ECLI:EU:C:2026:316•Opinion of Advocate General Kokott delivered on 16 April 2026.###
Opinion of Advocate General Kokott delivered on 16 April 2026.###
ECLI:EU:C:2026:316Eu CjeuApr 16, 2026
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OPINION OF ADVOCATE GENERAL
KOKOTT
delivered on 16 April 2026 (1)
Case C‑36/25
Energia Group Holdings (ROI) DAC,
Energia Customer Solutions Limited,
Wind Generation Ireland Limited,
Holyford Windfarm Limited,
Cornavarrow Windfarm Limited,
Eshmore Limited,
GR Wind Farms 1 Limited,
CNOC Windfarms Limited,
TRA Investments Limited,
Ballybane Windfarms Limited,
Beam Wind Limited,
Meenaward Wind Farm Limited,
Cordal Windfarms Limited,
Sigatoka Limited,
Glanaruddery Windfarms Limited,
Glencarbry Windfarm Limited,
Gortahile Windfarm Limited,
Killala Community Windfarm Designated Activity Company,
Kill Hills Windfarm Limited,
Knocknacummer Wind Farm Limited,
Knocknalour Wind Farm Limited,
Seahound Wind Developments Limited,
Lisdowney Wind Farm Limited,
Monaincha Wind Farm Limited,
Ronaver Energy Limited,
Tullynamoyle Wind Farm II Limited
v
The Commission for Regulation of Utilities,
Interested parties:
Eirgrid PLC,
The Attorney General
(Request for a preliminary ruling from the Supreme Court (Ireland))
( Reference for a preliminary ruling – Internal market for electricity – Common rules – Regulation (EU) 2019/943 – Article 13(7) – Generators of electricity from renewable energy sources – Priority dispatch – Non-market-based downward redispatching – Right to financial compensation – Calculation methods – Reasonable compensation – Direct effect – Conditions )
Table of contents
I. Introduction
II. Legal context
A. Regulation 2019/943 on the internal market for electricity
B. Directive 2019/944 on the internal market for electricity
III. The facts of the main proceedings, the questions referred and the proceedings before the Court of Justice
IV. Legal assessment
A. Scope of Article 13(7) of Regulation 2019/943 (Question 1)
1. Preliminary remarks
2. Criteria and functioning of the compensation mechanism under Article 13(7) of Regulation 2019/943 (Question 1(a))
(a) Literal interpretation
(b) Systematic, teleological and historic interpretation
(c) Interim conclusion on Question 1(a)
3. Scope of the criterion of ‘unjustifiably low or an unjustifiably high compensation’ (Question 1(b))
4. Lawfulness of national implementing measures making entitlement to financial compensation conditional upon enjoying the benefit of priority dispatch (Question 1(c))
B. Direct effect of Article 13(7) of Regulation 2019/943 (Question 2)
1. Criteria for direct effect as distinct from direct applicability
2. Fulfilment of the criteria for direct effect
3. Interim conclusion
C. Other remedies (Question 3)
D. Other questions (Question 4)
1. Deferring fulfilment of the entitlement to financial compensation (Question 4(a) and (b))
2. Restricting or extending the personal scope of the entitlement to financial compensation (Question 4(c))
(a) Part one: Exclusion of small generators?
(b) Part two: Can intermediaries have an entitlement to compensation?
3. Regarding payments above the market price based on CPPAs as ‘financial support’ (Question 4(d))
V. Conclusion
I. Introduction
1. The internal market for electricity, which has been liberalised and harmonised, inter alia, by Regulation (EU) 2019/943 (2) and Directive (EU) 2019/944, (3) is principally based on market rules. (4) However, since it also promotes the sustainable and decarbonised generation of electricity, (5) preference is given, in principle, to electricity supplied by generators of renewable energy (‘priority dispatch’). The complex functioning of the electricity markets necessitates, for the purposes of demand response and system security, occasional but non-market-based interventions by the system operator, such as the downward redispatching at issue in the present case. A downward redispatch means that the affected generator of renewable energy – for example, of wind power – is temporarily prohibited from feeding into the grid the volumes of electricity generated or generatable by it, and is therefore granted, in that respect, a right to receive financial compensation from the system operator. However, a corresponding right arises also if the system operator makes an order for upward redispatching, that is to say, where it instructs the generator concerned to produce and feed into the grid more electricity than it would otherwise have done under market conditions.
2. The main proceedings giving rise to this reference for a preliminary ruling involve a dispute concerning the application of the national and EU rules governing the calculation of the financial compensation payable for non-market-based downward redispatching. The Court of Justice therefore has the opportunity to rule, for the first time, on the complex criteria laid down in EU law for determining the right to financial compensation provided for in cases such as the present one.
II. Legal context
3. The EU legal context consists, in essence, of Regulation 2019/943 and Directive 2019/944.
A. Regulation 2019/943 on the internal market for electricity
4. According to point 26 of Article 2 of Regulation 2019/943, redispatching means ‘a measure, including curtailment, that is activated by one or more transmission system operators or distribution system operators by altering the generation, load pattern, or both, in order to change physical flows in the electricity system and relieve a physical congestion or otherwise ensure system security’. (6)
5. Article 12 of Regulation 2019/943 governs the dispatching of generation and demand response. Paragraph 1 requires ‘the dispatching of power-generating facilities and demand response [to] be non-discriminatory, transparent and, unless otherwise provided under paragraphs 2 to 6, market based’. Paragraphs 2 to 6 govern ‘priority dispatching’ for facilities for renewable energy generation. (7) According to paragraph 2, Member States are required to ensure, without prejudice to Articles 107, 108 and 109 TFEU, ‘that when dispatching …, system operators shall give priority to generating installations using renewable energy sources to the extent permitted by the secure operation of the national electricity system, based on transparent and non-discriminatory criteria and where such power-generating facilities [inter alia] … have an installed electricity capacity of less than 400 kW’. Paragraph 4 provides that Member States may provide for priority dispatch in the case of power-generating facilities using high-efficiency cogeneration with the same electricity capacity. Paragraph 6 provides that power-generating facilities that use renewable energy sources or high-efficiency cogeneration and were commissioned before 4 July 2019 and, when commissioned, were subject to priority dispatch under Article 15(5) of Directive 2012/27/EU (8) or Article 16(2) of Directive 2009/28/EC (9) are to continue to benefit from priority dispatch.
6. Article 13 of Regulation 2019/943, entitled ‘Redispatching’, is worded, inter alia, as follows:
‘1. The redispatching of generation and redispatching of demand response shall be based on objective, transparent and non-discriminatory criteria. It shall be open to all generation technologies, all energy storage and all demand response, including those located in other Member States unless technically not feasible.
2. The resources that are redispatched shall be selected from among generating facilities, energy storage or demand response using market-based mechanisms and shall be financially compensated. …
3. Non-market-based redispatching of generation, energy storage and demand response may only be used where:
(a) no market-based alternative is available;
(b) all available market-based resources have been used;
(c) the number of available power generating, energy storage or demand response facilities is too low to ensure effective competition in the area where suitable facilities for the provision of the service are located; or
(d) the current grid situation leads to congestion in such a regular and predictable way that market-based redispatching would lead to regular strategic bidding which would increase the level of internal congestion …
…
5. Subject to requirements relating to the maintenance of the reliability and safety of the grid, based on transparent and non-discriminatory criteria established by the regulatory authorities, transmission system operators and distribution system operators shall:
(a) guarantee the capability of transmission networks and distribution networks to transmit electricity produced from renewable energy sources or high-efficiency cogeneration with minimum possible redispatching, …
(b) take appropriate grid-related and market-related operational measures in order to minimise the downward redispatching of electricity produced from renewable energy sources or from high-efficiency cogeneration;
…
6. Where non-market-based downward redispatching is used, the following principles shall apply:
(a) power-generating facilities using renewable energy sources shall only be subject to downward redispatching if no other alternative exists or if other solutions would result in significantly disproportionate costs or severe risks to network security;
(b) electricity generated in a high-efficiency cogeneration process shall only be subject to downward redispatching if, other than downward redispatching of power-generating facilities using renewable energy sources, no other alternative exists or if other solutions would result in disproportionate costs or severe risks to network security;
(c) self-generated electricity from generating installations using renewable energy sources or high-efficiency cogeneration which is not fed into the transmission or distribution network shall not be subject to downward redispatching unless no other solution would resolve network security issues;
(d) downward redispatching under points (a), (b) and (c) shall be duly and transparently justified. …
7. Where non-market based redispatching is used, it shall be subject to financial compensation by the system operator requesting the redispatching to the operator of the redispatched generation, energy storage or demand response facility except in the case of producers that have accepted a connection agreement under which there is no guarantee of firm delivery of energy. Such financial compensation shall be at least equal to the higher of the following elements or a combination of both if applying only the higher would lead to an unjustifiably low or an unjustifiably high compensation:
(a) additional operating cost caused by the redispatching, such as additional fuel costs in the case of upward redispatching, or backup heat provision in the case of downward redispatching of power-generating facilities using high-efficiency cogeneration;
(b) net revenues from the sale of electricity on the day-ahead market that the power-generating, energy storage or demand response facility would have generated without the redispatching request; where financial support is granted to power-generating, energy storage or demand response facilities based on the electricity volume generated or consumed, financial support that would have been received without the redispatching request shall be deemed to be part of the net revenues.’
