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Sectors

Energy and Natural Resources


quotes Very experienced team led by solicitors who are specialists in their field. Legal 500, 2020

Volatile markets, new technologies, diverse sources of funding, a changing regulatory environment and the climate challenge; these are just some of the issues that our clients face in this sector.

We closely monitor legal and regulatory developments at an international and EU level, so as to anticipate potential changes and opportunities for our Energy and Natural Resources clients. Our lawyers spend a significant part of their time researching and analysing key developments.  We liaise closely with our counterparts within the Multilaw Energy and Natural Resources specialist practice group, in order to keep on top of relevant developments.

We see major changes in this sector, driven by:

  • The overriding imperative on the international community to respond to the threat of climate change
  • State aid and support for the renewables sector
  • Security of supply and interdependence for Energy and Natural Resources
  • Greater focus on public–private partnerships to deliver energy solutions to the market
  • EU climate and energy policy developments, carbon pricing and non-binding renewables targets
  • The SEM Market Design and future Feed-In Tariffs / supports for renewables, both in the domestic and export market
  • Innovations in interconnection, Offshore Grid and Electricity Storage
  • The impact of Unconventional Gas Exploration and Extraction on domestic and international gas markets
  • The opportunities presented by energy efficiency, retrofitting and green financing
  • Constraints imposed by planning and environmental assessment, to ensure sustainable development and resource efficiency
  • The need to source a domestic supply of conventional energy

Our clients in this sector include:

  • Sustainable Energy Authority of Ireland
  • Companies developing and investing in renewable energy, particularly onshore wind, offshore wind and biomass
  • Companies involved in exploration, production and storage of offshore oil and gas
  • Environmental Protection Agency, in the context of the Unconventional Gas Exploration and Extraction (UGEE/ Fracking) Research Programme
  • Oil distributors
  • Companies involved in the import and distribution of coal and related products
  • Government Departments, Local Authorities and Agencies involved in local energy projects
  • Energy Services Companies and Local Energy Supply Companies
  • Green investment funds and financial institutions
  • Companies involved in the forestry sector
  • Agencies with responsibility for the marine environment, fisheries and aquaculture
Array ( [0] => WP_Post Object ( [ID] => 18677 [post_author] => 9 [post_date] => 2020-12-21 12:33:33 [post_date_gmt] => 2020-12-21 12:33:33 [post_content] => As published in Renewable Energy Magazine, December 2020. Offshore wind will play a crucial role in Ireland meeting its climate targets and reaching 70 per cent renewable electricity by 2030. There are currently several challenges to be tackled to ensure the timely development of Irish offshore wind projects, one such challenge being the establishment of a policy framework for the delivery of offshore grid in line with the National Marine Planning Framework. To assist in determining the suitable grid delivery model to be adopted to facilitate the build-out of offshore wind in Ireland, the Department of Communications, Climate Action and Environment (DCCAE) published a Consultation to Inform a Grid Development Policy for Offshore Wind in Ireland in June 2020. The consultation paper, and the accompanying report prepared by Navigant, outlined four example grid delivery models, spanning from a fully developer-led (centralised) model to a fully plan-led (decentralised) model. These models drew on grid development approaches adopted in other jurisdictions but were tailored to the Irish context. The ultimate grid delivery model selected in Ireland may not necessarily be one of these models, but rather may comprise of elements of these models. Under the first option, the fully developer-led grid delivery model which is applied in Britain, the developer is responsible for the prerequisites to the development: consents, site selection and pre-development of the wind farm site, and upon the project’s success in the auction, the construction of the wind farm and the offshore wind farm transmission assets. Any onshore grid reinforcements are undertaken by EirGrid and ESB Networks in a reactive manner to the auction results. The second option considers an approach whereby the State defines the minimum distance to shore for the wind farm. EirGrid proactively plans and coordinates the onshore grid reinforcements and for each RESS auction, identifies the locations, capacities and timelines for the onshore connection points. The developer remains responsible for site selection and pre-development, and the consenting and construction of the offshore wind farm and transmission assets. The last two options shift responsibilities from the developer to a state body such as, or in conjunction with, EirGrid or ESB Networks. A single state body for offshore renewable energy (ORE) developments will manage the planning and the site pre-development processes. In the third model, the developer wins an auction for a pre-developed site and is then responsible for the construction, financing, operation and maintenance of both the wind farm and the offshore transmission assets. The fourth model adopts a fully plan-led approach, an approach which has been adopted in the Netherlands, with more responsibility being placed on EirGrid and ESB Networks. In addition to site pre-development, the construction, ownership, operation and maintenance of the offshore wind transmission assets are centrally planned by EirGrid and ESB Networks. Unlike the other three options where the offshore wind transmission assets are owned and operated by the developer who manages and bears the risk of outages, under this option, the developer bears the responsibility and risk of outage for a defined period, although the transmission assets are owned by ESB Networks and are operated by EirGrid. The consultation paper summarised the analysis previously carried out on the advantages and disadvantages of each model and sought responses to specific questions in relation to the options and the seven key drivers identified as impacting on the choice of model. These drivers were not weighted but many in the industry believe that the most important driver is facilitating the timely development of offshore wind capacity to achieve the 2030 targets. They argue that this will only be possible if a developer-led model is adopted, being more compatible with existing legislative and policy framework. Others believe that in the long-term, the plan-led model will facilitate more onshore-offshore transmission coordination with the potential result of less infrastructure being required. These responses will hopefully assist and inform the Government in its selection of a robust offshore grid development policy which will ultimately contribute to Ireland becoming a powerhouse for offshore wind farm development. For further information in relation to the above article, please contact Siobhan McCabe. [post_title] => Offshore grid development: Who will lead the way? [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => offshore-grid-development-who-will-lead-the-way [to_ping] => [pinged] => [post_modified] => 2020-12-21 12:34:20 [post_modified_gmt] => 2020-12-21 12:34:20 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.philiplee.ie/?p=18677 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) )

