Large energy users have a crucial role to play in embedding greater resilience in Ireland’s energy system. David Cashman explains why Following recent geopolitical developments and the subsequent supply chain disruption to energy resources here in Ireland, ensuring the security of supply is paramount. With one of the highest ratios of energy import dependency in the EU, Ireland is more exposed than other countries to sudden shocks and disruption. As a result, embedding increased resilience in our energy system is a priority, as set out in the Government’s Energy Security in Ireland to 2030 strategy. Large energy users (LEUs), such as data centres, have a vital role to play in driving this resilience. Electricity demand is projected to grow significantly in the years ahead, and LEUs account for a sizeable portion of this. With an annual usage of over 500,000 kWh, EirGrid estimates that, by 2031, LEUs will account for 28 percent of total energy demand. While the growing number of LEUs represents strong economic activity, it does mean that a small number of these large consumers will be key to ensuring the security of supply. The question then becomes: how can this security be maintained without the cost of increased emissions? The electricity system must continue to be balanced – accounting for increasingly tight capacity margins, as highlighted in the annual Generation Capacity Statement – while LEUs must play their part in delivering on emissions reduction targets. With the number of system alerts forecast to increase – coupled with delays in connecting new generation capacity (due to planning permission, environmental impacts, and supply chain constraints) – LEUs must look to introduce interim measures now that, while ensuring security of supply, do not increase emissions. Legislative and regulatory landscape Climate Action Plan 2024 builds on initiatives mandated in the 2023 plan, including the introduction of incentives to drive low-carbon consumption and increase LEU flexibility in demand. Following Climate Action Plan 2023, the Commission for Regulation of Utilities (CRU) published an initial view of a demand-side strategy – the National Energy Demand Strategy (NEDS) – for consultation. This proposes a range of initiatives and builds on the ambition set out in the Energy Security in Ireland to 2030 strategy which highlights how LEUs “can lead and contribute to this transition by…shifting energy demand away from peak times or at times of system stress and moving demand to times of high renewable generation”. A core tenet of NEDS is a review of LEUs’ connection policy, with the associated consultation closing in late February. This review will inform the development of a new pathway for LEUs to connect to the electricity and gas systems, which will minimise carbon emission increases while accounting for system capacity. This review is very much in line with the Government Statement on the Role of Data Centres in Ireland’s Enterprise Strategy, which sets out how new data centre sites will account for the additional demands placed on energy infrastructure, demonstrating a clear pathway to decarbonised services. Five key measures There are five measures LEUs can adopt now to support Ireland’s decarbonisation plans whilst ensuring security of supply: 1. Decarbonising behind-the-meter generation Implementation of cost-effective alternatives to carbon-intensive backup generation, including: Matching gas with domestic green gas certificates; and Transitioning sites’ backup generators to renewables-based, biodegradable fuels, such as hydrotreated vegetable oil. 2. Investing in behind-the-meter storage Investment in on-site, behind-the-meter storage means LEUs can utilise stored energy at peak times and times of system stress. This ensures high network charges – those associated with electricity imported from the grid – are minimised, while LEUs can ‘sell’ stored energy back to the grid (thus creating an additional revenue stream and return on behind-the-meter storage investment). 3. Unlocking flexibility in load At times of security of supply events, disruption to business-as-usual operations can lead to an increase in emissions. This can be minimised by unlocking flexibility in load: Flexible load: Reducing reliance on the electricity system by using behind-the-meter generation and/or storage to meet electricity demand. Flexible load times: Rescheduling server load processing to a time when system congestion is lower, or renewables are more abundant on the system. Flexible load locations: Relocating server load processing from one data centre to another if there is lower demand – or higher renewables outputs – in the alternative location(s). 4. Adopting Corporate Power Purchase Agreements (CPPAs) Arrangements whereby a company procures renewable electricity directly through a contractual agreement with a renewables-based generator are known as CPPAs. These are an attractive option for LEUs as they mitigate the impacts of energy price volatility whilst also reducing electricity-related emissions. 5. Implementing enhanced emissions and energy usage reporting The new Corporate Sustainability Reporting Directive – coupled with broader ESG scrutiny – places additional demands on companies regarding the disclosure of climate and environmental data. With mandatory requirements set to be introduced, LEUs should now begin to increase transparency and reporting on emissions and energy usage, starting with materiality/gap and ESG maturity assessments. Building future resilience Rising electricity demand and a dependency on energy imports mean there is an urgent need to embed increased resilience in our energy system. LEUs have a crucial role to play in driving this national resilience. This cannot come at the cost of increased emissions, however. Adoption of interim measures that will ensure security of supply without increasing emissions means LEUs are in line with broader legislative and regulatory proposals and are also building future resilience. David Cashman is Director of Power and Utilities at EY