7. Article 19a of Regulation 2019/943 governs the promotion of ‘Power purchase agreements’.
8. Article 19d of the regulation governs ‘Direct price support schemes in the form of two-way contracts for difference for investment’ in new facilities for renewable energy generation.
B. Directive 2019/944 on the internal market for electricity
9. Article 59 of Directive 2019/944 governs the duties and powers of the regulatory authorities. Paragraph 1(a) provides that the regulatory authority is to have the duty of ‘fixing or approving, in accordance with transparent criteria, transmission or distribution tariffs or their methodologies, or both’.
III. The facts of the main proceedings, the questions referred and the proceedings before the Court of Justice
10. The request for a preliminary ruling from the Supreme Court (Ireland) relates to two appeals on points of fact and law, in which the interpretation of Article 13(7) of Regulation 2019/943 is in dispute. The parties to those proceedings are, as appellant, the Commission for Regulation of Utilities (Ireland) (CRU), the National Regulatory Authority (NRA) responsible for the electricity market in Ireland, the Attorney General (Ireland), the Transmission System Operator (TSO or ‘the system operator’) in Ireland, Eirgrid PLC, and the respondents and applicants at first instance, who are either generators of renewable energy or their intermediaries.
11. On the island of Ireland, there is a Single Electricity Market (SEM) with separate regulation for the jurisdictions of Ireland and Northern Ireland. The regulatory authority responsible for Northern Ireland is the Northern Ireland Authority for Utility Regulation (NIAUR). To facilitate exercise of the common supervisory functions of the CRU and the NIAUR, the Single Electricity Market Committee (SEMC) was established. The TSO in Northern Ireland (System Operator for Northern Ireland Ltd; SONI), and Eirgrid jointly act as the single energy market operator (SEMO).
12. On 22 March 2022, the SEMC adopted a ‘Decision Paper on Dispatch, Redispatch and Compensation Pursuant to Regulation (EU) 2019/943’ (SEM‑22‑009) on the basis of Article 59 of Directive 2019/944 (‘the decision at issue’). In order to implement the requirements set out, inter alia, in Article 13(7) of Regulation 2019/943 and ensure financial compensation for facilities for renewable energy generation in cases where non-market-based redispatching has occurred, the decision at issue provides for application of the following principles: (10)
‘(a) For renewable units commissioned after 4 July 2019, compensation based on the higher of a unit’s ex ante revenues or foregone support should not be considered “unjustifiably high”, unless there is good cause … to find otherwise;
Any foregone support for such units would generally be expected to derive from competitive, auction-based support schemes under which bids would reflect market revenues, including those introduced through Article 13(7).
(b) For renewable units commissioned prior to 4 July 2019, compensation based on the higher of a unit’s ex ante revenues or foregone support should be considered “unjustifiably high” unless there is good cause … to find otherwise.
Any foregone support for such units would generally be expected to derive from schemes under which support was based on the levelised cost of electricity from different renewable sources.’
13. In the actions challenging the decision at issue, the respondents asserted that compensation for non-market-based redispatching must fully compensate the affected generators for any loss arising from the redispatching, such that they would be ‘indifferent’ or ‘neutral’ to the prospect of being redispatched. The respondents maintain that the decision restricts their entitlement to financial compensation, particularly for downward redispatching, in a manner inconsistent with Article 13(7) of Regulation 2019/943 and unlawfully postpones the granting of compensation payments.
14. The High Court (Ireland) consequently set aside the decision at issue.
15. The referring court adjudicating on the appeal – the Supreme Court – has doubts concerning the interpretation of Article 13(7) of Regulation 2019/943 and seeks to ascertain whether that provision is directly applicable. It points out that the decision at issue excludes financial compensation, inter alia, for de minimis generators that do not participate in the day-ahead market – that is to say in electricity trading for the following day. It also emphasises the great commercial significance of the financial support for generators of renewable energy, including by means of promoting power purchase agreements (Corporate Power Purchase Agreements; ‘CPPAs’). (11) Under CPPAs, the purchasers undertake to purchase electricity at an agreed price (‘the strike price’), which may be higher or lower than the market price from time to time. Such CPPAs generally take the form of contracts for difference, whereby, if the market price is higher than the strike price, the generator pays the difference to the purchaser and, where the market reference price is lower, the purchaser makes good the difference to the generator. The CRU maintains that, where a generator is entitled to be paid a strike price that is more than the market price, that is a form of financial support which is outside the scope of Article 13(7)(b) of Regulation 2019/943, and need not therefore be the subject of compensation in the event of downward redispatching.
16. The Supreme Court stayed the proceedings and requested the Court of Justice to answer the following questions in accordance with the third paragraph of Article 267 TFEU:
‘(1) (a) Does Article 13(7) of Regulation [2019/943] require that generators with firm access who are dispatched downwards by the system operator be fully compensated for the revenue lost as a result of being redispatched (including any foregone financial support) such that the generator is put in the same financial position as it would have been in had it not been redispatched and is accordingly indifferent to the prospect of being redispatched?
(b) In this context, what is meant by the words “unjustifiably low or unjustifiably high compensation” and by reference to what criteria or benchmark is the assessment of whether compensation is “unjustifiably low or unjustifiably high” to be made?
(c) In particular, does Article 13(7) permit the adoption of a measure of application that distinguishes between electricity generators in relation to their entitlement to compensation depending on whether the generators enjoy the benefit of priority dispatch or not?
(2) (a) Is Article 13(7) of Regulation [2019/943] sufficiently clear, precise and unconditional whether in its terms or with the assistance of a reference under Article 267 [TFEU], such that it is directly effective in national law?
(b) To what extent does Article 13(7) require or permit the adoption of national measures of implementation or application?
(3) (a) If Article 13(7) of Regulation [2019/943] is not directly effective, may it nonetheless be invoked before a national court for the purposes of challenging the legality of a provision of national law (including any purported national implementing measure) allegedly inconsistent with it and as a basis for annulling or setting aside such a provision or measure if found to be inconsistent with it or is the exercise of such a jurisdiction by a national court excluded by [the judgment in] Popławski II[ (12)]?
(b) If Article 13(7) is not directly effective, and if it cannot be invoked before a national court for the purpose set out in [Question 3](a) above, what remedies are available to an undertaking who claims that a purported national implementing measure wrongly restricts its entitlement to compensation under Article 13(7), whether pursuant to Article 19(1) TEU, Article 47 of the Charter or otherwise?
(4) As regards the correct meaning and effect of Article 13(7):
(a) Having regard to the provisions of Article 71 of Regulation [2019/943], was it open to the [NRA] to adopt a measure of application deferring payment of compensation under Article 13(7) to 2024?
(b) Was it open to the NRA to adopt a measure of application that deferred the decision as to whether (and if so to what extent) compensation should be payable under Article 13(7) in respect of foregone financial support?
(c) Does Article 13(7) permit the adoption of a measure of application that (i) restricts compensation to generators participating in the ex ante (day ahead) market, thus excluding de minimis generators from being compensated in the event of being redispatched and/or (ii) provides for payment of compensation to suppliers of electricity, who may be intermediaries rather than the generators who have been redispatched?
(d) In the event that a renewable generator that is a party to a [CPPA] is redispatched downwards, must the compensation payable under Article 13(7) include compensation for the loss of any payments that would have been payable under the CPPA (in the event that the generator had not been redispatched) due to the contract strike price exceeding the relevant market price or do such payments constitute a form of financial support falling outside the scope of Article 13(7)(b)?’
17. By order of 9 April 2025, the President of the Court rejected the referring court’s request that the reference for a preliminary ruling be dealt with under the accelerated procedure pursuant to Article 105 of the Rules of Procedure of the Court of Justice.
