Independent wind farm owners in Ireland are taking a legal challenge against the European Commission over its refusal to conduct a formal investigation into claims that fossil fuel electricity producers in Ireland are being granted illegal State aid in the form of reduced commercial rates.
The Court of Justice of the European Union (CJEU) will begin a hearing tomorrow in a case taken by the Irish Wind Farmers’ Association (IWFA) and three of its members against the summary dismissal in 2019 by the then EU Commissioner for Competition, Margrethe Vestager, of its claims.
The Commission refused to initiate a formal investigation procedure after concluding the method for assessing commercial rates for fossil fuel electricity producers did not constitute State aid under EU legislation. The IWFA had filed its original claim in February 2016.
The three IWFA members who are parties to the case are Carrons Wind Farm, Briska, Co Limerick; Foyle Wind Farm, Courtstown, Co Kilkenny and Greenoge Wind Farm, Ravenswood, Co Carlow.
Lawyers for the IWFA will ask the CJEU to annul the Commission’s decision to reject its claims over illegal State aid. They will argue that the wind farm operators were deprived of their procedural rights by the Commission’s refusal to open a formal investigation into the case.
On the wider issue, The IWFA claims methods used for the calculation of commercial rates under the Valuation Act 2001 constitute aid which is incompatible with the EU internal market.
It argues that the methods used to calculate the Net Annual Value (NAV) are unfair and it highlighted what it claimed were figures which showed differences in the valuation of properties owned by fossil fuel producers of electricity and other competitors.
The IWFA claims the “contractor’s method” used for calculating the NAV for most fossil fuel operators has resulted in them being charged lower commercial rates than wind farms whose rates bills are usually calculated using a different method.
IWFA chairperson Grattan Healy said: “While this week’s case is about trying to get the European Commission to conduct a formal investigation into our claims, there is a problem with how rates are calculated for energy providers. Since the process of the revaluation of rates was begun, commercial rates for fossil fuel operators have gone down, while those for wind farms have increased radically.”
He added: “The level of increase is such that commercial rates for wind farm operators are taking back every cent which we gain in supports from the Government for providing renewable energy.”
The IWFA said the Valuation Office had great flexibility over the methods used to calculate NAVs of rateable sites but it wanted to ensure “there is a level playing field between different providers of electricity”.
The Government has rejected the IWFA’s claims of unfairness and insisted that the system for calculating NAVs is based on the general principle of equality of treatment.
It also argued that commercial rates were based on the value of properties and comparisons based on the NAV per megawatt were “not relevant.”
The Government said there was no evidence that use of different methods to calculate the NAV was not justified given the differences between the premises of fossil fuel operators and wind farms in terms of their physical and locational differences and the fact they operate under different market and commercial conditions.
It also argued there was no analysis or empirical evidence to support the IWFA’s claims while it noted individual local authorities applied their own “multiplier” to NAVs to determine the actual amount owed in commercial rates.