As published in Renewable Energy Magazine,...

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Array ( [0] => WP_Post Object ( [ID] => 18660 [post_author] => 9 [post_date] => 2020-12-18 00:42:25 [post_date_gmt] => 2020-12-18 00:42:25 [post_content] => As published in Renewable Energy Magazine, December 2020. The pre-legislative scrutiny process for the proposed Marine Planning and Development Management Bill commenced at the end of November 2020, at the same time that a revised FAQ document (version 2) was published by the Department. The publication of the Bill itself is not expected until January or February 2021. The FAQ document flags a few key changes to the General Scheme approved by Government in December 2019. Firstly, the Bill is expected to focus on offshore renewable energy projects, energy interconnectors, cables and pipelines, and subsea telecommunications cables. Other sectors and activities are expected to be incorporated at a later stage. Secondly, it is anticipated that a more streamlined approach will be taken, with a two-stage as opposed to the three-stage process identified in the General Scheme. Prospective developers will apply for a planning interest in the marine area and a draft marine area consent (equivalent, in some ways, to a foreshore lease or foreshore licence). The prospective developer would then apply for development consent. It is only on the grant of a development consent that a marine area consent would be executed as between the developer and the State. Important details, such as assessment criteria and conditions, are intended to be set out in schedules to the Act. Thirdly, a body with powers to ensure compliance with development and marine area consents must be established, with the power to initiate enforcement action if necessary. The current goal is that the new MPDM legislation will be enacted by March 2021. This is an ambitious target for new legislation required to deliver complex projects against a backdrop of new planning and environmental judgments delivered by the Irish and European Courts with increasing frequency and complexity. It is hoped that the pre-legislative scrutiny and subsequent legislative processes on the Bill will facilitate engagement by those with specialist engineering, legal, environmental, and commercial knowledge of what is required for a robust consenting regime. The General Scheme anticipated a single development consent application procedure, to avoid unnecessary duplication of decision-making procedures that exists today. This makes great sense in relation to relatively homogenous project types, such as interconnectors, cables, and pipelines.  Offshore renewable energy projects involve very different infrastructural elements in the marine and terrestrial environments, with connection to the grid solutions not always clarified until a late stage in the project development. The MPDM Bill needs to facilitate both a single application approach and a phased application approach, subject to ensuring holistic over-arching environmental impact and appropriate assessment under EU Directives. The General Scheme anticipated the extension of the consenting area to include the entire Exclusive Economic Zone (EEZ) which extends out to the 200nm limits in certain locations. The scope of the Foreshore Acts currently only covers the area out to the 12nm limit. The legislative scheme needs to facilitate investigation of and applications for suitable areas beyond the 12nm limit, in order to encourage a pipeline of potential projects to meet Ireland’s potential in the medium to longer term. The General Scheme needs to facilitate a streamlined development consent process which recognises also the importance of consultation with interested parties, including the environmental NGO sector and the public concerned. The legislation needs to give the decision-maker clear, robust, and unambiguous powers. The Courts have increasingly signalled a willingness to engage in detail in the substance of decision-making, highlighting in numerous cases the difficulties that are created when legislation fails to clearly articulate what is required of the decision-maker, the applicant, and the public concerned. We have a unique opportunity to put in place a marine planning regime which learns from the experience of other countries with more mature sectoral experience and a robust approach to environmental conservation and sustainable development. This is particularly true when considering appropriate development guidelines, de minimis criteria for non-invasive site investigation, transparency and certainty around fees, and for ensuring that National Parks and Wildlife Service as well as the decision-making bodies are suitably resourced at appropriate levels.   For further information in relation to the above article, please contact Alice Whittaker. [post_title] => Marine planning legislation: Bill to be published in the new year [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => marine-planning-legislation-bill-to-be-published-in-the-new-year [to_ping] => [pinged] => [post_modified] => 2020-12-18 00:42:25 [post_modified_gmt] => 2020-12-18 00:42:25 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.philiplee.ie/?p=18660 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) )