CPPA use has risen sharply in Ireland in the last two years against a backdrop of price volatility and an increasing focus on the role corporates must play in reaching net zero, writes Robert Costello A Corporate Power Purchase Agreement (CPPAs) is a long-term contract under which a corporate (offtaker) agrees to buy some or all of its electricity directly from a renewable energy generator.  There are two main types of CPPAs in Ireland: Financial (virtual) CPPA – this agreement acts as a financial hedge that enables the corporation to support renewable energy projects and secure a stable energy price without physically trading power. Physical CPPA – the corporate receives physical delivery of electricity from the generator, generally through the grid. Benefits of CPPAs The State’s climate action plan aims to reduce emissions by 51 percent by 2030 and deliver 80 percent renewable electricity by 2030. It includes a target of 15 percent of electricity demand to be delivered by CPPAs. CPPAs offer an alternative route to market for generators who were excluded from the Renewable Electricity Support Scheme (RESS), were unsuccessful in RESS or for whom the terms and conditions are not commercially viable. The long-term stable income that comes with a CPPA with a financially strong counterparty gives generators the financial certainty they need to secure debt funding to build new projects.  Meanwhile, corporates benefit due to: Budget certainty, particularly given volatile market prices; Delivering additionality – the renewable energy project would not have been built without the corporate's involvement (via the CPPA); and Guarantees of origin (GOs). Key commercial considerations When negotiating a CPPA, corporates must consider that CPPAs are typically long-term contracts (about 15 years), although some short-term contracts (less than five years) have been agreed in the Irish market in the past year. The offtakers forecast energy needs to determine the size of the asset with which it can contract for some or all of the output. There are four types of contract: pay-as-produced; shaped; baseload; and pay-as-consumed. Pay-as-produced contracts are the least risky for developers (as generation is not fully predictable). Other forms of contract need a significant premium from the offtaker as the generator is taking the volume risk. CPPAs can be fixed-priced, variable or a combination of both. Fixed pricing increases cash flow certainty for both parties, helping with budgeting, project financing and protecting margins. However, it can expose offtakers if there are significant wholesale market price declines, as they are locked in at higher prices. Fostering growth CPPAs present a pathway to achieving Ireland’s ambitious climate action goals. By facilitating direct transactions between corporations and renewable energy generators, CPPAs not only contribute to decarbonisation efforts but also foster economic stability and growth. However, navigating the complexities of CPPAs requires careful consideration of key commercial factors. From contract duration to pricing mechanisms, each element demands strategic planning to mitigate risks and maximise benefits for all stakeholders. In essence, CPPAs represent more than just contractual agreements; they embody a collaborative approach towards a greener, more sustainable future. By harnessing the collective power of corporates and renewable energy generators, Ireland can accelerate its journey to a low-carbon economy while fostering innovation and resilience in the energy sector. Robert Costello is a Partner with PwC

Irish support for EU membership remains strong despite concerns about the direction it is taking and declining trust in political institutions, writes Noelle O Connell Despite a slight decline of four percent from 2023, the overwhelming majority of people in Ireland (84%) and Northern Ireland (76%) believe Ireland should remain a member of the European Union, according to the EU Poll 2024 from European Movement Ireland. While support for EU membership remains strong, however, the 2024 results indicate a notable decline in both jurisdictions on the question of whether or not the EU is moving in the right direction – down from 58 percent in 2023 to 49 percent this year. Voter concerns Ireland’s continuing support for EU membership is welcome at a pivotal time for Europe. This year’s less favourable findings on several key issues are of concern, however, and serve as a timely reminder of the continual need for public engagement, dialogue and communication on EU affairs. It also highlights the need for the EU to listen to voters’ concerns. Areas of low satisfaction with the EU’s performance include its response to issues such as migration, the war in Ukraine and the Israel-Gaza conflict. Forty-six percent of respondents in Ireland and 44 percent in Northern Ireland ranked the EU’s performance on the issue of migration as its weakest. The timing of this survey coincides with the debate on the new EU Migration and Asylum Pact. The EU’s performance on trade and business continues to score well among respondents at 46 percent in Ireland and 55 percent in Northern Ireland. This underlines the positive public perception of the Single Market and its benefit to the economies in the North and south. Political popularity Of concern in this year’s poll is the growing lack of trust in political institutions in Ireland and Northern Ireland, which could reflect a wider global trend of increasing polarisation in public and political discourse. When asked which of the institutions they trusted most, 34 percent chose the Irish Government and 26 percent the EU. A significant majority (40 percent) stated none of the above. In Northern Ireland, trust in the EU came in at 28 percent, while trust in the Irish Government ranked higher than the UK Government at 24 percent compared to just eight percent, with the Northern Ireland Executive being included this year for the first time. Thirty-one percent said they did not trust any of the institutions listed. Expanding the EU This year marks the 20th anniversary of the biggest ever enlargement of the European Union when ten countries became members under the Irish presidency in 2004. We welcome the consistently strong support across the island of Ireland for EU enlargement, with 57 percent in favour of more countries joining the Union. Noelle O Connell is CEO of European Movement Ireland 

