible" as follows:
"[135] How then should this issue be approached as a matter of law? In my view, the word 'feasible' carries a different shade of meaning in each of its uses in section E.7.2.1(f) of the Code. The reference to the delivery of new capacity being technically feasible is much closer to that end of the spectrum where the question is whether it is technically possible. Is there any technical reason why the capacity simply could not be delivered? Provided the delivery of the new capacity is technically possible, the more complex question is whether it is feasible within the applicable time frame. This issue is more predictive in nature and calls for more of an exercise of regulatory judgement. There are more variables to be taken into account and it is not a mere engineering query. In this case, I agree with the position adopted by the SEM-C (and the SOs) that the question is whether in-time delivery is 'reasonably practicable' (which is materially similar in meaning to reasonably possible or reasonably doable). The important point is that this is more than mere possibility. Some assessment of the reasonableness of achieving delivery is required. It is also less than being persuaded that delivery will be achieved on the balance of probabilities. Some level of doubt about delivery is permissible but the appropriate level of doubt in all of the circumstances is itself is (sic) a question of regulatory judgement."
230. The applicants made submissions to the CMDRB as to the interpretation of "feasible". The CMDRB hearing pre-dated the Northern Ireland cases and therefore the guidance of Scoffield J. as to the test to be applied was not available at that point in time. It is noteworthy that both applicants submitted it should bear the meaning "reasonably practicable" or "reasonably achievable".
231. There is a level of dispute as to what definition EirGrid contended for before the CMDRB. EirGrid maintains that it did not apply a test for "feasible" that requires an applicant for qualification to demonstrate that delivery of capacity should be more likely than not (see the affidavit of Ms. Fitzgerald in the Kilshane case at para. 33). However, the CMDRB ruling in Prime Power stated the following at paras. 66-69:
"[66] The SO argue that the word feasible, in its normal usage, requires that something must be reasonably possible, and in this instance the SO argues that the connection to the Castlereagh Sub-Station is not reasonably possible.
[67] The CMDRB have considered the Parties submissions and have also noted the Collins dictionary definition of the word feasible as follows:
'feasible (1) able to be done or put into effect; possible
(2) likely; probable'
The above quotation focuses on the definitions only and omits other characteristics of the word.
[68] The CMDRB consider that the Prime Power arguments focus on the first definition of the word and is not persuaded that is it the appropriate definition in the context of the Code.
[69] The CMDRB agree with the SO and the term feasible in the context of the Code and E.7.5.1(f) in particular means probable or more likely than not, essentially the second definition in the dictionary." (emphasis added)
232. Proceeding on the basis that the judgment of Scoffield J. correctly represents the law, it is immediately evident that the CMDRB in that particular case applied an incorrect test for "feasible". Obviously, if that CMDRB ruling is adjudged to apply to the present cases, then the application of the wrong test calls into question the validity of the assessment carried out by the CMDRB.
233. It need hardly be said that the CMDRB panel were operating in pressurised circumstances, and I am told were dealing with some eight cases over two separate days. The panel heard evidence from both expert and lay witnesses and also had to contend with a range of legal submissions and questions as to the correct interpretation of the CMC on a number of fronts. In circumstances such as these, legal and factual errors can occur. A matter that presented particular difficulty was the fact that the Code itself did not define what was meant by "feasible", even though that was a primary aspect of the core test to be applied. The other difficulty was that, at the time of the CMDRB hearing, there was no judgment in existence to provide guidance on this crucial issue. A further difficulty was that the definition of "feasible" was a point of contention between the parties. These circumstances created fertile ground for inadvertence and error.
234. It is clear from the ruling in the Prime Power case that an error did occur and that the panel misdirected itself on the core test for whether an application was "feasible". The issues I must decide are: the extent of the error; its implications; and whether it applied to the two cases before me.
235. In my view, the error made by the CMDRB, whilst understandable in the circumstances, was material and fundamental. The panel applied the wrong legal test on the fundamental enquiry that they were tasked with carrying out. At a basic level, that enquiry was to determine the core fact as to whether the projects were "feasible" within the timeframe. The panel incorrectly applied too high a threshold. This can only have adversely impacted the Candidate Units affected by the ruling.
236. The CMDRB ruling in Prime Power indicates the panel carried out its assessment by asking whether delivery of the new capacity was probable or more likely than not. This was too exacting a standard. Put simply, the question that should have been asked, was whether the delivery of new capacity in the timeframe was reasonably practicable. The application of the higher test placed an unwarranted burden on the applicants for qualification. Too high a test adversely and unfairly impacts an applicant's chances of being admitted into the auction. This has the potential to cause unfairness or injustice in that a project that might be admitted under the correct test will be wrongly excluded under the incorrect test. In the context of the process under the CMC, that means the applicants could be denied an FQD in their favour. This would have altered the landscape altogether when it came to the final regulatory stage of the process.
237. By way of a simple analogy, if a plaintiff's claim for personal injuries is dismissed because the trial court in error applies the criminal standard instead of the civil, the resultant order would be regarded as void and liable to be set aside on appeal. While this analogy is imperfect, it highlights the basic point that the application of the wrong test or legal standard will usually be fatal to the outcome of the process.
238. A further unsatisfactory aspect is that the CMDRB ruling, on EirGrid's best case, mischaracterised or simply misunderstood the submission that EirGrid had made at the CMDRB hearing on the definition of "feasible". This is clear from para. 69 of the ruling which commences with the words "the CMDRB agree with the SO...".
239. It should be borne in mind that the Dispute Resolution Board phase of the process is a very important part of the overall process. It provides an adjudicative element which is overseen by independent experts. Where a dispute is referred to the CMDRB, its decision shall be in writing, providing reasons. The decision is binding on the disputing parties, subject to the content of sections B.14.8.8. - B.14.10.1 of the Code. These provisions permit a dissatisfied party to give a notice of dispute within two working days in the case of a qualification dispute. Where such a notice is not provided within the relevant time limit, the CMDRB's decision becomes final and binding (B.14.8.10). Importantly, the System Operators must also give effect to a CMDRB decision in relation to a qualification decision when making FQDs.
