Energy
KEY DEVELOPMENTS
Long Duration Energy Storage
EirGrid is consulting until 24 November 2025 on a procurement mechanism for Long Duration Energy Storage (“LDES”) of continuous electricity import and export capability of at least four hours. We look at the proposal in our insights post Energy update: Long Duration Energy Storage.
Non-price criteria in renewable energy auctions
The Department of Climate, Energy and the Environment is consulting until 21 November 2025 on implementation of Article 26 of the Net-Zero Industry Regulation (EU) 2024/1735. We look at the proposal in our insights post Renewable energy auctions: Consultation on non-price criteria.
RESS 5
Final auction results are available. Auction weighted average prices were €100.60/MWh for solar and €96.56/MWh for wind. Successful deemed energy quantities are 822.32 GWh of solar and 670.96 GWh of wind.
Connection
EirGrid published Getting Connected - Delivery Phase of Onshore Contestable Projects. EirGrid states it is intended to be a functional, customer-oriented guideline to assist in the process of becoming a generator or demand customer with EirGrid.
Biomethane
The Government published a Biomethane Environmental Sustainability Charter is intended to support anaerobic digestion plants to meet environmental and industry standards, including though Renewable Energy Directive compliance. Our briefing on developing biomethane production facilities is available here: Biomethane: Guide to project development in Ireland.
District heating and cooling
The EIB announced technical and financial advisory support to develop district heating systems in Ireland. The Government’s General Scheme for legislation is available here: General Scheme of Heat (Networks and Misc Provisions) Bill 2024.
Carbon capture use and storage
The European Commission is consulting until 9 January 2026 on a legislative initiative on CO2 transportation infrastructure and markets and is also gathering evidence, information, and feedback on the current regulatory framework affecting the carbon value chain (Directive 2009/31).
CBAM
The Regulation to simplify the Carbon Border Adjustment Mechanism is now in force. Our overview of the amending legislation is available here: Carbon Border Adjustment Mechanism. Our update on implementing regulations is available here: CBAM - Consultation on Implementing Regulations.
The Financial Times reported that the European Commission’s international carbon pricing task force has collaborated with more than 40 countries in the past year. It notes carbon pricing now covers 28% of global emissions, according to the World Bank’s 2025 carbon report, with 80 countries having introduced a carbon market or emissions trading scheme. At COP30, the EU endorsed a Declaration on the Open Coalition on Compliance Carbon Markets to boost recognition of carbon pricing and market mechanisms as tools to advance climate action.
The EU’s negotiating mandate for COP 30 is available via this page: EU aims to advance global clean transition and implementation of the Paris Agreement at UN's COP30. The new EU Nationally Determined Contribution is to reduce net GHG emissions by 66.25–72.5% below 1990 levels by 2035.
Simplification
At the October European Council leaders reaffirmed the need to continue with simplification of EU rules including in relation to energy. The leaders called on the Commission to explore new proposals for planning and permitting procedures.
EU DEVELOPMENTS
Tripartite contracts
The EU is promoting tripartite contracts, as mentioned in the Affordable Energy Action Plan, whereby contracts between energy producers and energy-consuming industries would also involve the public sector to provide regulatory certainty and incentives. The first of two such arrangements is outlined here: Commissioner Jørgensen announces first 2 sectorial tripartite contracts.
Following on from the Affordable Energy Action Plan, the European Commission has set out seven actions to bring down energy prices. They include making full use of the enhanced State aid framework, speeding up permitting for renewable energy projects, and improving interconnection. The Commission has also provided guidance to Member States on implementing the Social Climate Fund and fulfilling Social Climate Plans.
Electricity
- New Trading Periods: The EU’s day-ahead electricity market has moved from hourly to 15-minute trading intervals.
- Bidding Zones: ACER will decide by 5 January 2026 on a proposal from ENTSO-E to amend the methodology for the regional procurement of balancing capacity to update reliability parameters used by regional coordination centres to assess availability of cross-zonal capacity and voluntary balancing bids.