18. In the procedure before the Court, the respondents, the CRU, Ireland, the Hellenic Republic and the European Commission submitted written observations. They also participated in the hearing of 15 January 2026 and answered the Court’s written and oral questions.
IV. Legal assessment
19. The reference for a preliminary ruling primarily concerns the interpretation of the (disputed) criteria, as set out in Article 13(7) of Regulation 2019/943, for determining the financial compensation payable to renewable generators affected by a non-market-based downward redispatch. Linked to that issue is the question as to whether that provision is directly applicable and is therefore to be applied by a national court in proceedings such as the case at hand, whereby the national court must, if necessary, disapply the conflicting national law.
20. I will first examine the scope of that provision and the criteria set out therein (Question 1) (see Section A). Based on the ensuing conclusions, it will be possible to determine whether the conditions for direct effect are met (Question 2) (see Section B), or what remedies are available to affected generators (Question 3) (see Section C). I will then address the remaining questions (Question 4) (see Section D).
A. Scope of Article 13(7) of Regulation 2019/943 (Question 1)
1. Preliminary remarks
21. The primary matter in dispute between the parties to the proceedings is whether Article 13(7) of Regulation 2019/943 confers upon renewable generators, in the event of a non-market-based – in the present case, downward – redispatch, an entitlement to receive ‘full’ financial compensation from the system operator. This means compensation that places the generator concerned in the same economic position as it would have been in had the redispatch not occurred and it had been able to supply, and be remunerated for, the electricity it had generated under the prevailing market conditions and rules (and taking into account the priority dispatch applicable to that generator).
22. In that regard, the parties agree that the mechanism for compensating a non-market-based downward redispatch as provided for under Article 13(7) or Regulation 2019/943 is based on a hypothetical or counterfactual assessment. That is apparent, in particular, from Article 13(7)(b), which provides that the compensation is to be determined, inter alia, by reference to the ‘net revenues from the sale of electricity on the day-ahead market’ that the generator concerned ‘would have generated without the redispatching request’. This means that, where such redispatching takes place, the economic situation resulting from that redispatching is to be compared with the situation that would have arisen if the volume of electricity affected by the redispatching could have been fed into the grid and sold on the day-ahead market.
23. The criteria to be applied in the course of that comparison must therefore be examined in closer detail. In that respect, the referring court seeks to clarify, in particular, the scope of the words ‘unjustifiably low or an unjustifiably high compensation’ contained in the second sentence of Article 13(7) of Regulation 2019/943 (Question 1(b)).
24. To obtain a better understanding of the scope of those criteria, it is necessary to consider the compensation mechanism provided for in Article 13(7) of Regulation 2019/943 in its entirety.
25. In that respect, it should be kept in mind that the entitlement of the generator concerned to receive financial compensation arises not only in the event of downward redispatching (in other words, a reduction in the volume of electricity fed into the grid), but also in the case – not at issue in the present proceedings – of upward redispatching (in other words, an increase in the volume of electricity fed into the grid); in the latter case, a counterfactual comparison is not generally required. (13) It is also undisputed, first, that entitlement to compensation is conditional upon a connection agreement containing a delivery guarantee (14) – in the main case, this condition appears to be met for each party – and, second, that the ‘financial support’ granted to the generator concerned on the basis of the electricity volume generated or consumed is to be deemed part of its net revenues. (15)
2. Criteria and functioning of the compensation mechanism under Article 13(7) of Regulation 2019/943 (Question 1(a))
26. Question 1(a) appears to me to be ambiguously worded in so far as it concerns ‘full’ compensation for the foregone revenues of a renewable energy generator. That is because the comparison based on the (variable) criteria and calculation methods set out in Article 13(7) of Regulation 2019/943 does not, in my opinion, guarantee any financial compensation that fully cancels out the redispatching in economic terms. That compensation is in fact intended only to approximate as closely as possible to the hypothetical economic situation that would have arisen without the redispatching request. That is already apparent from a literal interpretation of the provision.
(a) Literal interpretation
27. Article 13(7) of Regulation 2019/943 provides that, where non-market based redispatching is used, it is to be subject to a minimum financial compensation (‘at least equal to’). For the purpose of calculating that compensation, two different (higher-ranking or lower-ranking) calculation methods are provided for in that provision, which apply, in principle, to both an upward and a downward redispatch. (16)
28. It is a common feature of both calculation methods that they are orientated towards two variable parameters, namely, on the one hand, the ‘additional operating cost’ caused by the redispatching (point (a)) and, on the other hand, the ‘net revenues from the sale of electricity on the day-ahead market’, that the generator ‘would have generated without the redispatching request’ (point (b)). The concept of foregone ‘net revenues’ is not defined more precisely in Regulation 2019/943. Initially, therefore, it is necessary to proceed on the basis of the general understanding of the concept, according to which ‘net’ as distinguished from ‘gross revenues’ means revenues adjusted for expenses and taxes. (17)
29. According to the – higher-ranking – first calculation method, the compensation is to be calculated based on the higher of the two elements specified in points (a) and (b) (‘at least equal to the higher of the following elements’).
30. Only if that method leads to an ‘an unjustifiably low or an unjustifiably high compensation’ are the elements specified respectively in points (a) and (b) to be combined using the second calculation method (‘combination of both’). (18) The term ‘combination’ is also not given a precise definition in Regulation 2019/943. It could be understood in the sense of the average or arithmetic mean of both elements obtained using the first calculation method (under point (a) and point (b)). However, that is not necessarily the correct understanding. The term could also cover an addition of the two elements. In any event, the (additional) operating costs and the foregone (hypothetical) net revenues are to be related to each other in some way. That indicates that the system operator enjoys broad discretion for the purpose of determining how the two elements are to be combined.
31. In my view, the variable criteria ‘additional operating cost’ (in point (a)) and ‘net revenues’ (in point (b)), which form the basis of both calculation methods, already militate against that proposition of ‘full’ compensation, as set out in the arguments advanced by the respondents.
32. More specifically, it is conceivable that a generator affected by downward redispatching could incur additional operating costs that match or even surpass the level of the foregone revenues. Under the first calculation method set out in Article 13(7) of Regulation 2019/943, that generator may only ever claim the higher of the two elements by way of (minimum) compensation – subject to that compensation being unjustifiably low or high, and thus in need of correction. Thus, even if, under those conditions, the generator is entitled to claim compensation in the amount of the foregone net revenues, inclusive of the foregone financial support, that will not mean – contrary to the arguments asserted by the respondents – that the generator is placed in the same financial position that it would have been in without the redispatch, or that the generator would be completely indifferent or neutral to the prospect of being redispatched. That is because any additional operating costs caused by the redispatching will not necessarily be adequately covered by the compensation. Such an outcome could lead to an ‘unjustifiably low … compensation’ and application of the second calculation method.
33. Article 13(7)(a) of Regulation 2019/943 expressly addresses that situation with the example of downward redispatching of power-generating facilities using high-efficiency cogeneration. The affected power plant operators may thus incur additional operating costs in connection with backup heat provision. More specifically, irrespective of the order to reduce the amount of electricity generated and fed into the grid, and the resulting associated losses, that operator would need to fulfil its contractual obligations to provide heat. That heat therefore needs to be generated, but the operating costs caused by that heat generation cannot be covered by a sale of the automatically co-generated electricity.
34. It therefore follows that the (arithmetic) first calculation method cannot, as the respondents advocate, lead to ‘full’ financial compensation in every case.
35. That applies a fortiori in the context of the second calculation method. That method provides for the possibility of an upward or downward correction to the amount of compensation in cases where the system operator assesses that amount to be ‘unjustifiably’ low or high. In that regard, the ‘combination’ of both of the elements provided for under point (a) and point (b) is therefore only the starting point for determining the financial compensation. In connection with the wording ‘unjustifiably low or an unjustifiably high compensation’, which is the prerequisite for the application of the second calculation method, it is also apparent that that wording requires a value-based assessment. More specifically, it should – to use a reverse formulation – enable a ‘justified’ level of compensation to be arrived at, that is to say reasonable compensation. (19)
36. The second calculation method is thus an auxiliary construction for determining the (hypothetical) economic situation that would have arisen but for the ordered redispatching. That will also be clear in the event of upward redispatching, which is not at issue in the case at hand. Although the higher volume of electricity fed into the grid as a result of the upward redispatching will, in principle, lead to additional revenues for the electricity generator concerned, Article 13(7)(a) of Regulation 2019/943 provides an acknowledgement that, even in such scenario, additional operating costs, such as fuel costs, could be incurred that may surpass or unreasonably reduce those revenues. (20)
37. A system operator using the second calculation method to determine the reasonable level of financial compensation payable in the specific case therefore enjoys, for the purposes of the required counterfactual comparison, discretion in two respects, as expressed in the undefined legal terms ‘combination of both elements’ and ‘unjustifiably’. It relates, first, to the assessment of whether the first calculation method leads to an ‘unjustifiably low or an unjustifiably high compensation’, that is to say an amount of compensation that is unreasonably low or high, and, second, to the associated evaluation of the reasonableness of the compensation resulting from a ‘combination of both’. That evaluation has an open outcome, depending on the circumstances of the particular case, or, more specifically, it need not place the generator in precisely the same economic situation as would have resulted without the redispatching.