240. I am not saying that in all cases, an error at the CMDRB stage, without more, necessarily voids the entire process. On the facts of the present cases, it is not necessary for me to consider or determine that discrete issue. However, it is clear from the wording and terms of the CMC that the CMDRB hearing is an important element of the whole process.
241. The next question under this heading is whether the CMDRB ruling in the Prime Power case has any application to the two cases before me. The respondents invite the court to examine the issue by assessing whether there is any error on the face of the record discernible in the specific CMDRB rulings of each applicant. Counsel urges that the individual rulings of each applicant contain unobjectionable references to the feasibility test not being a low standard. Counsel points out that the rulings also correctly say that the appropriate perspective is that of the reasonably prudent operator. Therefore, say the respondents, one should not "carry across" an incorrect reference from another ruling and assume or speculate that it applies to the applicants' cases.
242. In my view, on a fair reading of the evidence and submissions, it is likely that the panel's error in Prime Power affected the other cases before the Panel, including the two cases that are now before me. This conclusion is based upon the following:
· The factual contents of the Kilshane statement of grounds are verified in the first affidavit of Stewart Draffin sworn on the 11th November 2024. At para. E.30 (iv-v) of the statement of grounds the following is stated:
"(iv) Further, on the 1st October 2024, the same day as the hearing of the dispute inter alia the subject of the within proceedings, the same panel of the CMDRB heard another dispute (for clarity, against SONI rather than EirGrid) arising from a rejection of a qualification application involving a related company to the Applicant, Prime Power Generation Limited, in respect of candidate unit bearing the reference 'GU_504270' in Belfast. The determination in that dispute issued also on the 9th October 2024 wherein the CMDRB expressly held that "feasible" required an applicant to demonstrate that delivery of capacity was more likely than not.
(v) Insofar as the CMDRB has accepted and applied a definition of "feasible" or "feasibility" that requires an application for qualification to demonstrate that delivery of capacity should be more likely than not, this interpretation is erroneous and at odds with the plain meaning of this term and contrary to the text of the CMC. It has in effect placed an unwarranted and wrongful burden on applicants for qualification including the Applicant in respect of the Candidate Units".
· It should be noted the statement of grounds was prepared prior to the delivery of the judgment of Scoffield J. in the Northern Ireland cases.
· The CMDRB rulings in the case of the two applicants before the court are silent on the test for feasibility.
· According to the second respondent, the same panel heard some eight cases over two days being the 27th September and the 1st October 2024.
· The CMDRB ruling in the Prime Power matter was the only ruling brought to the court's attention which specifically devoted a section to the meaning and definition of "feasible" under the Code.
· I regard this as a significant indicator that the Panel intended that this ruling would have wider application.
· To their credit, no counsel suggested in submission that it should be assumed that the same panel would apply a different test in different cases.
243. In these circumstances, it is in my view wholly improbable that the same panel would apply a different legal test in the applicants' cases to the legal test applied in the Prime Power case. In the circumstances, I am satisfied to hold on the balance of probabilities that this fundamental error infected the present cases as well.
244. Both applicants, for different reasons, contend that the overall decision-making process was flawed and unfair. I propose not to spend too long on this aspect of the applicants' cases because ultimately, I have formed the view that both cases can be determined by reference to other legal errors in the decision-making process. However, I am persuaded under the fair procedures heading in both cases that certain aspects of the decision-making process were unsatisfactory.
245. In relation to the Kilshane application, I am satisfied that on a fair reading of the affidavits, EirGrid failed to engage as fully as they should have with the submissions that were being made on behalf of Kilshane at the PQD stage and as part of the submissions in writing stage before the CMDRB hearing. I am not necessarily saying that this failure on its own would have been enough to invalidate the entire process, but it did have the effect that Kilshane's representatives were essentially faced with new grounds and materials at the CMDRB hearing which put them at a procedural disadvantage.
246. EirGrid asked in correspondence on 28th August 2024 if Kilshane would be willing or able to deliver a 400 kV connection "contestably" by the 1st October 2028. Kilshane replied on the same date that they were prepared to do so and furnished a draft delivery schedule which on its face confirmed the feasibility of delivery of the electrical connection to meet the T4 timeframe. On the 6th September 2024, Kilshane furnished a detailed works schedule from a firm of engineers called H&MV Engineers, which on its face supported the case they could provide the connection by March 2028, before the delivery date of the 1st October 2028. As far as I can see, there was no reply to this correspondence.
247. Following this, Kilshane invoked the CMDRB process and issued the notice of dispute under the Code. In their written submissions, Kilshane contended that EirGrid previously admitted the application of their sister company, PAM Energy, which they said was an identical project with an identical connection to the substation at Woodland. The Kilshane submissions queried why the H&MV Engineering schedules were not addressed. The EirGrid submission to the CMDRB dated the 20th September 2024 said that the connection was not deliverable within the timeframe, but the submissions did not specifically address why the works schedule provided by H&MV Engineers was unreliable or deficient.
248. I would accept at a general level, in fairness to the System Operator's position, that one should factor in that they are potentially dealing with, and responding to, a range of applications at any one time and that they too only have a finite number of resources to deal with complaints and correspondence, particularly in the busy period leading up to a Capacity Auction. I would also accept the general point that not every piece of correspondence needs to be individually replied to, particularly where the parties will have a very full opportunity at a CMDRB hearing to ventilate issues and, if needs be, make legal and factual submissions to the Panel.
249. Nonetheless, it does strike me as unsatisfactory here that, with respect to the discrete issue as to whether the H&MV Engineering schedules passed muster, and the issue as to which aspects of the applicant's case were said to be deficient, these matters were not properly addressed by EirGrid in correspondence and were effectively held over until the CMDRB hearing. I accept the applicant's submission that the CMDRB hearing was the first time EirGrid engaged with the substance of Kilshane's evidence and delivery schedules. In that regard, the timeline is important: the review decision was on the 6th September, the notice of dispute was raised on the 11th September and the CMDRB hearing took place on the 1st October 2024. EirGrid had been provided with the detailed work schedules by the 6th September. EirGrid appears to have elected not to provide a substantive response on these issues until the hearing itself which was some six weeks after Kilshane had furnished the schedules.