As published in Renewable Energy Magazine, December 2020. The pre-legislative...

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Array ( [0] => WP_Post Object ( [ID] => 10919 [post_author] => 9 [post_date] => 2020-04-29 08:53:15 [post_date_gmt] => 2020-04-29 08:53:15 [post_content] => At last, the first competition to be held under the Renewable Energy Support Scheme (RESS) is underway, with the closing date for the submission of the application to qualify for such competition being later this week, 30 April 2020. This scheme, which will be structured as a two-way floating feed in premium, will provide support to renewable electricity projects. The detailed terms and conditions that apply to the first auction, and to the ongoing administration of the awards made in the RESS 1 Auction, were published earlier this year. The RESS 1 process was not unaffected by the current COVID-19 pandemic, with the need for the original closing date for submission of the application for qualification to be extended by four weeks, from 2 April 2020 to 30 April 2020, and an entire revision of the RESS 1 Auction Timetable. EirGrid published an updated RESS 1 Auction Timetable on 24 April 2020 available here. In addition to submitting the application for qualification this week, the bid bond in the amount of €2,000 per MW of the offer quantity must also be posted by 30 April 2020. Where an applicant seeks to withdraw its project from the RESS 1 Auction after submitting its application for qualification, a notice of withdrawal must be submitted to EirGrid by 19 June 2020 or the applicant will lose its bid bond. The provisional date for announcing the qualified applicants has now been set as 9 June 2020, with the finalised qualification decision date being 10 July 2020. The revised timetable provides that the one-week Auction submission period will take place between 21 and 28 July 2020, during which time qualified applicants will be required to submit their offers, including the offer prices. Subject to no further changes or extensions being made to the RESS 1 Auction Timetable, the provisional results of the RESS 1 Auction will be available on 4 August 2020, followed by the finalised results a month later. All successful applicants will receive a notice of award from the Minister for Communications, Climate Action and Environment by 25 September 2020 advising them of their project’s success in the RESS 1 Auction. The date of this notice will trigger the time period within which the applicant must comply with its obligations to enter into the implementation agreement and provide the performance bond in order to secure a letter of offer for RESS 1 Support. For more information on the RESS 1 Auction and the RESS 1 Terms and Conditions, please contact Siobhan McCabe.       [post_title] => Ready Steady RESS 1 – Applications for Qualification to be submitted by 30 April and Revised Auction Timetable published [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => ready-steady-ress-1-applications-for-qualification-to-be-submitted-by-30-april-and-revised-auction-timetable-published [to_ping] => [pinged] => [post_modified] => 2020-04-29 09:12:47 [post_modified_gmt] => 2020-04-29 09:12:47 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.philiplee.ie/?p=10919 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) )

At last, the first competition to be held under the Renewable Energy...

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Array ( [0] => WP_Post Object ( [ID] => 10347 [post_author] => 9 [post_date] => 2020-01-08 16:09:01 [post_date_gmt] => 2020-01-08 16:09:01 [post_content] => Head of our Energy Team, Siobhan McCabe, was delighted to host a highly informative and engaging round table discussion with key energy-focussed stakeholders and Eolas Magazine on making corporate PPAs work for business. Read the full report here. (Taken from Eolas Magazine Jan/Feb 2020, issue 38). [post_title] => Philip Lee hosts Eolas Magazine round table discussion on making corporate PPAs work for business [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => philip-lee-hosts-round-table-discussion-with-key-energy-focussed-stakeholders-and-eolas-magazine-on-making-corporate-ppas-work-for-business [to_ping] => [pinged] => [post_modified] => 2020-01-20 16:50:54 [post_modified_gmt] => 2020-01-20 16:50:54 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.philiplee.ie/?p=10347 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) )

Head of our Energy Team, Siobhan McCabe, was delighted to host a...