38. It is logically consistent that non-market-based redispatching being ‘subject to financial compensation’, as provided for in Article 13(7) of Regulation 2019/943, is not defined more precisely using the term ‘full compensation’. (21) Equally, in that respect, there is no mention of a guaranteed minimum revenue, but only of a minimum compensation (see point 27 of this Opinion). (22) Contrary to the respondents’ assertions, the EU legislature in fact refrained intentionally from making such a specification, as shown by the historical analysis (see point 43 of this Opinion), and provided only that non-market-based redispatching is ‘subject to financial compensation’ (‘einen finanziellen Ausgleich’ in the German-language version). (23) The level of that compensation is thus limited to the amount resulting from the comparative hypotheses and calculation methods provided for in that provision. It need not necessarily correspond to the amount that would have been realised from the feed in and sale of the volume of electricity that was reduced by the downward redispatching, but should only approximate as closely as possible to the latter amount – as even the respondents conceded during the hearing, referring, inter alia, to the principle of proportionality.
39. The conclusion drawn from that literal interpretation is confirmed by systematic and teleological considerations, as well as by the origin of Regulation 2019/943.
(b) Systematic, teleological and historic interpretation
40. From a systematic perspective, Regulation 2019/943 does not specify a minimum threshold below which revenues, or compensation for foregone revenues, may not fall under any circumstances. In that respect, the possibility provided for in Article 10(2) of applying ‘harmonised limits on maximum and minimum clearing prices for day-ahead and intraday timeframes’, (24) is an exception and is not transferable to the redispatching governed by Article 13.
41. Also militating against a finding of a minimum threshold for revenue is the fact that the EU legislature requires, in the case of the first method for calculating the financial compensation under Article 13(7) of Regulation 2019/943, that the additional operating costs referred to in point (a), and the foregone net revenues referred to in point (b), be calculated separately, in order to determine the compensation based on the higher of the two elements (see points 28 and 32 of this Opinion). Otherwise, the possible correction to the result of the first calculation method to be carried out, in cases where the result leads to an unjustifiably low or high compensation, by means of the second correction method, would make no sense. The latter method simply presupposes that the compensation may need to be corrected upwards or even downwards. It therefore follows that the wording ‘at least equal to the higher of the following elements or a combination of both’ does not refer to such a minimum threshold. It actually refers only to the fact that one of the two elements specified in points (a) and (b) may be higher and is thus, in principle, to be applied as a suitable benchmark for determining the financial compensation.
42. Furthermore, contrary to the arguments put forward by the respondents, I am unable to find any further indication in the objectives of Regulation 2019/943 capable of justifying the entitlement to ‘full’ financial compensation that they advocate. The objective of realising demand response that is, in principle, market-based, while at the same time promoting electricity generation from renewable energy sources, including through the granting of priority dispatch for renewable energy, is also advanced by the fact that any non-market-based redispatching is subject to financial compensation that approximates as closely as possible to market-based remuneration. In my opinion, that is precisely what the compensation mechanism provided for under Article 13(7) of Regulation 2019/943 is ultimately intended to ensure.
43. The legislative background of Regulation 2019/943 points to the same conclusion. In its proposal, the Commission limited the right to financial compensation to cases of non-market-based downward redispatching and to 90% of the (hypothetical) net revenues from the sale of electricity on the day-ahead market. (25) It is true that the Council subsequently removed the reference to the 90% limit, such that only the foregone (hypothetical) net revenues were mentioned. However, the compromise that was ultimately agreed upon between the Council and the European Parliament dropped net revenues as the sole criterion for calculating the financial compensation, introducing instead the additional criteria for both calculation methods (‘additional operating cost’ under point (a) – including in the case of upward redispatching – and foregone ‘net revenues’ under point (b), as well as the ‘combination of them’ in the case of an ‘unjustifiably low or unjustifiably high compensation’). (26) The EU legislature therefore proceeded on the basis that, in the context of the hypothetical comparative analysis required in the event of non-market-based downward redispatching, it would not be possible, in arithmetical terms, to achieve a fully ‘neutral’ economic equalisation for renewable energy generators, but only to arrive at an approximate value aimed at mitigating their losses as far as possible.
(c) Interim conclusion on Question 1(a)
44. Question 1(a) should therefore be answered to the effect that Article 13(7) of Regulation 2019/943 confers upon generators with firm network access and a delivery guarantee, and who are subjected to non-market-based downward redispatching, an entitlement to financial compensation that corresponds as closely as possible to the hypothetical loss of the revenue (including foregone financial support) that would have been generated had the volume of electricity in question been supplied under market conditions, but does not necessarily fully neutralise such lost revenue in economic terms.
3. Scope of the criterion of ‘unjustifiably low or an unjustifiably high compensation’ (Question 1(b))
45. The answer to Question 1(a) covers the essential criteria for interpreting the words ‘unjustifiably low or an unjustifiably high compensation’ contained in the second sentence of Article 13(7) of Regulation 2019/943, which is what the referring court is specifically seeking to clarify (Question 1(b)).
46. Those words refer – in the case of downward redispatching (27) – to the result of the first calculation method and establish the prerequisite for application of the second calculation method. The system operator must first examine, on the basis of all available data, (28) whether the first calculation method leads to an ‘unjustifiably low or an unjustifiably high compensation’, that is to whether the level of compensation is (un)reasonable. In that respect, it enjoys discretion (see point 37 of this Opinion).
47. If the system operator considers the compensation to be unreasonable, it must then determine, within its discretion, a reasonable financial compensation comprising a ‘combination of both elements’ set out in points (a) and (b).
48. To that end, the system operator may, as a first step, take the average of the two determined elements, and add them together or otherwise correlate the additional operating costs with the foregone (hypothetical) net revenues. In a second step, the system operator must determine the reasonable amount of compensation based on the circumstances of the particular case, including the price trends on the day-ahead market during the course of the redispatching (see point 30 of this Opinion).
49. In line with the considerations set out in point 27 et seq. of this Opinion, Article 13(7) of Regulation 2019/943 does not, in principle, allow for the use of rigid percentages or presumptions that go beyond, or deviate from, the criteria laid down therein, which would unduly restrict the recognised discretion that the system operator enjoys in that respect (for further details, see points 64 and 65 of this Opinion). That also takes account of the fact that, in view of the special position and task assigned to the system operator under that regulation, that is to say, to ensure the proper functioning of the electricity market under the supervision of the national regulatory authority, (29) it is the system operator who is best placed to determine a reasonable amount of compensation. The national court must also take that fact into account when reviewing the reasonableness of that compensation. This confirms, once again, that the amount of compensation determined by the system operator will not necessarily correspond precisely to the economic situation that the generator would have been in without the order for redispatching, but merely approximates to that situation as closely as possible (see point 38 of this Opinion).
50. Question 1(b) should therefore be answered to the effect that the wording ‘unjustifiably low or an unjustifiably high compensation’ contained in Article 13(7) of Regulation 2019/943 is intended to grant a reasonable financial compensation to generators affected by non-market-based downward redispatching. In that respect, the system operator enjoys discretion.
4. Lawfulness of national implementing measures making entitlement to financial compensation conditional upon enjoying the benefit of priority dispatch (Question 1(c))
51. Question 1(c) seeks to ascertain whether Article 13(7) of Regulation 2019/943 permits the adoption of national implementing measures making entitlement to financial compensation conditional upon whether or not the generators affected by non-market-based downward redispatching otherwise enjoy the benefit of priority dispatch, as referred to in Article 12(2) and (4) of that regulation (see point 5 of this Opinion). (30)
52. As the Commission and the respondents correctly argue, the provisions of Article 13(7) of Regulation 2019/943 make no such distinction. Rather, Article 13(1) lays down the principle, which also applies within the scope of paragraph 7 thereof, that redispatching must be based on objective, transparent and non-discriminatory criteria and must be open to all generation technologies (including all types of energy storage and demand response) within the limits of what is technically feasible. That applies both to market-based redispatching, which is to be financially compensated in accordance with Article 13(2), and to non-market-based redispatching, which establishes an entitlement to financial compensation in accordance with Article 13(7).