250. As to the CMDRB hearing itself, there is a dispute on affidavit as between the Kilshane deponents and the EirGrid deponents on the question as to whether the applicants were "ambushed" or unfairly surprised by the EirGrid evidence. In circumstances where Mr. Gallery and Mr. Farrell for EirGrid both dispute this characterisation and have not been cross examined, I am not satisfied to make a finding on the "ambush" issue. However, I accept the point made by counsel for Kilshane that the level of engagement by EirGrid with the Kilshane application prior to the hearing was unsatisfactory and from a procedural point of view very much placed that applicant on the backfoot.
251. In assessing the significance and materiality of any deficit in fair procedures in a process such as this, it is necessary to set matters in their appropriate context. This includes building into the assessment the phased nature of the overall decision-making process under the CMC. As Scoffield J. notes at para. 173 of his judgment, the phased nature of the decision making involved an initial provisional decision on the part of the SOs and then a contested dispute before the CMDRB. This meant that, in advance of the final decision by the respondent, there were several opportunities for the issues to be ventilated and for the applicant to become aware of the concerns it had to meet. In the present cases, it is not necessary for me to determine whether the failure of EirGrid to fully engage with the applicant's case prior to the CMDRB hearing was sufficiently serious, in and of itself, to warrant a finding of a breach of fair procedures sufficient to warrant relief by way of judicial review. In my view, the better course is to consider whether, on a cumulative basis, the overall flaws, errors and features of the decision-making process are sufficient to warrant intervention by judicial review. I deal with this omnibus issue in the final part of my judgment.
252. I now turn to the main fair procedures point emphasised by counsel for Coolpowra in oral submissions. This was the argument for which Coolpowra was given permission to amend their pleadings. Counsel brought the court through a supplemental book that was handed in, containing the filed affidavit of Paul Collins sworn on the 2nd December 2024, together with emails of the 30th September, 4th October and 11th October 2024. The respondents were each given liberty to file an amended statement of opposition to address this additional argument and further affidavits from Mr. Downey and Mr. Melvin were provided.
253. In Mr. Collins' email of the 30th September, Coolpowra stated that they wished to provide some additional input following the parties' discussions the previous Friday, to address some of the concerns raised and to address the points made in emails from the Capacity Market Team. Mr. Collins' email included a copy of the Coolpowra "current project master timeline". The email sought to supplement the information provided to the respondents under the following headings: substation lead time and construction time; interaction with gird and new series compensator upgrade; transformer lead time; road transport to plant location of heavy plant items; gas pipeline delivery timeframe and risk; planning (if any) on the AIS side for connecting the new GIS substation; and further commentary of points previously made by the SOs.
254. Counsel for Coolpowra submitted that at the end of the CMDRB ruling, the Board noted the obligation on the SOs under E.9.4.2(d) of the Code in respect of the acceptance of updated information or changes in circumstances prior to the FQD and the reference to formally encouraging the parties to continue to engage on the matter of grid connection, notwithstanding any adverse decision of the CMDRB. Moreover, EirGrid acknowledged in their written submissions that they are entitled to take new information into account after the CMDRB decision when coming to their FQD. Counsel relied on the statement by Scoffield J. in Prime Power at para. 39 that there was an obligation on the SOs to keep the PQDs under review and update the position when submitting their FQDs to the Regulatory Authorities, either by correcting earlier errors or reflecting new information or developments.
255. Coolpowra submitted that it is against that factual backdrop that one should view the post-CMDRB correspondence between Coolpowra and the respondents. I have already referenced the 30th September email which had attached to it a detailed master project schedule or timeline also known as a "Gant Chart". It essentially provides a time period for each step in the process to achieve completion before the 1st October 2028. This includes planning consents to be obtained by the summer of 2025 and various steps in the construction process in the period of 2025 to 2028. There were then follow up emails sent by Mr. Collins on the 4th October and the 11th October as I have mentioned.
256. The main fair procedures point made by Coolpowra was that it appeared from the face of the CRU deliberations that the SEM-C was not provided with these documents and approached their deliberations in a manner which indicated that they had no knowledge and took no account of the updated information set out in the emails. Counsel submitted that in circumstances where the CRU stage is the final evaluative level of decision making, which in the view of Scoffield J. supersedes all earlier decisions, if the final review stage did not have these relevant documents, the decision should be vitiated, as there was an overt failure to take into account relevant considerations. Moreover, the minutes of the SEM-C, and notes from the SEM-OSC appeared to indicate that the SEM-C was under the mistaken impression that no new information had come to light in the intervening period and specifically there was a reference to "no schedule provided on understanding of development 400 kV".
257. As I have said, supplemental affidavits were filed by Mr. Downey for EirGrid and by Mr. Melvin for the CRU responding to Coolpowra's fair procedures argument. Mr. Downey's third affidavit was sworn on the 3rd December and Mr. Melvin's supplemental affidavit was sworn on the 5th December 2024. Both dates fell mid-hearing before me, and so the court was dealing with an evolving factual landscape as the case proceeded. This was somewhat unsatisfactory, but a feature of how fast things were evolving. In any event, Mr. Downey's third affidavit confirms at para. 5 that the Capacity Market Team considered the contents of Paul Collins' email of the 30th September 2024 and the attachments thereto. He also confirms that the Capacity Market Team were advised of the consideration of the updated information in reaching the FQD in respect of the relevant Candidate Units, which FQD was submitted to the RAs for approval on the 15th October 2024. Mr. Downey also confirms that the emails sent by Paul Collins dated the 4th October 2024 were considered by the Capacity Market Team, and the Capacity Market Board were advised of the consideration of the updated information in reaching the FQD which was submitted to the RAs for approval on the 15th October. He avers that for the avoidance of doubt, the email of the 11th October 2024 was not sent to the System Operators.
258. In fairness to EirGrid's position, Mr. Downey's affidavit sets out a number of additional steps taken by the Capacity Market Team, including the commissioning of third-party assessments regarding the updated master project timeline attached to the Coolpowra emails. Mark Curran of the Capacity Market Team sought an assessment from Connection Projects regarding the master project timeline and the resultant assessment was considered by the Capacity Market Team. The assessment commented that a number of matters had not been accounted for by Coolpowra and a number of items in the programme had been significantly underestimated in terms of timing.
