The Government in Ireland is implementing electricity market interventions as required from 1 December 2022 under Regulation (EU) 2022/1854 (the "Regulation"), which we considered here.
Cap on Market Revenues
As indicated here, the Government is capping market revenues of non-gas electricity generators with a capacity of 1 MW or more from December 2022 to June 2023 as follows:
- €120/MWh for wind and solar,
- at least ?180/MWh for oil-fired and coal-fired generation,
- €180/MWh on other non-gas generation.
The Regulation provides Ireland with a discretion to implement the cap through the Single Electricity Market or otherwise outside of the market. It is not yet clear how the cap will be implemented, though the Government's press release does specify that it will be administered by the CRU.
This is a temporary measure but it is worth noting that the Commission's 2023 Work Programme indicates that it intends to propose in early 2023 a comprehensive reform of the EU's electricity market. Further information is available in the work programme and press release.
Temporary Solidarity Contribution
The Temporary Solidarity Contribution is to be paid from surplus profits generated by businesses with activities in the crude petroleum, natural gas, coal and refinery sectors. The Government has announced that taxable profits which are more than 20% above the baseline will be subject to the contribution at a rate of 75%, and that this will lead to effective rates of 0% for gains of up to 20%, 50% for gains of 60%, and 60% for gains of 100%.
There is complexity in implementing these mechanisms and further detail is awaited.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.