53. Corresponding national implementing measures, if necessary at all, must therefore comply with those principles. In order to ensure that the entitlement to financial compensation is granted on a non-discriminatory basis in cases where an order is made for non-market-based (downward) redispatching, such measures must not therefore differentiate between whether or not the generator concerned enjoys the benefit of priority dispatch. The only prerequisite for that entitlement is that the generator has a supply or purchase guarantee under a connection agreement.
54. Question 1(c) should therefore be answered to the effect that the entitlement to financial compensation under Article 13(7) of Regulation 2019/943 is not conditional upon whether or not a generator affected by non-market-based downward redispatching enjoys the benefit of priority dispatch and, furthermore, the fulfilment of that entitlement may not be made subject to such differentiation under national implementing measures.
B. Direct effect of Article 13(7) of Regulation 2019/943 (Question 2)
55. By Question 2, the referring court seeks to ascertain whether the provisions of Article 13(7) of Regulation 2019/943 are sufficiently clear, precise and unconditional, and thus directly applicable (Question 2(a)), and, furthermore, whether and to what extent they require or permit the adoption of national transposition and implementing measures (Question 2(b)). I consider it appropriate to answer those questions together.
1. Criteria for direct effect as distinct from direct applicability
56. The first point of dispute between the parties concerns whether, as regards the provisions of Article 13(7) of Regulation 2019/943, it is even necessary to examine the conditions for direct effect, as recognised by case-law, in view of the fact that the second paragraph of Article 288 TFEU provides that regulations are directly applicable in the Member States. The focus here is on the judgment in Popławski, (31) to which the referring court also refers in Question 3(a), as well as on the question of whether the provisions of regulations take precedence over conflicting national law solely by virtue of their direct applicability. However, the latter question has been answered by the Court in a clear and generally applicable manner, to the effect that the principle of the primacy of EU law requires Member State authorities to disapply conflicting national law only in so far as the relevant provision of EU law – that is to say, including a provision contained in a regulation – satisfies the conditions for direct effect. (32) In other words, provisions of regulations that are directly applicable cannot automatically be applied directly by the authorities of the Member States. On the contrary, in view of their normative structure, their conditional nature or a discretion granted to those authorities, the adoption of national or EU (implementing) measures may be necessary in order to give them specific expression, (33) that is to say, they do not have immediate direct effect. (34)
57. For the purposes of the present case, it is therefore necessary to examine whether Article 13(7) of Regulation 2019/943 has direct effect.
58. According to settled case-law, in order to be regarded as having direct effect, a provision of EU law – of primary or secondary law – must appear, so far as its subject matter is concerned, to be unconditional and sufficiently precise. A provision is unconditional where it sets forth an obligation which is not qualified by any condition, or subject, in its implementation or effects, to the taking of any measure either by the institutions of the European Union or by the Member States. It is to be regarded as sufficiently precise to be relied on by an individual and applied by a court where it sets out an obligation in unequivocal terms. (35) If those conditions are met, that provision may be relied upon before the national courts by individuals against the Member State, even where the latter has failed to implement that provision correctly. (36)
59. Where a provision of EU law – such as, in this case, the provisions of Article 13(7) of Regulation 2019/943 – confers upon the competent national authorities a degree of latitude or discretion in assessing whether its conditions are met, and the measures to be taken, that does not necessarily call into question whether it is sufficiently precise and unconditional for the purpose of having direct effect. According to settled case-law, such a degree of latitude or discretion is neither a condition nor an additional requirement in respect of implementation or effects within the meaning of the principles referred to in point 57 of this Opinion. (37)
60. Rather, that case-law provides that, even though a provision of EU law leaves the Member States a degree of latitude when they adopt rules in order to implement it, a provision of that legislation may be regarded as unconditional and sufficiently precise where it imposes on Member States in unequivocal terms a precise obligation as to the result to be achieved, which is not coupled with any condition regarding its application. (38) Ultimately, the Court now equates the requirement for an unconditional obligation with the requirement for sufficient precision. It therefore follows that even imprecise obligations that, in themselves, leave discretion to the Member States may also be directly applicable. (39) That is the case, in particular, where the provision in question lays down a method for attaining the minimum level of protection or result prescribed under that provision. (40)
61. In the light of those conditions, I consider – as will be shown below – that the provisions laid down in Article 13(7) of Regulation 2019/943 relating to the method of calculating financial compensation are directly applicable.
2. Fulfilment of the criteria for direct effect
62. As already explained in point 27 et seq. of this Opinion, the calculation method provided for in Article 13(7) of Regulation 2019/943 is sufficiently clear, precise and unconditional, based on the criteria laid down therein, to be directly applied by the competent national authority, and in particular the system operator. The discretion granted to that body for the purposes of the counterfactual comparison in no way alters the fact that, in the event of non-market-based (downward) redispatching, the generator concerned is entitled to (reasonable) financial compensation. That entitlement to compensation would ultimately have to approximate to the economic situation in which the generator concerned would have been without that redispatching, that is to say, if it had been able to sell the redispatched volume of electricity under market conditions. The system operator is under a clear obligation towards the generator to ensure that that entitlement is met in accordance with the criteria and calculation methods provided for in Article 13(7).
63. It therefore follows that both the objective to be attained by the financial compensation, and the criteria and method for calculating it, are defined in a sufficiently clear, precise and exhaustive manner in those provisions that they may also be relied upon by the generators concerned before a court, and the latter will be able to understand them and apply them directly.
64. Where a Member State – such as Ireland, in the present case, with the contested decision – adopts implementing measures for the purpose of exercising the discretion conferred by Article 13(7) of Regulation 2019/943, that does not alter the direct effect of Article 13(7) in any way. A different question – which the Court is not called upon to answer in the present case – is whether those implementing measures remain within the limits of the sufficiently precise, unconditional and exhaustive criteria laid down in Article 13(7) and the discretion conferred by them, or whether they exceed those limits.
65. However, in the light of the criteria laid down in the contested decision for calculating the entitlement to financial compensation, doubts remain in that regard. The calculation method provided for in the contested decision is based, inter alia, on (precisely quantified) ‘ex ante revenues’ and a related presumption of an element that is ‘unjustifiably’ high or low, which can be rebutted only by a ‘valid reason’. It is a matter for the referring court to assess whether those criteria are compatible with the directly applicable provisions of Article 13(7) of Regulation 2019/943 and to determine whether it must, in that respect, give precedence to the latter.
3. Interim conclusion
66. Question 2 should therefore be answered to the effect that, even though Article 13(7) of Regulation 2019/943 confers discretion on the system operator, it nevertheless fulfils the conditions for direct effect, without prohibiting the adoption of national transposition or implementing measures aimed at facilitating the exercise of that discretion. However, those measures may not disregard the criteria and calculation methods laid down in that regulation and must remain within the limits of that discretion, which is a matter for the national court to verify.
C. Other remedies (Question 3)
67. Question 3 concerns other possible remedies and is raised only in case Article 13(7) of Regulation 2019/943 has no direct effect. There is therefore no need to answer it.
68. If the Court’s conclusion should differ from that set out in point 66 of this Opinion, it suffices to refer to the Court’s settled case-law, which provides that, even in the absence of direct effect, the courts of the Member States must interpret, to the greatest extent possible, their national law in conformity with EU law and afford individuals the possibility of obtaining redress where their rights have been impaired by a breach of EU law attributable to a Member State. (41)
D. Other questions (Question 4)
1. Deferring fulfilment of the entitlement to financial compensation (Question 4(a) and (b))
69. By Question 4(a) and (b), the referring court seeks to ascertain whether fulfilment of the entitlement to financial compensation under Article 13(7) of Regulation 2019/943 may be deferred until 2024 by means of a national implementing measure.
70. As the respondents and the Commission rightly point out, Regulation 2019/943 entered into force, pursuant to Article 71(1) thereof, on the twentieth day following that of its publication in the Official Journal and, pursuant to Article 71(2), has applied from 1 January 2020, without any transitional provision or exception being provided for in Article 13. Entitlement to receive financial compensation from the system operator on the basis of the provisions laid down in Article 13(7), which are directly applicable and take precedence, therefore exists as of that date and must be fulfilled by the system operator. Deferring fulfilment of that entitlement to a later date – until 2024 in the present case – is therefore incompatible with the aforementioned provisions and would also impair the full effectiveness, as also required under case-law, of those provisions. (42)
71. Question 4(a) and (b) should therefore be answered to the effect that the entitlement to financial compensation pursuant to the directly applicable provisions of Article 13 of Regulation 2019/943 must, according to Article 71(2) thereof, be fulfilled as of 1 January 2020, without any possibility for fulfilment to be deferred by means of national implementing measures.