259. Separately, Mr. Curran sought the view of Gas Networks Ireland regarding the updated master project timeline. GNI provided comments by way of email of the 3rd October wherein GNI reiterated their earlier position that a pipeline project of this nature would take five plus years to deliver. In a later email, GNI confirmed that their initial five-to-six-year timeline for the project remained unchanged, notwithstanding a meeting that had taken place between Coolpowra and GNI on the 1st October. In conclusion, Mr. Downey's affidavit stated that insofar as the Coolpowra amended statement of grounds asserted that EirGrid reached its decision on the basis that the applicants had failed to provide a schedule based on the construction of a 400 kV substation, that was incorrect. The SOs reached their decisions on the basis that, notwithstanding the updated schedule furnished in the emails of the 30th September and the 4th October 2024, the development of a 400 kV transmission system was considered not to be feasible in the timeframe.
260. I now turn to the replying affidavit of John Melvin for the CRU on this issue. As mentioned, Mr. Melvin is the Director of Security of Supply and Wholesale at the CRU, and together with Colin Brumfield of the NIAUR sits on the two-person SEM-OSC. The SEM-OSC has delegated authority from the SEM-C and has a role in reviewing matters to be decided by the SEM-C and making recommendations to it. As part of the SEM-OSC, in advance of Capacity Auctions and during the process relating to applications for qualification, Mr. Melvin generally avoids engagement with developers in respect of matters specifically relevant to those auctions. He is not a member of the SEM-C itself. With respect to the current auction, SEM-OSC, at the SEM-C's request, prepared the CRM Team Memo dated the 4th November 2024 which was considered by SEM-C at its meeting on the 4th November 2024 when it decided to approve the FQDs, rejecting the Candidate Units.
261. Dealing firstly with the 30th September email, Mr. Melvin avers that in the email of the 30th September, Mr. Collins forwarded to him the 30th September EirGrid email. The 30th September email was expressly stated to have been sent to Mr. Melvin "for information" and did not indicate it was sent to him for any other purpose or that it was intended it should be forwarded further. The email was addressed to Mr. Melvin alone and was not sent jointly to Mr. Broomfield in their joint capacities as members of the SEM-OSC. Mr. Melvin said he was conscious of having received the 30th September email, but did not pay any particular regard to it and does not believe that he opened the attachments to it. He confirms that he did not forward the 30th September email to anyone else prior to receipt of Mr. Collins' supplemental affidavit. Candidly, and to his credit, Mr. Melvin confirms at para. 12 that neither of the 30th September emails were before the SEM-C for the purposes of the 4th November meeting. Mr. Melvin says, however, that there was no requirement that the emails should have been before the meeting. He says that not every document relating to every engagement which a developer will have with EirGrid will be before the SEM-C.
262. Turning to the 4th October EirGrid email, this was not sent to Mr. Melvin and he was not aware of it until he read Mr. Collins' supplemental affidavit. This email was not before the SEM-C for the purposes of the 4th November meeting. As to the 11th October email, Mr. Melvin says that he was not aware of having received this when he prepared the CRM team memo dated the 4th November 2024, and the email was not before the SEM-C for the purposes of the 4th November meeting. Again, he says there was no requirement that the email should have been before the meeting.
263. Mr. Melvin's affidavit then addresses legal and factual arguments made in correspondence from the Solicitors for Coolpowra. Separately, at para. 21 he states that having now reviewed the 30th September emails, there is nothing arising within them to suggest that the FQD was plainly wrong, or that would have altered the advice which the SEM-OSC provided to the SEM-C in that regard.
264. From para. 22 onwards Mr. Melvin makes the following points to directly address Coolpowra's complaint of unfair procedures: First, he states his understanding that the 30th September EirGrid email was received by EirGrid and reviewed by it in advance of the FQD being made, such that the FQD reflected EirGrid's assessment having considered the 30th September email. Second, he says his handwritten notes and handwritten notes of Mr. Sebastian, were not before the SEM-C for the purposes of the SEM-C meeting. Third, all of the emails were sent before the FQD had been submitted to the SEM-C, so it is not the case that this material was timed to coincide with the SEM-C's consideration of the FQD. Fourth, none of the emails were enclosed with the notice of dissatisfaction. Fifth, he states his belief that neither the September emails or the 4th or 11th October emails would have been material to, or had any effect on, either the advice which the SEM-OSC gave the SEM-C or the decision made by the SEM-C to approve the FQDs.
265. Responding to the respondents' affidavits, counsel for Coolpowra contends the important takeaway is that, in light of Mr. Melvin's commendably frank affidavit, it is clear that the director of the CRU received the 30th September email but didn't open the attachments; he also received the 11th October email but didn't place either email before the CRU and they weren't considered in the context of the CRU's decision on the review. Counsel submitted that in circumstances where the 30th September email went to EirGrid as well, EirGrid were obliged under the Code in the context of their FQD to update the CRU in respect of any new information.
266. In the circumstances, counsel submitted that there were two ways in which the email should have been provided to the CRU: through Mr. Melvin who had been sent the email in his official capacity, or through EirGrid in the context of their obligation to update the CRU in respect of any new information. One way or the other, the important information contained within the email did not find its way to the SEM-C and, as everyone now agrees, was not considered by them. Counsel emphasised that this was important in two separate respects: firstly, the point made by Scoffield J. at para. 39 of his judgment that there is an obligation on the SOs to update the position when submitting their FQDs to the regulator, and secondly the important point that a key part of both EirGrid and the CRU's submission in the whole case was that earlier flaws in the process could be cured by the CRU addressing them in the final layer of the process. Counsel urged that the acknowledgement that the emails were ultimately not considered by the CRU must be viewed against the backdrop of the respondent's whole case that nothing really matters before the CRU stage, because it supersedes everything. It is in that context that the fair procedures point takes on a greater significance.