Stephen Lowry delves into details of the upcoming referendum on Ireland’s proposed participation in the Unified Patent Court  In the wake of referenda on family and care, voters were due to decide on another important constitutional referendum on 7 June. Although the vote has since been postponed by the Government, voters will be asked whether they approve of Ireland’s proposed participation in the Unified Patent Court (UPC).  First mooted in 2013 with the signing of the Unified Patent Court Agreement (UPCA), the UPC is a new international court with exclusive competence to grant ‘unitary patents’ – a new form of patent that gives uniform protection across all participating European countries on a one-stop-shop basis.  Currently within its jurisdiction are 17 EU Member States, though this number is expected to increase over the coming months as more countries move to ratify the UPCA.  Before Ireland can join the UPC, an amendment to the Constitution is needed as doing so will involve a transfer of jurisdiction in patent litigation from the Irish courts to an international court.  So, what’s to be gained from joining the UPC?  1. Reduced cost and administrative burden  At present, there is no single European patent valid in all Member States. Instead, individual patents must be held in each country where the patent is to be applied.  Applications can be made to either the national patent office in each country or as a single application to the European Patent Office (EPO).   Rather than acting as a one-stop-shop for patent litigation, however, the EPO can essentially only grant a bundle of national patents for the countries designated by the patent application.  If subject to challenge, these patents must then be litigated separately in the national courts of each country in which they are granted – thereby potentially giving rise to legal costs across a number of jurisdictions as well as risking the prospect of different legal outcomes.  By contrast, the UPC will instead allow applicants to apply for a single patent, which will be valid across multiple Member States, upon which it will be the sole arbiter.  2. Boost to FDI and export activity If the referendum is carried, the Government has signalled its intention to establish a local division of the UPC in Ireland. Doing so would mean Ireland would be the only common law, native English-speaking jurisdiction with a UPC.  Coupled with Ireland’s already attractive tax regime for research and development, the establishment of a local UPC would arguably further boost the State’s profile as a location of choice for inward investment.  Moreover, access to a streamlined European patent protection system would likely act as a useful incentive for Irish businesses to expand exports to a greater number of countries previously out of reach because of the costs of securing multi-jurisdictional patent protection.  3. Impact on the domestic economy  Estimates provided to the Joint Oireachtas Committee on Enterprise, Trade and Employment indicate that the establishment of a local division of the UPC in Ireland would contribute at least €415 million, or 0.13 percent in GDP growth, per annum by way of increased patent development activity.  Consequently, the establishment of the UPC can also be expected to generate increased expenditure and employment in legal, professional and other related technical advisory services.  Whether the referendum will be carried  will, however, ultimately depend on the Government’s ability to engage the public on the merits of adopting a streamlined patent court – a difficult task on such a niche subject.  Stephen Lowry is Public Policy Manager with Chartered Accountants Ireland

By realising the full potential of consistent networking, accountants can achieve personal and professional growth. Jean Evans explains why Consistency matters when you start networking. Working out what networks provide a consistent platform with which to engage is a crucial part of the magic sauce to leveraging and getting strategic with your networking efforts. Consistency is crucial for successful networking for several reasons: 1. Consistency builds trust Consistency helps establish trust and reliability among your network connections. When you consistently show up, deliver on promises, and maintain a certain level of professionalism, others are more likely to trust you and be willing to engage with you further. 2. Consistency keeps you relevant Regular interaction with your network helps you stay top-of-mind. If people consistently see your updates, contributions, or engagement within the network, they are more likely to think of you when opportunities arise. 3. Consistency demonstrates commitment Consistency demonstrates your commitment to your network connections, that you value the relationship and are willing to invest time and effort into maintaining it. This can lead to stronger and more meaningful connections over time. 4. Consistency builds credibility Consistency in networking activities, such as attending events, sharing valuable insights, or offering assistance, helps to build credibility. When others consistently see your expertise and willingness to help, they are more likely to view you as a credible and knowledgeable resource in your field. 