Regulations implemented earlier this year retroactively cutting tariffs under the Northern Ireland Renewable Heat Incentive (RHI) could create a legal precedent to reduce agreed support in schemes across the wider renewables sector.
That is the conclusion of Andrew Trimble, executive chair of the Renewable Heat Association of Northern Ireland (RHANI), the body preparing for a second judicial review in October challenging the lawfulness of the measures.
To mitigate a perceived overspend of £28 million over the next year, former NI economy minister Simon Hamilton passed legislation in January to retrospectively reduce the tariffs already agreed under the non-domestic scheme, while an annual cap on the number of hours eligible for payment was also introduced.
This would be catastrophic according to Trimble, who told Solar Power Portal that if upheld, the 2017 regulations would create a legal precedent to allow governments in any common law jurisdictions to reduce tariffs or payments across existing schemes in the renewable energy sector.
“The implications for RHI and other renewable projects across the rest of the UK and across the common law jurisdictions are immense. It could prove catastrophic,” he said.
In a letter to RHANI members seen by SPP, Trimble further explained: “The potential for a legal precedent permitting retrospective legislation is real. This could have a huge impact across not only the renewable sector but also across all aspects of public law across the UK and across the common-law jurisdictions of the Commonwealth.
“It could mean that schemes for photovoltaic generation, wind power, anaerobic digestion and others could be re-visited, cancelled or the tariffs and ROCS amended.”
Attempts to retroactively introduce cuts to the UK’s solar feed-in tariff in 2011 resulted in a serious of embarrassing defeats for the coalition government in the high court and court of appeal, where the plans were branded “legally flawed”.
Lawyers in the case brought forward by Friends of the Earth, HomeSun and Solarcentury said the rejection of the appeal prevented a precedent being set which would allowed the government to make hard retrospective policy changes in future.
The judgment stated: "The question [is] whether parliament conferred a power [to DECC] to make a modification with such a retrospective effect. It did not."
This eventually ended when the Supreme Court threw out the government’s last attempt of appeal in 2012, while following cases resulted in the coalition being forced to pay £132 million damages to solar companies, dubbed the Breyer Group, in 2014.
Speaking about the possibility of a different outcome in Northern Ireland, Trimble said: “The legislation would under any normal circumstances in any British court be regarded as ultra vires [beyond one's legal power or authority] because you can't have a piece of legislation that is retrospective,”
He added that what was being proposed was "fundamentally against common law, European law and common sense".
October’s hearing will be the second time RHANI has taken the Northern Irish government to court after securing a preventative decision to block the Simon Hamilton from naming the scheme’s claimants.