267. In my view, one should bear in mind there can be a temptation for an applicant in a case such as this to focus unduly and disproportionately on the fact that particular documents or submissions may not have been considered by a decision maker. There can be an understandable tendency or temptation to assume that the overlooked documents were crucial and made the difference between inclusion and rejection. I think I should bear that factor in mind in a general sense, but also factor into my assessment the potential importance of the documents in question. Mr. Melvin has stated on affidavit that the documents in question would not have made any difference. Speaking generally, a deponent commenting on how matters might have panned out, had circumstances been different, presents difficulty. I have no doubt that the statement represents Mr. Melvin's genuinely held position on the matter, and I also accept that the documents didn't affect the EirGrid FQD. However, in a case such as this, there is a limit to the weight a court can give ex post facto observations.
268. As against that, I do have considerable sympathy for Mr. Melvin's position and the unfair manner in which he essentially became the receptacle for the applicant's final round of submissions. In the circumstances, I think it would be unfair to criticize him personally for what occurred. Mr. Melvin says in his affidavit that simply sending or forwarding emails to him personally is not an orderly way of seeking to have materials put before the SEM-C. Moreover, he says that the applicants could have had no reasonable confidence that the emails would be considered by the SEM-C in the circumstances. The 30th September email was expressly stated to have been sent to him "for information" and didn't indicate that it was sent to him for any other purpose or that it was intended that he would forward it further.
269. Leaving aside any issue of blame or personal culpability, however, I still must factor-in what effect the absence of the documents from the SEM-C consideration process may have had. I should also bear in mind the point concerning the onus on the SO to update the regulator. Were this the only issue in the case, the fact that the emails were ultimately not considered by the CRU at the review stage would in my view not be sufficient, in and of itself, to warrant a finding that the process was fatally flawed on fair procedure grounds. I say that firstly, because no criticism can be made personally of Mr. Melvin and secondly, Coolpowra must be taken to have, at the very least, contributed to creating a situation in which the materials ultimately did not end up before the SEM-C. I agree with Mr. Melvin's point that this was not an orderly way of ensuring materials were placed before the SEM-C.
270. Having made these points, however, I do think that in the context of the overall cumulative assessment that I have to carry out, it was unsatisfactory that relevant and potentially important documents were not considered by the ultimate decision-maker. In my view, it is reasonable to include in the list of factors to be considered the agreed fact that the emails were not considered by the SEM-C in the final and binding stage of the process. At a minimum, this factor has a bearing on the respondents' futility argument which I will address presently.
271. Before carrying out the cumulative assessment that I have outlined, it is necessary to consider a key plank of the respondents' defence to the proceedings, namely the contention that the final stage of the process has "curative effect", such that any earlier flaws in the process can be "cured" and are therefore not material to the final outcome.
272. In broad outline, the respondents say that, because the decision-making process is multi-layered and involves decisions being made at discreet stages, it should not be thought that, merely because an error occurs at an earlier stage, that this should have the disproportionate effect of invalidating the entire process. The respondents emphasise that the key decision in the process is the decision of the CRU at the final stage, that being whether to approve the FQD sent to it by the SOs. In addition, the respondents submit that the nature of the review carried out by the CRU, and the careful consideration of the issues by reference to the "decision tree" methodology, together mean that any earlier flaws arising in the process were subsequently rendered irrelevant. The CRU submits inter alia that this should address any concerns the court might have about the CMDRB applying the wrong test for feasibility.
273. In relation to the applicants' assertions as to the alleged failure to exercise discretion/ the fettering of discretion under E.7.2.1(f), the respondents contend that the methodology operated by the SEM-C, using the "decision tree", was sufficient to encompass any necessity to undertake a residual exercise of discretion. The respondents say that the "decision tree" process adopted by the SEM-C indicates an awareness of the discretion which it had, and the role which it played, in the approval decision. It is contended that a review of the SEM-C minutes indicates that the SEM-C specifically considered the question, even if the FQDs did not meet the plainly wrong standard, whether it would "nonetheless" be appropriate to reject the FQDs.
274. Counsel for the CRU developed this point in oral submissions before the court. Counsel submitted that the "decision tree" and in particular question 3 thereof allows for a very open assessment on the part of the SEM-C, taking account of its various objectives and duties. It was urged that this assessment is sufficiently broad to capture any aspect of what might be required by way of the exercise of residual discretion under the Code. Counsel submitted that even after the "plainly wrong" question is asked, there is the further point that it may be open to the SEM-C "taking account of its various objectives and duties" to reconsider the FQD. Counsel says the fact that the decision maker didn't refer to this discretion expressly or by name is not sufficient under Irish law to make out a ground of fettering of discretion.
275. While these points were made with considerable ingenuity, I am not satisfied that the important errors and flaws identified in the process to date were cured as a result of the CRU review. I reach that conclusion for several reasons. Firstly, in my view there is a tension and inconsistency between aspects of the respondents' core arguments. In support of the submission that the SEM-C were correctly advised to apply the "plainly wrong" standard, counsel emphasised that the final layer of the process does not and should not involve a de novo or full appeal and furthermore, that the hearing before the CMDRB is an oral hearing, involving experts giving evidence, discussion around factual and scientific issues, consideration of extensive documents and materials and the interrogation of written submissions. Therefore, says the CRU, there is no need for a duplication of all of this before the SEM-C.
276. One difficulty that arises in the respondents' argument is that that analysis is largely premised upon the earlier phases of the process proceeding on a valid basis and, for instance, the independent fact-finding stage before the CMDRB proceeding validly and resulting in a legally sustainable outcome. However, for the reasons I have earlier outlined, that is unfortunately not what occurred in the present cases. The CMDRB essentially misdirected itself in law on the core enquiry it was required to carry out. Moreover, at various stages of the process, decision-makers failed to exercise their residual discretion under the Code. In saying that, I should not be taken as finding that in every case where a stage of the process is affected by legal error or unfairness, or where the independent Panel misdirects itself in law, that that fact, without more, necessarily voids the entire decision-making process. Such a far-reaching conclusion would not be inevitable. Such a conclusion risks ignoring the phased nature of the decision-making, and the opportunities provided at various stages of the process for an applicant to make its case and rebut suggested shortcomings. For that reason, as I have sought to emphasise previously, the approach that I am taking here involves a cumulative assessment of all features and frailties in the process, and whether on an overall holistic assessment, the final outcome of this particular decision-making process can be regarded as legally safe or sustainable.