- Grid Forming Requirements: ENTSO-E published a technical report on grid forming requirements, which provides guidance on requirements under the draft Network Code on Requirements for Generators and will serve as a basis for the future Implementation Guidance Document on Grid Forming capability.
- PCIs and PMIs: ACER published its Opinion on the draft lists of proposed projects of common interest and projects of mutual interest for 2025. Its findings include that infrastructure needs have been identified only per Member State, without sufficient identification of capacity needs per border, and that there is an unclear distinction between monetised and non-monetised benefits in the ranking of projects.
- Risk Preparedness: The Risk Preparedness Regulation (EU) 2019/941 aims to ensure that Member States are equipped with appropriate tools to prevent, prepare for, and manage electricity crisis situations in a spirit of solidarity and transparency. The Commission has reviewed its application. While it has enabled the EU to make relevant progress in its security of electricity supply, a revision of the existing framework appears essential to ensure it is fit for purpose to address new challenges.
Gas
- EU DSO: ACER is consulting until 19 December 2025 on updated draft statutory documents to allow the DSO entity to take into account membership of hydrogen distribution system operators.
- Hydrogen: A call has been launched to interested stakeholders to submit new project information for an update of the joint Hydrogen Infrastructure Map.
- Imports Ban: A proposed Regulation aims to phase out Russian gas and oil imports beginning from 1 January 2026, with a full ban from 1 January 2028. EU Ministers’ position is available here and the position of Parliament Committees on International Trade and on Industry and Research and Energy is available here. The Parliament and Council will now negotiate a final position.
- Joint Modelling: ENTSOE-E and ENTSOG published a joint Interlinked Modelling Report, which was also undertaken in close coordination with the European Network of Network Operators for Hydrogen.
- TYNDP: ENTSOG published its draft TYNDP 2024 for submission to ACER.
- Wholesale Markets: ACER outlined key developments in European gas wholesale markets in Q3 2025. Wholesale prices and market volatility declined. Gas imports increased and pipeline gas from Russia declined.
Cross-Border Renewable Energy Projects (“CB RES”)
Five projects have been given CB RES status, making them eligible for financial support for studies and works under the CEF Energy Programme. 13 projects now have CB RES status.
Funding for net zero projects
The European Commission announced funding of €2.9 billion to 61 net zero technology projects, listed here. The next Innovation Fund calls will take place in early December 2025. The Commission also published terms and conditions for a first European-wide auction for decarbonising industrial process heat, expected to open in early December 2025.
Strategic projects
The Commission published Implementing Regulation (EU) 2025/2194 establishing a single template to be used by project promoters to apply for recognition of a critical raw material project as a Strategic Project under the Critical Raw Materials Regulation (EU) 2024/1252.
Modular reactors and fusion energy
The European Commission opened a call for evidence until 4 December 2025 on the future development and deployment of small modular reactors in Europe. The Council also approved accession by Euratom to the Framework Agreement for international collaboration on research and development of Generation IV Nuclear Energy Systems. The European Parliament has also published an analysis of developments in fusion energy.
Measuring instruments
Directive 2014/32/EU on the harmonisation of the laws relating to making available on the market measuring instruments is being modernised to cover devices such as electric vehicle charging equipment, compressed gas dispensers and meters for electricity, gas and thermal energy. The updates also aim to address the growing role of digitalisation in smart metering and facilitate the use of emerging gases like hydrogen. The Council has agreed its position on the proposed amendments. Once the Parliament has adopted its position a final text will be negotiated.
REMIT
The Spanish regulator imposed a €1 million fine for attempts to manipulate the national organised gas market eight times from April to May 2023. A 40% reduction was applied in light of an early voluntary payment. An overview of decisions and sanctions is available here: Enforcement decisions.