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Array ( [0] => WP_Post Object ( [ID] => 9079 [post_author] => 4 [post_date] => 2019-05-16 09:18:05 [post_date_gmt] => 2019-05-16 09:18:05 [post_content] => The first stage of the selection process for the DS3 System Services Volume Capped competition is underway. This DS3 System Services competition aims to procure between 91MW and 140MW of Services under fixed contracts in accordance with the SEM Committee’s Decision on DS3 System Services Fixed Contracts Procurement Arrangements (SEM-18-049). This competition focuses on “high availability technologies” such as battery storage, flywheels and demand side units whose availability are not linked to energy market dispatch. It is expected that battery energy storage will secure most of the contracts awarded under the competition.   In this first stage (scheduled to complete shortly), candidates must meet the appropriate contractual and technical pre-requisites in order to then be selected to progress to the second stage and be invited to tender for the provision of the System Services. The winning bids will be ranked based on price.   In respect of the technical requirements, Providing Units will be required to provide a sub-set of DS3 System Services as well as Over-Frequency Response. Service Providers with non-firm connections will take the risk of network unavailability due to network limitations and will not be remunerated if unavailable in such circumstances. The maximum contracted volume per separate grid connection will be set at 50MW.   In advance of the second stage of the tender process, EirGrid published on the 15th of May 2019 a draft of the template contract to be awarded to the successful Service Providers. This draft contract takes into account the responses received by EirGrid to the Consultation on the DS3 System Services Volume Capped Fixed Contracts dated the 25th of October 2018.   Some of the noteworthy provisions contained in the draft contract include:
  • The maximum duration of the contract will be eight years which includes a build period of up to two years from contract execution (the “Target Go-Live Date”) plus a maximum of six years duration for the payment of the Services.
  • EirGrid will have a right to terminate the contract if the Providing Unit has not commenced providing the Services by the Target Go-Live Date.
  • Prior to entering into the contract, the Service Provider must have received a connection offer for the Providing Unit.
  • Payment will be contingent on compliance requirements being met.
  • No payments will be made where the Providing Unit is prevented from providing the Services by reason of Force Majeure or the Providing Unit is de-energised, decommissioned or disconnected pursuant to its connection agreement, interface agreement or use of system agreement or pursuant to the provisions of the contract.
  • A performance bond (or in certain circumstances an alternative form of collateral may be accepted) will be required to be provided by the Service Provider prior to entering into the contract as a means of incentivising service delivery by the Target Go-Live Date.
  • EirGrid may extend the deadlines for achievement of the performance milestones and the Target Go-Live Date where delays in service delivery have been caused by acts or omission of EirGrid itself or by Force Majeure.
  • EirGrid will be entitled to terminate the contract where there is a failure to make the Services available such that the Availability Performance Scalar value is 0 for three consecutive months.
  • Providing Units will be given a scheduled outage allowance of 1.4% per calendar year and will not be treated as unavailable for any scheduled outage where its outage rate is below this allowance. Any unused allowance can be carried over into the subsequent year.
  • Providing Units will not be permitted to simultaneously receive payments under both the Regulated Arrangements and the Volume Capped Arrangements for the provisions of the same sub-set of Services.
  The conclusion of the first stage of the selection process of the DS3 System Services Volume Capped competition is imminent with EirGrid shortlisting candidates who will be invited to tender for the contracts. We have advised on a number of investments and development opportunities in this area over the last few months, in particular for clients with experience in battery energy storage and the provision of System Services in other markets. Many energy market players are eagerly awaiting the outcome of this competition.   For more information on DS3, battery storage or any other aspects of the Irish energy market, please contact Siobhán McCabe, Partner and Head of Energy at Philip Lee.   Article written with the assistance of Harry O’Malley. [post_title] => Battery Storage and the DS3 System Services Volume Capped Fixed Contracts [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => battery-storage-and-the-ds3-system-services-volume-capped-fixed-contracts [to_ping] => [pinged] => [post_modified] => 2019-05-16 09:18:44 [post_modified_gmt] => 2019-05-16 09:18:44 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.philiplee.ie/?p=9079 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) )

The first stage of the selection process for the DS3 System Services...