277. As part of its case that the "plainly wrong" test was the correct standard to apply, the CRU relied upon an affidavit of laws of Alistair Fletcher BL, a barrister based in the Bar Library in Belfast. At para. 54 and onwards of his opinion, Mr. Fletcher addresses the question as to whether it was correct for the SEM-C to proceed on the basis that it should approve the FQD unless it is plainly wrong. Mr. Fletcher states that he would not frame the question that way. Rather, his position was that such an approach could not be described as irrational, in the context of the wording of the SEM-C, especially if suitable deference is shown, for the SEM-C to determine that it should approve the FQD unless it is plainly wrong. He then goes on to offer his opinion, with reasons, as to why an approach to approving a FQD unless it is plainly wrong is rational.
278. Mr. Fletcher notes that the CMC itself does not prescribe the form of review to take place when a SEM-C is undertaking the process of approving or rejecting the FQD. He then makes an interesting observation at para. 56 and says that the fact that the default position where the SEM-C does not make a decision approving or rejecting the FQD is for the FQD to be approved, indicates that interrogation of the correctness of the decision is not the aim of the CMC. He says it would be incongruous to allow for default approval (which could in theory mean that an incorrect FQD is approved) where there has been an elapse of the prescribed time, yet require an approval or rejection decision made within the prescribed time to be a merits-based enquiry.
279. Counsel for the CRU in oral submissions drew an analogy between the "plainly wrong" standard of review operated by the CRU, and the review of factual findings that an appellate court carries out when assessing factual findings made by a trial judge at first instance. Counsel referred to paras. 58-60 of Mr. Fletcher's opinion where he says that when an appellate court is asked to review a factual finding of a lower court, it intervenes only if the judge was "plainly wrong" (McGraddie v. McGraddie [2013] 1 WLR 2477). In that case Lord Reed speaking for the U.K. Supreme Court said the following:
"The rationale for deference to the original finder of fact is not limited to the superiority of the trial judge's position to make determinations of credibility. The trial judge's major role is the determination of fact, and with experience in fulfilling that role comes expertise. Duplication of the trial judge's efforts in the court of appeals would very likely contribute only negligibly to the accuracy of fact determination at a huge cost in diversion of judicial resources. In addition, the parties to a case on appeal have already been forced to concentrate their energies and resources on persuading the trial judge that their account of the facts is the correct one: requiring them to persuade three more judges at the appellate level is requiring too much. As the court has stated in a different context, the trial on the merits should be 'the main event' ... rather than a 'tryout on the road.' ... For these reasons, review of factual findings under the clearly erroneous standard - with its deference to the trier of fact - is the rule, not the exception."
280. I think I should pause there and note that in the present case, neither applicant has made any challenge to the decision of the SEM-C to confine its review to the "plainly wrong" standard. That, therefore, is not an issue in the two cases before me. In any event, counsel for the second respondent advanced cogent reasons as to why that form of limited review was followed. However, in my view, the issue as to whether the "plainly wrong" standard was the correct one to apply should not be conflated with the separate question of whether the adoption of that standard impacts the capacity of the reviewing body to correct errors. The difficulty for the second respondents' case is that in its efforts to explain and justify that form of limited review, the CRU has highlighted certain limitations which this form of review places upon the review body's capability to correct errors at first instance.
281. Speaking purely at a level of principle and generality, the more that a review consists of a full merits-based appeal, the greater the capacity for "curative effect" to correct errors at first instance. The converse is also true: the narrower and more limited the appeal, and the less it involves an assessment on the merits, the more reduced the capacity to correct errors. In making that general observation, however, I want to make it clear that no party is asserting that an appeal court in the Irish legal system does not have full capability to correct errors made by a lower court. However, in my view, for the appeal court to cure the error, it must at a basic level be aware of the error, turn its mind to the effect of the error and be in a position to address it. I am not satisfied from the evidence before me that that was the case with the CRU review in the present cases.
282. The real question is not a theoretical question as to whether the regulator's review could have curative effect. Rather, the real question is whether, on the facts, the particular review carried out by the CRU in this specific instance operated to correct the procedural errors and flaws that had occurred in the process up until the FQD stage. By reason of the following cumulative factors, I find that in both cases before the court, the decision-making process was sufficiently flawed to warrant setting aside the final decision, and was not saved by the review that was actually carried out by the CRU/SEM-C in either instance:
(a) The core "fact-finding" assessment carried out by the CMDRB at the independent decision-making element of the process was erroneous and flawed by reason of the Panel applying the wrong test for "feasible". This had the consequence that, borrowing the words of the UK Supreme Court in McGraddie, the hearing on the merits which was supposed to be the "the main event rather than a try out on the road", was in fact procedurally flawed.
(b) Decision makers at the PQD, CMDRB, FQD and SEM-C review stages of the process did not carry out the two-step/residual discretion exercise under section E.7.2.1(f) of the Code, which Scoffield J. found to be a necessary requirement under the laws of Northern Ireland, the governing law for the purposes of interpreting the Code. The fact that this error infected the process at these different stages is in my view significant.
(c) There was no assertion, still less any evidence, that any of the decision makers at these various stages actually carried out the required second layer of discretionary assessment. In fact, the evidence supports a finding that the decision-makers considered themselves bound by the initial assessment.
(d) The review carried out by the CRU was, self-evidently, not a merits-based review. Rather, it was a limited form of review which involved applying the "plainly wrong" standard. The SEM-C's position is that the decision that comes up to it for review should be approved, unless the Committee concludes the decision was plainly wrong. The SEM-C was not tasked with being the primary fact finder. Rather, it was tasked with considering the factual findings on qualification that the CMDRB and System Operator had reached at earlier stages of the process.
(e) The CRU acknowledges that the review carried out in these cases did not involve an interrogation of the correctness of the decision contained within the FQD.
(f) There is no evidence that the first respondent, at the time of finalising the FQD for forwarding to the second respondent, realised or appreciated the earlier errors or reacted to the fact that the CMDRB had misdirected itself in law in a fundamental respect, or that there had been a failure at earlier stages to carry out the two-step/residual discretion exercise.