2. Restricting or extending the personal scope of the entitlement to financial compensation (Question 4(c))
(a) Part one: Exclusion of small generators?
72. By the first part of Question 4(c), the referring court is essentially seeking to ascertain whether Article 13(7) of Regulation 2019/943 permits the adoption of national implementing measures that, in the case of (non-market-based downward) redispatching, restrict the entitlement to financial compensation to those generators participating in the ex ante (day-ahead) market, to the effect that de minimis generators are excluded from that entitlement. According to the parties to the proceedings, the de minimis generators that are not covered by Regulation 2019/943 are likely to be small producers who, in many cases, do not participate in the Irish day-ahead or intraday markets.
73. As the Commission and the respondents correctly argue, the entitlement to receive financial compensation from the system operator under the first sentence of Article 13(7) of Regulation 2019/943 is subject to the sole condition that the generators (‘the operator of the … generation, energy storage or demand response facility’) affected by non-market-based downward redispatching have accepted a connection agreement under which there is a guarantee of firm delivery of energy. In that respect, the capacity to generate electricity or the extent of the supply of electricity is irrelevant. The criterion of ‘net revenues from the sale of electricity on the day-ahead market’ laid down in Article 13(7)(b) serves, in that case, only to determine the amount of financial compensation according to the first method of calculation, but does not curtail the substantive entitlement to compensation.
74. Any other interpretation would also be contrary to the scheme and objectives of Articles 12 and 13 of Regulation 2019/943. Article 12(2) provides that Member States must ensure that, when dispatching, system operators are to give priority to generating installations (‘priority dispatch’ (43)) using renewable energy sources and having an installed electricity capacity of less than 400 kW. The continuity of the guarantee, in principle, of priority dispatch is also safeguarded by Article 12(6). It therefore follows that even smaller renewable energy generators benefit from priority dispatch, which is denied in cases where non-market-based downward redispatching takes place in accordance with Article 13(6). Furthermore, Article 13(6)(a) provides that such redispatching is permitted, as regards the generation of electricity from renewable energy sources, only within strict limits. Differentiation based on the volume of electricity generated or fed into the grid, or based on participation in the day-ahead market, that would have the effect of excluding certain generators (of renewable energy) from the personal scope of the entitlement to financial compensation would be incompatible with those rules.
75. Such differentiation would also be contrary to the principles enshrined in Article 13(1) and (2) of Regulation 2019/943. First, paragraph 1 provides that redispatching must be based on objective, transparent and non-discriminatory criteria and be open to all generation technologies (as well as all energy storage and demand response) within the limits of what is technically feasible (see point 52 of this Opinion). In that respect, there is no provision for differentiation based on generation capacity. Second, under paragraph 2, all generators (also) affected by market-based redispatching are, in principle, entitled to financial compensation.
76. The first part of Question 4(c) should therefore be answered to the effect that Article 13(7) of Regulation 2019/943 does not permit the adoption of national implementing measures that, in the event of (non-market-based downward) redispatching, restrict the entitlement to financial compensation to generators participating in the ex ante (day-ahead) market, or exclude ‘de minimis’ generators from the scope of that entitlement.
(b) Part two: Can intermediaries have an entitlement to compensation?
77. By the second part of Question 4(c), the referring court is essentially seeking to ascertain whether Article 13(7) of Regulation 2019/943 permits the adoption of national implementing measures that extend the entitlement to financial compensation in cases of (non-market-based downward) redispatching to electricity suppliers who may be only intermediaries and not generators. That is disputed in part by the respondents. Furthermore, according to the respondents’ submissions, a system operator may pay the compensation only directly to an eligible generator.
78. As already explained in point 73 of this Opinion, the first sentence of Article 13(7) of Regulation 2019/943 limits the entitlement to financial compensation from the system operator to electricity generators (‘the operator of the … generation, energy storage or demand response facility’) that have been affected by non-market-based redispatching and have accepted a connection agreement under which there is a guarantee of firm delivery of energy. Furthermore, it is only those generators who have ‘additional operating costs’, as referred to in Article 13(7)(a) of Regulation 2019/943, that must be taken into account for purposes of the two calculation methods for determining the amount of that compensation. In principle, that excludes from the personal scope of the entitlement to compensation intermediaries who are neither generators, nor operators of any of the specified facilities, and who have not entered into a connection agreement under which there is a delivery guarantee.
79. However, as the CRU and the Commission submit, it does not appear to be entirely ruled out that national implementing measures could regulate more precisely the manner in which compensation payments are made to eligible generators. For technical reasons, such as for the purpose of offsetting, that could allow for the involvement of an intermediary as a paying agency, provided that that does not compromise the generator’s entitlement to compensation and does not lead to an unfair transfer of the risk of insolvency, which is a matter for the referring court to examine.
80. The second part of Question 4(c) should therefore be answered to the effect that Article 13(7) of Regulation 2019/943 does not permit the adoption of national implementing measures that extend the entitlement to financial compensation, in the event of (non-market-based downward) redispatching, to an intermediary that does not meet the conditions laid down in the first sentence of that provision. That would not preclude such an intermediary from acting as a paying agent, provided that that does not compromise the fulfilment of the generator’s entitlement to compensation and does not result in an unfair transfer of the risk of insolvency, which is a matter for the referring court to examine.
3. Regarding payments above the market price based on CPPAs as ‘financial support’ (Question 4(d))
81. By Question 4(d), the referring court is essentially seeking to ascertain whether the concept of ‘financial support’, as referred to in Article 13(7)(b) of Regulation 2019/943, which, according to that provision, is to be deemed ‘part of the net revenues’, covers payments above the market price made to renewable energy generators on the basis of CPPAs. (44)
82. That question is highly disputed between the parties involved. In the opinion of the referring court, the guaranteed strike price stipulated in the CPPA – which may also be above the market price – forms an important part of the financial support for renewable energy generators (see point 15 of this Opinion). However, the guaranteed strike price is not recognised as ‘financial support’ within the meaning of Article 13(7)(b) of Regulation 2019/943 in either the contested decision, or by the CRU. The CRU asserts that such financial support can be only public support in the sense of a State subsidy.
83. I consider that argument put forward by the CRU to be unsound, not only because ‘financial support’ is a broad concept but also for systematic and teleological reasons. In my view, the concept is intended to cover not only State financial aid but also private financial assistance, including, as the case may be, where the latter has been authorised or initiated by the State.
84. A definition of ‘financial support’ is not provided in Regulation 2019/943. Nor is it – at least not expressly – subject to the reservation under application of Articles 107 and 108 TFEU, which may be an indication that ‘financial support’ could mean only State aid within the meaning of the concept of aid under Article 107(1) TFEU. By contrast, that reservation does apply to the power purchase agreements under Article 19a of Regulation 2019/943 (Article 19a(4)) – that is to say the private CPPAs forming the subject matter of the present dispute, which means that the CRU’s line of argument already appears to be flawed simply by virtue of that reason.
85. In my view, Article 13(7)(b) of that regulation is in fact intended to cover any form of financial support for electricity generation – particularly generation from renewable energies – regardless of whether it comes from public or private resources. That is confirmed by the possible classification of CPPAs into the categories of authorised instruments for promoting the generation of electricity from renewable energy and ensuring security of supply, as provided for in Articles 19a, 19d and 21 of Regulation 2019/943.
86. According to Article 19a(1) of Regulation 2019/943, Member States are to promote the uptake of power purchase agreements, with a view to providing price predictability and reaching the decarbonisation objectives set out in their integrated national energy and climate plans, including with respect to renewable energy. In that regard, they may, in accordance with paragraphs 3 and 4 of that article, provide, in a coordinated manner, for state-backed guarantee schemes at market prices designed to reduce the financial risks associated to offtaker payment default in the framework of power purchase agreements, as well as for private guarantees or facilities pooling demand for power purchase agreements. In that respect, a state-backed guarantee scheme must ‘without prejudice to Articles 107 and 108 TFEU …, include provisions to avoid lowering the liquidity in electricity markets and shall not provide support to the purchase of generation from fossil fuels’. The order for reference does not make clear whether the guaranteed strike price stipulated in the CPPA – which may also be above the market price – is hedged by such a state-backed guarantee scheme, or whether it is, in that regard, merely a private guarantee. In any event, either case would amount to financial assistance authorised, in principle, by Regulation 2019/943.