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Array ( [0] => WP_Post Object ( [ID] => 7060 [post_author] => 4 [post_date] => 2018-04-17 07:41:11 [post_date_gmt] => 2018-04-17 07:41:11 [post_content] => As published in the Energy Ireland Yearbook, April 2018.   Corporate Power Purchase Agreements or “Corporate PPAs” are getting a great deal of attention in the energy sector, and rightly so. Though not a new concept, with the first Corporate PPAs being entered into around a decade ago, recently there has been a dramatic increase in the number and size of Corporate PPAs being entered into globally. In a nutshell, a Corporate PPA is a long-term contractual arrangement under which a corporate (rather than a utility/licensed electricity supplier) agrees to purchase electricity directly from a renewable energy generator at a fixed price. The green rights attributable to such power typically transfers to the corporate. According to a recent Bloomberg New Energy Finance Report, a record number of Corporate PPAs were entered into in 2017 (43 corporates in 10 different countries) amounting to 5.4GW of clean energy. Most of these deals were entered into in the United States, where Corporate PPAs are common. Momentum is gaining in the European markets and many expect a surge in Corporate PPAs over the next year or so. This rise in popularity of Corporate PPAs has not gone unnoticed in Ireland and at Philip Lee, we advised a large multinational on one of the first renewable energy Corporate PPAs in Ireland and continue to advise generators and corporates exploring similar opportunities.   Benefits of Corporate PPAs Corporate PPAs are attractive to both renewable energy generators and corporates for a variety of reasons. For the corporates, particularly large tech companies with high energy demand and climate change high on their corporate agenda, entering into Corporate PPAs provides an opportunity for them to commit to using renewable energy, thereby enabling them to meet their sustainability and carbon reduction targets. The appetite to ‘go green’ is growing, with many corporates setting ambitious targets for renewable energy sourcing (often 100%) or emissions reduction. A further driver for corporates is economics. Corporate PPAs allow corporates to lock in a fixed energy price, often at below-market prices, eliminating exposure to volatile energy prices. For generators, entering into Corporate PPAs guarantees a long-term (typically 10-15 years) revenue stream and unlocks the availability of funding required to build out projects. The growth in Corporate PPAs worldwide is, in part, attributable to the fact that many of the government subsidies for renewable energy are diminishing or coming to an end and Corporate PPAs can, in some instances, act as a viable alternative route to market. In Ireland, the REFIT support schemes are closed to new entrants and their successor, the new Renewable Electricity Support Scheme, which will be an auction based regime, is unlikely to be available until 2019. The uncertainty as to timing or extent of support available for projects, and in particular certain technologies, leaves generators with little prospect of securing funding for their projects. A Corporate PPA with a financially strong counterparty would provide financial certainty and enhance the bankability of a project, whether or not it receives a subsidy.   Key Risks to be Managed In considering entering into a Corporate PPA, both generators and corporates should be aware that there are a myriad of factors and risks to be addressed in the negotiations of the contract, for example: Counterparty Credit Risk – The creditworthiness of the counterparty is a key issue for generators and their funders and requires evaluation prior to entering into the contract. Energy Price Fluctuations - Given the long-term position taken on energy prices under a Corporate PPA, there is a risk that the Corporate PPA may not, during certain periods, offer the best price to the parties. This risk may be addressed in a number of ways in the Corporate PPA, such as including price floors and caps and collars. Market Change - As the energy market is continuously evolving, these contracts should include a mechanism to address market and regulatory change. Typically this mechanism limits a party’s ability to terminate the Corporate PPA and instead provides for the contract to be re-negotiated to reflect the market changes whilst preserving the commercial balance between the parties. The Integrated Single Electricity Market (“I-SEM”), scheduled to go-live on 23 May 2018, will impact on Corporate PPAs and in particular, parties will need to agree who will be responsible for trading the electricity in I-SEM and how balancing risk will be shared.   Structure of Corporate PPAs Corporate PPAs may take a number of different forms, ranging from physical transfer of power (sleeved) to a pure financial derivatives contract (synthetic). In Ireland, the most likely form will require the corporate to establish its own licensed supply company (similar to the ‘Supplier-Lite’ structure) and such affiliated supply company to then enter into the Corporate PPA with the generator. The corporate will also enter into an electricity supply contract with its affiliated supply company.   Conclusion The significant growth in Corporate PPAs is a welcome development for the renewable energy sector as a whole. Although the original pioneers of Corporate PPAs were the high energy demand tech companies, all types of corporates can enjoy the environmental and economic benefits emanating from Corporate PPAs. For generators, Corporate PPAs may offer an alternative route to market where subsidies are unavailable. The complexity of Corporate PPAs should not dissuade generators and corporates from exploring these possibilities, as experienced advisors will be able to assist in managing the risks. [post_title] => The rise of the Corporate PPA [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => the-rise-of-the-corporate-ppa [to_ping] => [pinged] => [post_modified] => 2018-04-17 07:51:49 [post_modified_gmt] => 2018-04-17 07:51:49 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.philiplee.ie/?p=7060 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) )

As published in the Energy Ireland Yearbook, April 2018.   Corporate Power Purchase Agreements...

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Siobhan McCabe
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Philip Lee
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Alice Whittaker
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Eoghan Doyle
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Rachel Minch
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