(g) Similarly, there is no evidence that the second respondent at the review stage realised or appreciated or reacted to the errors which had affected earlier stages of the process.
(h) Not only was there no express mention of the residual discretion or the erroneous test for feasibility, but there is simply no evidence at all that these points were realised or addressed by decision-makers at any stage.
(i) The questions the SEM-C asked itself as part of the "decision tree" methodology were not the same as the core enquiry mandated under section E.7.2.1(f) of the Code of considering whether the delivery of a part or all of any new capacity is or is not feasible (either technically or in the applicable timeframe). The SEM-C evaluation cannot be regarded as being identical to the merits-based evaluation carried out by the first respondent.
(j) In the Kilshane case, prior to the CMDRB hearing, the first respondent failed to engage with the applicant's submission to the extent required by the Code. This caused a degree of prejudice to the applicant as it placed Kilshane on the back foot at the CMRDB hearing.
(k) In the Coolpowra case, as a matter of fact and without getting into issues of culpability, the documents considered by the SEM-C at the review stage did not include either of the 30th September 2024 emails. Therefore, the final decision of the second respondent was arrived at without these materials being reviewed or taken into account. This was unsatisfactory.
(l) In weighing up these cumulative factors, I ascribe very little weight to the frailties at paras. (j) and (k) above. Nonetheless, these points are relevant as factors to be considered in the overall mix, and also as relevant to the issue of futility.
283. I now turn to consider a submission made by the respondents that, even if the applicants have succeeded in identifying errors and flaws in the decision-making process, certiorari of the impugned decisions should not be granted on the grounds that, were the cases to be remitted, the same decision to reject the applications would inevitably be made. In other words, that certiorari should be withheld on futility grounds.
284. The parties drew my attention to a decision of the Court of Appeal (Donnelly J.) which deals with the doctrine of futility. In H.A. v. The Minister for Justice [2022] IECA 166, Donnelly J. noted that there may indeed be occasions where, despite an applicant successfully persuading a court that some error in the decision-making process vitiated the decision, certiorari ought not to be granted because no benefit will or could obtain to the applicant. It is noteworthy that the Court of Appeal made clear that the futility doctrine should be exercised with caution and that the onus of establishing that the granting of relief would be futile clearly rests on the party making that assertion.
285. At para. 42 of the judgment Donnelly J. identified the principles to be applied:
"It is worthwhile making reference to some of the principles set out by McKechnie J. in Harrisrange Ltd v. Duncan [2002] IEHC 14 concerning the issue of when a defendant ought to be given leave to defend in a summary judgment procedure. These can be adapted to the situation where a court is being asked to refuse to make an order by way of judicial review, despite having found that the order actually made was vitiated by legal error. From such a perusal and adaptation, the following principles may be helpful in determining these issues:
(i) The discretion to refuse relief by way of judicial review should be exercised with discernible caution;
(ii) Having already determined that a decision is vitiated by error of law, relief ought not to be refused on the ground of futility unless it is very clear that the granting of relief is futile in the sense of being incapable of benefitting the applicant for judicial review;
(iii) The onus of establishing that it is very clear that the granting of relief is futile remains on the party who makes that assertion;
(iv) In deciding upon this issue, the Court should look at the entirety of the situation and consider the particular facts of each individual case, there being several ways in which this may best be done;
(v) The Court must be mindful that it is decision-making bodies who have been charged by statute with the particular decision-making function;
(vi) The issue is whether the applicant for relief by way of judicial review has a case to make on remittal of the issue to the statutory decision-maker is to be judged by whether it is arguable that they may achieve a benefit in that procedure;
(vii) If it appears arguable that the moving party on the judicial review application may achieve a benefit for any reconsideration of their case by a decision, the low threshold for the grant of relief will have been reached;
(viii) Where truly there is no basis upon which the decision-maker could reach a different conclusion than the decision already reached but impugned in the proceedings, then it may be appropriate to exercise discretion to refuse relief;
(ix) Where, however, there are issues of fact upon which adjudication is required and which in themselves are material to success or failure, then their resolution must be left to the statutory decision-maker;
(x) Where there are issues of law which may be resolved by the Court, it may be appropriate to exercise the discretion to refuse to grant judicial review, but only if it is clear that fuller argument and greater thought is evidently not required for a better determination of such issues;
(xi) The overriding determinative factor, bearing in mind the constitutional basis of the parties' right to fair procedures and the legal basis of the claim for relief being made by an applicant, is the achievement of a just result whether that is to grant or refuse certiorari."
286. Applying the factors identified by the Court of Appeal, I am not at all satisfied that the respondents have established that there is truly no basis upon which the decision-maker could reach a different conclusion than the impugned decision already reached. For the reasons of principle identified by the Court of Appeal, the focus of the judicial review court should usually be on the validity and procedural fairness of the decision-making process, rather than the substantive merits of the underlying application. Ordinarily, the judicial review judge should be slow to get involved in judging the latter.
287. Even though in the Kilshane case, for instance, there was a suggestion that the application could have been refused on one of the mandatory grounds under s. E.7.5.1 of the Code, that to my mind cannot be determinative, particularly in light of the different errors which the court has identified as occurring at different stages of the process. The court must be mindful that it is the respondents and the CMDRB who have been charged under the Code with a particular decision-making function, and it is those bodies that possess the expertise on the substantive issues that the court lacks.
288. It is abundantly clear from the affidavit evidence before the court that each of the present applicants is a substantial undertaking that has put together a serious bid that warrants proper consideration. I am not satisfied that the respondents have out-ruled the possibility of the applicants achieving any benefit by reconsideration of their cases.
