#WWW.THELAWYER.COM
28 SPECIAL REPORT
IRELAND
Tom Phillips, special reports editor
It enjoyed an economic boom in the 1990s that
was the envy of its neighbours. Now much of the
growth in Ireland may have dried up in the midst
of a looming recession, but lawyers lucky (or
bright) enough to work in two increasingly
important markets are still smiling.
The alternative energy market is surprising
Watt gives?
Almost a year on from
the launch of the single
electricity market,
Ireland’s potential in
the wind power sector
means firms that have
built up their energy
practices are positioned
to reap the rewards.
By Kelly Parsons
many and Ireland’s energy lawyers find themselves
in a whirlpool of activity. Elsewhere, billions of
euros are also pouring into infrastructure projects
– a tidy hangover from the boom years that makes
the National Development Plan, or NDP, the most
popular acronym among lawyers in the country
(with PPP not far behind).
With the anniversary of
the introduction of
the single electricity
market (SEM) app -
roaching, energy at
the forefront of EU policymaking and the
combined value of a handful of deals this
year already exceeding €5bn (£3.98bn),
Ireland’s energy lawyers are enjoying a
remarkably healthy climate.
Michael O’Connor, partner and head of
the energy team at Matheson Ormsby
Prentice, who advised the regulators on both
sides of the border on the legislative,
licensing and transition aspects of the SEM,
says the introduction of the SEM has had a
significant impact on renewable energy
projects.
While the Irish energy sector may be
small, it has nevertheless become a real
earner for otherwise languishing law firm
departments. The highly specialised nature
of the industry has seen a handful of Irish
firms – including Arthur Cox, A&L
Goodbody, Matheson Ormsby Prentice,
William Fry, McCann FitzGerald,
O’Donnell Sweeney Eversheds, LK Shields
and Beauchamps – slowly build up a solid
reputation for energy expertise since the
liberalisation of the market, reaping
considerable rewards.
“Because the energy sector
is so complex there’s a high
barrier to entry for legal
advice,” says Mark
Varian, a partner
at O’Donnell
Sweeney Eversheds,
a firm
with considerable
expertise in
the wind farm
arena, and currently
advising
Oriel on its
300MW-plus
offshore wind
farm. “As a firm
we’ve found it a very
lucrative market.”
Given market conditions,
M&A and financing
activity remain surprisingly
strong in the energy sector. One
partner we spoke to believes that every
piece of €1bn-plus (£789m) acquisition
work undertaken in Ireland this year will be
energy-related.
Another commented that he had never
started a year with a known pipeline of work
like this one, predicting that his firm alone
would advise on upward of €5bn (£3.98bn)
in M&A work, and €2bn (£1.59bn) in
financing. These are extraordinary numbers,
both for a jurisdiction the size of Ireland
and in terms of anything that has gone
before in the energy sector.
Ireland’s market for wind
energy is small, but we
probably have the best
seascape and landmass for
production in Europe
Philip Daly, LK Shields
Much of the boom concerns renewable
energy, specifically wind. LK Shields partner
Philip Daly, whose relatively young practice
has worked for clients including Some
Wind, Dalkia and BioPower Group, says:
“Ireland’s market for wind energy is small,
but we probably have the best seascape and
landmass for production in Europe.”
Alongside good wind resources and
plentiful sites, there is also political will
behind the sector, as demonstrated by the
appointment of green party member Eamon
Ryan as minister for communications,
energy and natural resources.
What is more, renewable energy is viewed
as one of the few remaining ‘safe harbours’
by investors and bankers. Investment has
traditionally come from small to mediumsized
developers, but the market is rapidly
consolidating.
“Bigger companies are now looking to
get into the market,” says Varian. “We’re
faced with the unusual situation that four
large government-owned energy bodies
have all declared a strong interest in wind
farms and are now competing against each
other in the same market.”
“There’s a lot of interest from private
investors in this type of technology,” agrees
Patricia Lawless, energy group head at
McCann FitzGerald. “The success of the
Airtricity deal led to far greater demand
than we would otherwise have expected to
see. Our impression is that demand for
The first of these Ireland Special Reports looks
at how the geography and expertise in alternative
energy has made Ireland a forerunner in the
market. The second report examines how
government projects, including the Dublin Metro
and National Concert Hall, means a thick
workbook for infrastructure lawyers.
investment opportunities exceeds the actual
projects available.”
McCann clients include Airtricity, the Irish
state energy company Bord Gáis Éireann,
which it advises on an ongoing basis, and
national grid operator EirGrid, most recently
in connection with the SEM development.
The sale of wind farm operator Airtricity
to Scottish and Southern Energy (SSE) for
around €1.9bn (£1.51bn) completed on 4
January this year and certainly shook up
the market. Arthur Cox acted for the vendor,
and A&L Goodbody for SSE. The deal was
followed by the Electricity Supply Board of
Ireland’s reported €450m (£357.87m) sale
to Endesa. Michael O’Connor and Peter
O’Brien of Matheson Ormsby Prentice led a
20-lawyer multidiscipline team advising
Endesa, the successful bidder.
More recently, market speculation is rife
that Viridian’s €2bn (£1.59bn) generation
and supply assets – which include a significant
wind business – are up for sale. Six
months ago Viridian acquired a company
called Eco Wind Power for a reported price
of €50m (£39.76m).
The 500MW East West Interconnector
linking the electricity grids in Ireland and
Wales is another significant energy project
with implications for the renewable
industry. The only way for Ireland to realise
its full renewable energy potential – which
is far greater that the country itself needs –
is to develop connections into Europe, so
investment in interconnection is absolutely
critical. Bids are in and contractors on the
East West project, which has a value of
€600m (£477.16m), should be selected
by the end of the year. CMS Cameron
McKenna and PricewaterhouseCoopers in
consortium are advising EirGrid on the
procurement, with Arthur Cox and Deloitte
advising on the funding.
Arthur Cox’s head of projects and energy
specialist, Alex McLean, is particularly
proud that his team is advising in its own
right on what is a landmark project for
Ireland. “This project is the first of its kind in
Ireland and is an extremely significant
appointment for a local law firm” he says.
One of the most significant catalysts
behind the renewable energy bonanza is
the European Union target of 20 per cent of
energy from renewable sources by 2020.
With the EU eager to be seen to be setting
continued #
THE LAWYER
6 OCTOBER 2008
To view a Ceros magazine you need to have JavaScript enabled in your browser and have the flash player 8 or higher installed. To install the latest flash player, click the icon above, install the flash plugin and then click here to refresh this page.