EU priority areas 2026
The Commission announced that energy will remain a priority under its 2026 work programme, which includes a commitment to ensure a genuine Energy Union by improving governance, upgrading grids, removing bottlenecks, cutting red tape for cross-border projects, boosting electrification and the resilience of the system, improving deployment of infrastructure for electric charging and supply of sustainable alternative fuels, and developing a strategy for fusion power plants.
Climate Law
EU Ministers agreed amendments to Regulation (EU) 2021/1119 to set a binding target for the EU to reduce net GHG emissions by 90% by 2040 compared to 1990 levels.
The European Commission published the EU Climate Action Progress Report 2025 along with a Q&A document. It notes that in 2023 the EU achieved 24.6% renewable energy in gross final energy consumption, with progress varying widely across the EU from Sweden at 66% of renewables in their energy mix, to Luxembourg, Belgium, Malta, and Ireland at under 16%.
The Commission also published a Staff Working document on its assessment of progress towards the objectives of the Energy Union and Climate Action. Conclusions include that bioenergy plays an important role in the EU’s renewable energy (with solid biomass the main source). The Commission intends to closely monitor the implementation in Member States of the Renewable Energy Directive.
International strategy
A Communication of the European Commission and High Representative of the Union for Foreign Affairs and Security Policy sets out an international strategy for securing Europe’s place in global markets and accelerating the clean transition. Ten key actions are set out including supporting EU clean tech businesses in boosting international opportunities.
CASE LAW
ACER decision upheld
In appeal cases C281/23 P and C282/23 P, TSOs in Poland, France, Sweden and the Netherlands sought annulment of ACER decisions. The ACER decisions rejected proposals by the TSOs around implementation frameworks for the exchange of balancing energy (platforms for the exchange of energy from frequency restoration reserves with automatic activation (the aFRR platform) and with manual activation (the mFRR platform)) and set out an amended version of the TSOs’ proposals. ACER considered that all TSOs had to appoint one entity, whether a single TSO or a company owned by TSOs, to operate certain functions of the mFRR and aFRR platforms.
The CJEU dismissed the TSOs’ appeals. It agreed with an interpretation of Regulation 2017/2195 establishing a guideline on electricity balancing that the function allowing for the continuous calculation and updating of the available cross-zonal transmission capacity is a required function of the mFRR and aFRR platforms under the Regulation. It had to be performed by the platform operator, not the TSOs directly.
ACER decision annulled
In Cases T600/23 and T612/23, brought by Germany and its national energy regulator, the General Court annulled a decision of the ACER. The dispute arose under Regulation (EU) 2015/1222 on capacity allocation and congestion management, which requires TSOs to propose methodologies for calculating cross-border electricity capacity. Where national regulators fail to agree on a common methodology, ACER is empowered to adopt a binding decision. The ACER decision concerned the inclusion of internal network elements in capacity calculations. ACER said that certain network elements within a country should only be treated as “critical” and included in the capacity calculation process if the following was done: (i) an economic efficiency analysis of including the internal elements, and (ii) an impact assessment of raising the threshold for including internal elements. The Court held that ACER exceeded its powers in introducing these considerations.
Natural gas tariffs
The Latvian Court in its judgement C-87/24 requested preliminary rulings in a challenge to the regulator’s decision on natural gas system tariffs. The questions were based on the previous iterations of the Gas Regulation and Directive.
Regulation 13(1) of the previous iteration of the Regulation set out the principles governing tariffs or the methodologies used to calculate them, which includes that they take into account the need for system integrity and its improvement and reflect the actual costs incurred, whilst including an appropriate return on investments. Article 41(8) of the previous iteration of the Directive required that, in fixing or approving tariffs or methodologies, regulators ensure that system operators are granted appropriate incentive, over both the short and long term, to increase efficiencies, foster market integration and security of supply and support the related research activities. Article 41(16) required that decisions by regulators be fully reasoned and justified.