289. I note that in one of the Northern Ireland cases, Scoffield J. declined to grant certiorari on futility grounds. However, that conclusion was reached on the particular facts of the Prime Power application (see para. 192 of the judgment). The facts underpinning the cases before me are different. The Prime Power case appears to have been unusually weak on its facts. The SO's evidence was that there were complications in respect of both options put forward by Prime Power (para. 140 of the Belfast judgment). Prime Power's position was that the loss by EP Kilroot (the other applicant before Scoffield. J) of the offer from SONI to connect at the Kilroot sub-station would provide it with the opportunity to connect its project at that point, instead of at the Castlereagh sub-station. The expert evaluation was that, irrespective of whether EP Kilroot would or would not retain its connection offer in respect of the Kilroot sub-station, it would not be feasible for Prime Power to deliver its project either by connecting it at the Castlereagh or Kilroot sub-station. The SEM-C members did not see anything which encouraged them to take a more favourable position than the SOs. In fact, members thought that adopting the approach to feasibility for which Prime Power contended, could pose both security of supply and competition risks (see Scoffield J. paras. 68-70).
290. No case has been made that this court is bound by Scoffield. J.'s decision on the futility question in the Prime Power case. Indeed, the respondents' express position was that the court was not so bound, because the grounds of challenge fall to be assessed as a matter of Irish administrative law, not the laws of Northern Ireland. In any event, as I have said, Scoffield J.'s decision on the futility question was based on the particular facts of the Prime Power application, which do not arise in the present cases before me.
291. I am not satisfied that the respondents have discharged the heavy burden of demonstrating that remitting the applications for fresh consideration would inevitably lead to the same result. Applying the overriding test identified by the Court of Appeal in H.A. v. Minister for Justice, I find that the just result in this case would be to grant certiorari of the final decision in each case and to remit the proceedings to the SEM-C for further consideration.
292. When I gave my ex tempore decision in these proceedings on the 10th December 2024, I indicated that, having considered the evidence and submissions made, the interests of justice would best be served by the final decision of the second respondent in each case being quashed, and the proceedings being remitted to the SEM-C of the second respondent for a fresh decision to be made in each case, in accordance with law. I also gave a direction as to the scope of the assessment to be carried out by the SEM-C when considering the remitted applications. I stated that in selecting the final stage as the appropriate stage to remit the proceedings to, I was taking into account my view that legal and procedural errors had occurred at different stages of the process, and furthermore, that there were public interest considerations that weighed in favour of limiting remittal to the second respondent only.
293. I stated that since the court's determination of the remittal question involved inter alia the balancing of competing interests, including the parties respective rights to fair procedures, I directed that, for the purposes of the remitted consideration, the second respondent's assessment should be broader than that carried out previously, and that the Committee should consider each case on its merits and determine whether each application should be admitted into the then forthcoming Capacity Auction.
294. In coming to that view, I took into account that the respondents had put before the court a considerable bank of evidence which indicated that if remittal were directed all the way back to the earliest stages of the process, even before the CMDRB hearing, then that would have major implications for the auction timeline and would inevitably result in the Capacity Auction not taking place before Christmas 2024. Having regard to the substantial bank of evidence produced as to the balance of convenience criteria for the interlocutory injunction application, and bearing in mind also the potential implications for the energy supply to the State, I decided that I should err on the side of remitting the proceedings to the SEM-C, particularly if it was open to the Committee to provide a broader based review than the "plainly wrong" standard review that was applied in the process thus far. On that basis I determined that remitting the proceedings to the SEM-C stage would strike the appropriate balance. The Code does not oblige the SEM-C to limit its review to the "plainly wrong" standard, and no objection in principle was made to the court giving a direction that the SEM-C should consider each remitted case on its merits in accordance with law.
295. In conclusion, the decision reached by the court was to quash the final decision of the second respondent in each case and remit both applications to the CRU for further consideration. I did not consider it appropriate to accede to Kilshane's application to direct that Kilshane should be admitted into the Capacity Auction. To grant such mandamus relief would involve the court trespassing into an area that was reserved for expert decision-makers, whose expertise and technical knowledge the court does not possess. The question whether a project should qualify for a Capacity Auction involves the exercise of expert judgment in a highly technical and complex area with quite a wide range of variables. The court's role in a judicial review is largely supervisory, assessing the lawfulness and fairness of the decision-making process. Generally speaking, it is not the court's role to become embroiled in the merits of a litigant's substantive application.
296. I will conclude by making one or two observations. Firstly, as I stated when giving my decision in December 2024, the parties respective legal teams are to be commended for the speed and skill with which both cases were prepared and presented. The issues in these cases were complex and challenging and I felt it was only right to record my appreciation of the very considerable work undertaken by solicitors and counsel on all sides, in what was a highly pressurised timescale.
297. Secondly, I stated when giving my decision that it would be appropriate for the respondents to give further consideration to the whole issue of Capacity Auction timetabling, so that engagements with applicants are not unduly rushed or pressurised and so that, if a legal challenge is brought, there is sufficient time not only for proceedings to be heard but for the court to have sufficient time to consider the issues and if needs be, to deliver a reserved judgment, without compromising auction dates that have long since been arranged. Because of the compressed timetable, the parties and indeed the court were placed under additional and unnecessary time pressure which did not assist the smooth running of the proceedings. The compressed timeframe also meant that the applicants were provided with certain important documents and minutes at a point in time after leave had been granted. This led in part to the necessity for the applicants to apply mid-hearing to amend their pleadings. To their credit, the respondents and their legal teams responded to this difficulty in a sensible and fair-minded way by not opposing the applications to amend the pleadings.
298. Finally, prior to the court delivering its decision in December, the second respondent decided for the second time to postpone the Capacity Auction, thereby obviating the need for the court to consider whether it was appropriate to grant interlocutory relief postponing the auction into 2025. Based on the new timeline provided to the court, it was possible for the applications to be remitted and considered afresh by the SEM-C in December 2024, without unduly endangering the amended auction schedule.
Signed: Micheál O'Higgins
Appearances:
For Kilshane: Anthony McBride SC and Cillian Bracken BL instructed by Dermot McNamara & Co. Solicitors.
For Coolpowra: Brian Conroy SC and John O'Regan BL instructed by Eversheds Sutherland LLP.
For EirGrid: Niall Handy SC and Niall Buckley SC and Sonja O'Connor BL instructed by Matheson LLP.
For the CRU: Catherine Donnelly SC and Donogh Hardiman BL instructed by McCann FitzGerald LLP.
For the Notice Party: Nathy Dunleavy SC and Matthew Judge BL instructed by the Chief State Solicitor's Office.