87. The CPPAs could also be incorporated into a direct price support scheme in the form of two-way contracts for difference for investment in new facilities for renewable energy generation in accordance with Article 19d of Regulation 2019/943, (45) the revenues from which are to be distributed to final customers (paragraph 5). (46) Last, CPPAs could form part of a capacity mechanism, as contemplated in Article 21(1) of that regulation. (47)
88. It is therefore clear that ‘financial support’ within the meaning of Article 13(7)(b) of Regulation 2019/943 may take the form of State assistance or State-initiated assistance from private resources. There are, moreover, systematic and teleological reasons supporting a conclusion that there is no basis for excluding revenues from CPPAs that may be above the market price when calculating the financial compensation.
89. Similarly to an order for priority dispatch provided for in Article 12(2) to (4) of Regulation 2019/943, which is also subject to compliance with the State aid rules set out in Articles 107, 108 and 109 TFEU, the financial compensation provided for in Article 13(7) is also intended to promote or hedge the generation and supply of renewable energy. Moreover, it follows from the somewhat inconsistent case-law of the Court that legally mandated assistance for the generation of electricity from renewable energies does not necessarily fall within the concept of State aid, particularly if the assistance is not provided by means of ‘State resources’. (48) The broad concept of ‘financial support’, whether from public or private resources, takes that notion into account. On the contrary, it has apparently been deliberately chosen by the EU legislature in order to cover the diverse financial assistance measures for promoting the generation of electricity, particularly from renewable energy sources, irrespective of whether or not they align with the concept of State aid for the purposes of Article 107(1) TFEU.
90. Question 4(d) should therefore be answered to the effect that the concept of ‘financial support’ under Article 13(7)(b) of Regulation 2019/943 covers, in principle, payments above the market price made to renewable energy generators on the basis of power purchase agreements, such as the CPPAs, within the meaning of Article 19a of Regulation 2019/943.
V. Conclusion
91. I therefore propose that the Court of Justice should answer the questions referred for a preliminary ruling by the Supreme Court (Ireland) as follows:
(1) (a) Article 13(7) of Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity confers upon generators with firm network access and a delivery guarantee, and who are subjected to non-market-based downward redispatching, an entitlement to financial compensation that corresponds as closely as possible to the hypothetical loss of the revenue (including foregone financial support) that would have been generated had the volume of electricity in question been supplied under market conditions, but does not necessarily fully neutralise such lost revenue in economic terms. The wording ‘unjustifiably low or an unjustifiably high compensation’ contained in Article 13(7) of Regulation 2019/943 is intended to grant a reasonable financial compensation to generators affected by such redispatching. In that respect, the system operator enjoys discretion.
(b) The entitlement to financial compensation under Article 13(7) of Regulation 2019/943 is not conditional upon whether or not a generator affected by non-market-based downward redispatching enjoys the benefit of priority dispatch and, furthermore, the fulfilment of that entitlement may not be made subject to such differentiation under national implementing measures.
(2) Even though Article 13(7) of Regulation 2019/943 confers discretion on the system operator, it nevertheless fulfils the conditions for direct effect, without prohibiting the adoption of national transposition or implementing measures aimed at facilitating the exercise of that discretion. However, those measures may not disregard the criteria and calculation methods laid down in that regulation and must remain within the limits of that discretion, which is a matter for the national court to verify.
(3) (a) The entitlement to financial compensation pursuant to the directly applicable provisions of Article 13 of Regulation 2019/943 must, according to Article 71(2) thereof, be fulfilled as of 1 January 2020, without any possibility for fulfilment to be deferred by means of national implementing measures.
(b) Article 13(7) of Regulation 2019/943 does not permit the adoption of national implementing measures that:
– in the event of (non-market-based downward) redispatching, restrict the entitlement to financial compensation to those generators participating in the ex ante (day-ahead) market, or exclude ‘de minimis’ generators from the scope of that entitlement;
– extend the entitlement to financial compensation, in the event of (non-market-based downward) redispatching, to an intermediary that does not meet the conditions laid down in the first sentence of that provision. That would not preclude such an intermediary from acting as a paying agent, provided that that does not compromise the fulfilment of the generator’s entitlement to compensation and does not result in an unfair transfer of the risk of insolvency, which is a matter for the referring court to examine.
(c) The concept of ‘financial support’ under Article 13(7)(b) of Regulation 2019/943 covers, in principle, payments above the market price made to renewable energy generators on the basis of power purchase agreements (Corporate Power Purchase Agreements) within the meaning of Article 19a of Regulation 2019/943.
1 Original language: German
2 Regulation of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity (OJ 2019 L 158, p. 54), last amended by Regulation (EU) 2024/1747 of the European Parliament and of the Council of 13 June 2024 amending Regulations (EU) 2019/942 and (EU) 2019/943 as regards improving the Union’s electricity market design (OJ L, 2024/1747).
3 Directive of the European Parliament and of the Council of 5 June 2019 on common rules for the internal market for electricity and amending Directive 2012/27/EU (OJ 2019 L 158, p. 125), last amended by Directive (EU) 2024/1711 of the European Parliament and of the Council of 13 June 2024 amending Directives (EU) 2018/2001 and (EU) 2019/944 as regards improving the Union’s electricity market design (OJ L, 2024/1711).
4 See Article 3 of Regulation 2019/943 (‘Principles regarding the operation of electricity markets’), which specifies, inter alia, that prices are to be formed on the basis of demand and supply (point (a)), and that market rules are to encourage free price formation and avoid actions which prevent price formation on the basis of demand and supply (point (b)).
5 See Article 3(c) and (f) of Regulation 2019/943.
6 As the referring court correctly states, the market-based dispatching measures governed by Article 12 of Regulation 2019/943 therefore differ from the market-based or non-market-based redispatching measures provided for in Article 13 of that regulation. According to that definition, redispatching occurs if there is ‘physical congestion’, or where a ‘curtailment’ is necessary to ensure system security. The non-market-based downward redispatching at issue in the present case serves the purpose of reducing the level of renewable generation in the system.
7 According to point 20 of Article 2 of Regulation 2019/943, ‘priority dispatch’ means ‘with regard to the self-dispatch model, the dispatch of power plants on the basis of criteria which are different from the economic order of bids and, with regard to the central dispatch model, the dispatch of power plants on the basis of criteria which are different from the economic order of bids and from network constraints, giving priority to the dispatch of particular generation technologies’. The terms ‘central dispatching model’ and ‘self-dispatch model’ are defined in points 29 and 30 of Article 2 of that regulation.
8 Directive of the European Parliament and of the Council of 25 October 2012 on energy efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC (OJ 2012 L 315, p. 1).
9 Directive of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC (OJ 2009 L 140, p. 16).
10 See pp. 27 and 28 of the decision at issue.
11 See also Article 19a of Regulation 2019/943.
12 Judgment of 24 June 2019 (C‑573/17, EU:C:2019:530).
13 Article 13(7)(b) of Regulation 2019/943 on the loss of ‘net revenues’ concerns only non-market-based downward redispatching.
14 Under Article 13(7) of Regulation 2019/943, there is no entitlement to financial compensation ‘in the case of producers that have accepted a connection agreement under which there is no guarantee of firm delivery of energy’ (emphasis added).
15 See the second sentence of Article 13(7)(b) of Regulation 2019/943. As apparent from Question 4(d), the sole matter in dispute in the present case is whether the strike price guaranteed in the CPPAs amounts to such ‘financial support’ in the event that the strike price is above the market price (see point 81 et seq. of this Opinion).
16 See Article 13(7)(a) of Regulation 2019/943 (‘additional fuel costs in the case of upward redispatching, or backup heat provision in the case of downward redispatching’; emphasis added).
17 Ireland has confirmed, in response to a question put to it by the Court during the hearing, that financial compensation pursuant to Article 13(7) of Regulation 2019/943 is also subject to taxation in Ireland.
18 I consider the Commission’s argument that it should be treated as an ‘exception’ to the first calculation method to be misleading and not very helpful.
19 In that respect, there is hardly any difference between the different language versions. However, in the French-language version (‘indûment’ (unduly) instead of ‘injustifié’ (unjustifiably)) it is made more explicit that an evaluation is to be carried out regarding the reasonableness of the compensation.
20 Such revenues are therefore not the foregone (hypothetical) ‘net revenues’ referred to in Article 13(7)(b) of Regulation 2019/943. That would suggest, moreover, that in such case the first calculation method is completely inapplicable and only the second method is to be applied.