The CJEU provided preliminary rulings which included that:
- the tariff principles do not apply to natural gas storage facilities (though they can be extended to those facilities for objectively justified reasons),
- national legislation may not provide that an ‘appropriate incentive’ is ensured only by the fact that tariff payments cover the economically substantiated costs of utilities and ensure a profit, without any obligation on the regulator to set out how it has decided there is an ‘appropriate incentive’,
- the obligation to provide an ‘appropriate incentive’ and an ‘appropriate return on investments’ does not require recourse only to specific methods of calculation,
- when determining ‘appropriate incentive’, regulators take into account past performance of system operators,
- if operators challenge tariff parameters, the regulator’s assessment cannot be overridden by a third-party report commissioned solely by one operator.
Harmonised gas transmission tariffs
The Hungarian Court in C-369/24 requested a preliminary ruling on the interpretation of Article 35(1) of Commission Regulation (EU) 2017/460 establishing a network code on harmonised transmission tariff structures for gas. Article 35(1) states that the Regulation does not affect the levels of transmission tariffs resulting from contracts or capacity bookings concluded before 6 April 2017 where they foresee no change in the levels of the capacity- and/or commodity-based transmission tariffs except for indexation. The CJEU ruled that the exception does not apply to contracts where changes in tariff levels result from other factors, including where the contracting parties so agree or where an official tariff applies.
FURTHER DOMESTIC DEVELOPMENTS
Grid development
The Electricity (Supply) (Amendment) Bill 2025 completed the stages of the legislative process in Dáil Éireann. It is intended to provide a mechanism for Government to invest €1.5 billion in ESB Networks to support development of the grid over the next five years. It is also intended to provide for an increase in ESB’s statutory borrowing limit from €12 to €17 billion.
EirGrid is consulting until 25 November 2025 on proposed work to strengthen the grid in an area of the North West. EirGrid also consulted until 13 November 2025 on its draft 2026 Stakeholder Engagement Plan.
2025/26 Winter Outlook
EirGrid’s Winter Outlook finds that the system will operate within the level of risk set by the Department of Climate, Energy and the Environment. It may enter the Alert State, most likely at periods of low wind and low interconnector imports. There is a low probability of the system entering the Emergency State.
FURTHER CRU BUSINESS
ORESS 1
The CRU introduced a Material Change Review process to assess whether changes made by EirGrid to the Phase 1 general and functional specifications were technically necessary, economic and efficient, as well as how resulting costs should be treated. The CRU states that aspects of the general and functional specifications have yet to be fully finalised by EirGrid and resolution is required on an accelerated basis (by 28 February 2026) with due consideration being given to the principles around Phase 1 Projects being developer-led.
Electricity networks incentives
The CRU set out its assessment of the network companies’ performance against the PR5 Incentive and Reporting framework in 2024. It allowed a net penalty of €7.03m for ESBN as DSO, and a net incentive reward of €2.43m for EirGrid as TSO, as well as an incentive reward of €6m for ESBN in its role as transmission asset owner. As regards the TSO, the CRU found its overall performance in 2024 improved compared to 2023. However, it has continued to underperform against targets for incentives that support the integration of renewable energy on the electricity network, including RES-E, Renewables Dispatch Down, and System Non-Synchronous Penetration.
Compliance reporting
The CRU issued statements on compliance reporting it received from licence holders in this 2023-4 report.
PSO
The Public Service Obligation Levy 2025/26 will be reduced as compared to the original decision. The reduction is mainly due to an error having been identified in the calculations of the 2022/23 R-Factor.
Financial penalties
The CRU is consulting until 27 November 2025 on its updated approach to setting financial penalties it may impose on licence holders.
SEMC BUSINESS
Capacity market code modifications
Modifications have been proposed to:
- provide scope to determine whether a project that is delayed in energising and receives an extension to its Capacity Quantity End Date and Time should see an adjustment to its capacity payments to share the NPV erosion caused by the delay between the project and end consumers,
- introduce changes necessary to support the transition to online Secondary Trading,
- ensure timely disclosure of the rationale underpinning decisions to grant extensions and terminations of Capacity Market agreements.
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