5. Consistency expands opportunities Consistently engaging with your network expands your opportunities for new connections, collaborations, and career advancements. Regularly networking and nurturing relationships increase the likelihood of coming across new opportunities and being referred for relevant ones. 6. Consistency creates reciprocity Consistent networking efforts often lead to a culture of reciprocity within your network. When you consistently support and provide value to others, they are more likely to reciprocate by offering their support, advice, or opportunities when needed. 7. Consistency makes you adaptable Networking is not just about what you can get from others but also about what you can offer. Consistently engaging with your network allows you to adapt to changes in your industry or profession and remain relevant. It also opens opportunities for learning from others and gaining new perspectives. Reap the benefits Overall, networking consistency helps foster strong relationships, build credibility, and create opportunities for personal and professional growth. You can reap the benefits of a strong and supportive professional community by consistently investing time and effort into nurturing your network connections. Jean Evans is a Networking Architect and founder of NetworkMe

After a decade of little change, the tax regime for research and development in the UK has undergone a ‘credit style’ revamp, writes Liam McHenry  New research and development (R&D) rules for businesses in the UK with an accounting period beginning on or after 1 April 2024 have commenced. These entities are within the remit of the newly merged, research and development expenditure credit (REDC) expenditure scheme – with the exception of “highly R&D-intensive companies”. Companies with over 30 percent of their yearly expenditure qualifying for R&D tax relief can still claim under a restricted version of the SME scheme. Given this high bar, however, it is likely that only small technology start-ups will qualify.  For everyone else, the new rate will provide a benefit worth about 15p per £1 of qualifying expenditure, so not all is lost for those exiting the SME scheme, as a generous tax incentive remains for potential claimants. Reduced complexity? The stated aim of the merged scheme is to reduce complexity for claimants and their advisors. With two schemes remaining post-merger, however, the new scheme is actually more complex than its predecessor.  Subcontracted expenditure had previously been excluded under the RDEC scheme in any meaningful way. Under the new merged scheme, a new system has been put in place with the aim of rewarding whichever party decides to undertake the R&D activity. This adds a new dimension to determining the eligibility of qualifying R&D expenditure insofar as a subcontractor will now need to determine whether they believe their customer knew in advance that a project would require R&D activity. The theory is that this approach will remove the potential for both parties to claim on the same project, but it is easy to see how ambiguity might arise. When agreeing the terms of contracts with customers, claimants must pay additional attention to any clauses relating to intellectual property (IP) generation and whether they indicate that R&D will be required. Taking care at this stage could help claimants identify and preserve their right to claim the corresponding tax relief. Overseas expenditure A restriction on overseas expenditure was also introduced on 1 April 2024. Unless there is a compelling reason why the expenditure could not reasonably have been incurred in the UK, it will not be eligible for inclusion in the claim. However, recognising the unique position of Northern Ireland and its significant integration with the neighbouring Republic of Ireland, claimants can bypass this new restriction. By doing so, they could gain up to a maximum additional benefit of £250,000 every three years. This may require some additional administration, but it is still a welcome reprieve from the restriction, which would have been costly. Increased scrutiny This article offers a summary of the main rule changes coming into effect this month. In reality, there are more of which claimants should be aware. His Majesty's Revenue & Customs (HMRC) has dramatically increased its compliance efforts, with recent revelations from the Public Affairs Committee indicating that upwards of 20 percent of new R&D claims are now under scrutiny. While this fact alone should not be a major concern, it is worth noting that this increased scrutiny often comes with an aggressive stance, beginning with the assumption that R&D claims should be disallowed. The experience of one claimant to another can dramatically vary depending on which caseworker is allocated to the enquiry. Regardless, opening an enquiry can be a prolonged process before a conclusion can be reached. In the event of an unsuccessful enquiry defence, HMRC will be obligated to consider whether any penalties should be levied, depending on whether they determine that the claim was prepared carelessly. In addition, depending on the level of disclosure provided in previous claims made in recent years, HMRC can (and is actively encouraged to) look into these previous claims beyond the normal enquiry window. Planning ahead The implementation of the new R&D tax rules marks a significant shift for businesses heavily reliant on R&D activities for growth and innovation. As businesses adapt to the new regime, strategic planning and collaboration with tax advisors will be essential in maximising the benefits. Liam McHenry is Director of Tax at Grant Thornton