21 See also the second sentence of Article 13(7) of Regulation 2019/943 (‘such financial compensation’; ‘ein solcher finanzieller Ausgleich’ in the German-language version).
22 In derogation from the principle laid down in Article 10(1) (‘there shall be neither a maximum nor a minimum limit to the wholesale electricity price’), such a guarantee of minimum revenue is provided for only in Article 10(2) of Regulation 2019/943 (‘NEMOs may apply harmonised limits on maximum and minimum clearing prices for day-ahead and intraday timeframes’).
23 In relation to market-based redispatching also, Article 13(2) of Regulation 2019/943 merely states that ‘resources that are redispatched’ are to be ‘selected from among generating facilities, energy storage or demand response using market-based mechanisms and shall be financially compensated’ (emphasis added).
24 That involves electricity trading on the following day and short-term electricity trading.
25 See Article 12(6)(b) of the European Commission Proposal of 30 November 2016 for a Regulation of the European Parliament and of the Council on the internal market for electricity (COM(2016) 861 final): ‘90% of the net revenues from the sale of electricity on the day-ahead market that the generating or demand facility would have generated without the curtailment or redispatching request.’
26 Compromise text of the Proposal for a Regulation of the European Parliament and of the Council on the internal market for electricity of 18 January 2019, Interinstitutional File 2016/0379 (COD), p. 66 (available at: https://www.europarl.europa.eu/meetdocs/2014_2019/plmrep/COMMITTEES/ITRE/DV/2019/01-23/4-provisional-agreement-karins-regulation-on-electricity-EN.pdf).
27 As already explained in footnote 20 to this Opinion, that does not necessarily apply to upward redispatching. In the case of an upward redispatch, there can be no foregone (hypothetical) ‘net revenue’, as referred to in Article 13(7)(b) of Regulation 2019/943, which means that only the second calculation method should be applicable, taking into account the actual revenues and the additional operating costs.
28 As the respondents also argued during the hearing, the TSO is aware of the volume of electricity that it prohibited from being fed into the grid by means of downward redispatching. Similarly, market revenues realised, or likely to be realised, on the day-ahead market for that volume at the time of redispatching should be determinable. For its part, the generator has the information on its own operating costs.
29 See Articles 8, 12 to 18 and 28 et seq. of Regulation 2019/943.
30 That question actually appears to relate to Article 12 rather than to Article 13(7) of Regulation 2019/943, as also argued by the respondents and confirmed by the CRU in its written observations. Article 12(2) governs priority dispatch (as defined in point 20 of Article 2) whereby electricity generating installations using renewable energy sources with an installed electricity capacity of less than 400 kW are given priority in principle. According to Article 12(4), Member States may also provide for priority dispatch in the case of power-generating facilities using high-efficiency cogeneration with the same electricity capacity. In that respect, Article 12(6) serves to ensure that power-generating facilities that use renewable energy sources or high-efficiency cogeneration, and were commissioned before 4 July 2019 – and which, when commissioned, were subject to priority dispatch under the rules in effect until that date – will continue to benefit from priority dispatch. The decision at issue in the main proceedings takes that into account by providing for different calculation methods for entitlement to financial compensation, depending on whether the power-generating facility was commissioned before or after 4 July 2019.
31 Judgment of 24 June 2019, C‑573/17, EU:C:2019:530, concerning the question of direct effect and the primacy of provisions of Council Framework Decision 2008/909/JHA of 27 November 2008 on the application of the principle of mutual recognition to judgments in criminal matters imposing custodial sentences or measures involving deprivation of liberty for the purpose of their enforcement in the European Union (OJ 2008 L 327, p. 27).
32 See judgments of 24 June 2019, Popławski (C‑573/17, EU:C:2019:530, paragraph 60 et seq.), and of 18 December 2025, Commission v Poland (Ultra vires review of the Court’s case-law – Primacy of EU law) (C‑448/23, EU:C:2025:975, paragraphs 114 to 117 and the case-law cited).
33 See, to that effect, judgments of 11 January 2001, Monte Arcosu (C‑403/98, EU:C:2001:6, paragraphs 26 to 28); of 14 April 2011, Vlaamse Dierenartsenvereniging and Janssens (C‑42/10, C‑45/10 and C‑57/10, EU:C:2011:253, paragraph 47 et seq.); of 19 December 2019, Coöperatieve Producentenorganisatie en Beheersgroep Texel (C‑386/18, EU:C:2019:1122, paragraphs 63 and 64); and of 30 May 2024, Expedia (C‑663/22, EU:C:2024:433, paragraphs 40 to 42 and the case-law cited).
34 See also Opinion of Advocate General Rantos in Electrabel and Others (C‑633/23, EU:C:2025:131, point 34).
35 See, to that effect, judgments of 8 March 2022, Bezirkshauptmannschaft Hartberg-Fürstenfeld (Direct effect) (C‑205/20, EU:C:2022:168, paragraph 18), and of 21 December 2023, Papier Mettler Italia (C‑86/22, EU:C:2023:1023, paragraph 76 and the case-law cited).
36 See, to that effect, judgment of 6 October 2015, T-Mobile Czech Republic and Vodafone Czech Republic (C‑508/14, EU:C:2015:657, paragraph 52 and the case-law cited). See also my Opinion in Joined Cases ECB and Commission v Corneli (C‑777/22 P and C‑789/22 P, EU:C:2024:973, point 87).
37 See, to that effect, judgments of 6 October 2015, T-Mobile Czech Republic and Vodafone Czech Republic (C‑508/14, EU:C:2015:657, paragraph 53 and the case-law cited), and of 8 March 2022, Bezirkshauptmannschaft Hartberg-Fürstenfeld (Direct effect) (C‑205/20, EU:C:2022:168, paragraph 19).
38 See, to that effect, judgments of 3 September 2014, GMAC UK (C‑589/12, EU:C:2014:2131, paragraph 32), and of 21 December 2023, Papier Mettler Italia (C‑86/22, EU:C:2023:1023, paragraph 77 and the case-law cited). See also my Opinions in Impact (C‑268/06, EU:C:2008:2, point 96) and in Joined Cases ECB and Commission v Corneli (C‑777/22 P and C‑789/22 P, EU:C:2024:973, point 89).
39 See Kokott, J., ‘Zur unmittelbaren Wirkung des Unionsrechts’, Archiv des öffentlichen Rechts, Vol. 148, 2023, p. 496 et seq. (at p. 501).
40 See, to that effect, judgments of 6 October 2015, T-Mobile Czech Republic and Vodafone Czech Republic (C‑508/14, EU:C:2015:657, paragraph 53); of 14 January 2021, RTS infra and Aannemingsbedrijf Norré-Behaegel (C‑387/19, EU:C:2021:13, paragraph 49); and Opinion of Advocate General Rantos in Electrabel and Others (C‑633/23, EU:C:2025:131, points 34 to 36).
41 See, to that effect, judgment of 24 June 2019, Popławski (C‑573/17, EU:C:2019:530, paragraphs 55 to 57 and the case-law cited).
42 See, to that effect, judgment of 24 June 2019, Popławski (C‑573/17, EU:C:2019:530, paragraphs 53 to 58).
43 See point 20 of Article 2 of Regulation 2019/943.
44 Corporate Power Purchase Agreements; see Article 19a of Regulation 2019/943 (see point 15 above).
45 According to the referring court, CPPAs usually take the form of ‘contracts for difference’ (see point 15 of this Opinion).
46 Furthermore, such a system would have to be assessed by the Commission in accordance with Article 19d(3) of Regulation 2019/943, as well as pursuant to Articles 107 and 108 TFEU.
47 See pp. 59 and 60 of the Irish capacity mechanism plan of 16 December 2019 (available at: https://assets.gov.ie/static/documents/implementation-plan-for-ireland.pdf), according to which 15% of electricity demand is to be met by CPPAs. In principle, such a capacity mechanism also falls within the scope of Article 107 and 108 TFEU; see judgment of 2 September 2021, Commission v Tempus Energy and Tempus Energy Technology (C‑57/19 P, EU:C:2021:663).
48 The questions as to definitions arising in that regard, particularly as regards the use of ‘State resources’ and their imputability to the State, are often highly disputed and difficult to assess; see judgments of 13 March 2001, PreussenElektra (C‑379/98, EU:C:2001:160, paragraph 57 et seq.); of 28 March 2019, Germany v Commission (C‑405/16 P, EU:C:2019:268, paragraph 52 et seq.); and of 26 September 2024, Covestro Deutschland and Germany v Commission (C‑790/21 P and C‑791/21 P, EU:C:2024:792, paragraph 84 et seq.).
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