Energy

KEY DEVELOPMENTS

Renewable Auctions: Non-price Criteria

Under the EU Net Zero Industry Act, renewable energy auction design will be required to include: (i) pre-qualification criteria on responsible business conduct, cybersecurity and data security, and the ability to deliver projects fully and on time, and (ii) pre-qualification or award criteria to assess the auction’s sustainability and resilience contribution. The Commission is consulting until 20 February 2025 on instruments to set out more detailed rules for setting non-price criteria:

Redispatch

Under the IME Regulation, if a Member State is not yet equipped for market-based redispatch, certain operators of generation, storage or demand response are entitled to be kept financially indifferent to being dispatched down. This entitlement was vindicated by the High Court of Ireland in 2023 (2023 High Court judgment) and in 2024 (2024 High Court judgment). These judgments are the subject of appeal proceedings taken by the regulatory authority. The Supreme Court has now referred several questions to the CJEU in a judgment, requesting the CJEU to give the reference as much priority as possible (2025 Supreme Court judgment).

Programme for Government

Commitments in the Programme for Government include:

developing a comprehensive plan to accelerate energy generation, connectivity, and planning processes,
ensuring necessary investment in the electricity transmission and distribution systems,
accelerating the roll-out of new electricity interconnectors,
prioritising review and reform of the legislation underpinning the CRU,
holding at least one RESS auction per year,
prioritising the publication of Wind Energy Development guidelines,
prioritising publications of DMAPs,
ensuring managed development of renewable energy through the development of national planning guidelines,
ensuring a policy to streamline repowering and life extension of existing onshore wind farms,
developing data centre policy,
expediting the publication of a Private Wires Policy Framework, and
launching a Roadmap for Industrial Heat Decarbonisation.

Competitiveness Compass

The Commission published a strategic framework for the new mandate’s work, in line with the policy direction towards increased European competitiveness. According to the press release entitled 'An EU Compass to regain competitiveness and secure sustainable prosperity', a Task Force begins work on 1 February 2025. One of the pillars - a joint roadmap for decarbonisation and competitiveness - includes the following outputs:

Clean Industrial Deal and an Action Plan on Affordable Energy [Q1 2025]
Industrial Decarbonisation Accelerator Act [Q4 2025]
Electrification Action Plan and European Grids Package [Q1 2026]. The Compass also states: “Europe must invest more in modernising and expanding its network of energy transmission and distribution infrastructure, accelerating investment in electricity, hydrogen and carbon dioxide transport networks as well as storage systems.”
New State Aid Framework [Q2 2025]
Steel and metals action plan [2025]
Chemicals industry package [Q4 2025]
Strategic dialogue on the future of the European automotive industry and Industrial Action Plan [Q1 2025]
Sustainable Transport Investment Plan [Q3 2025]
European Port Strategy and Industrial Maritime Strategy [2025]
High Speed Rail Plan [2025]
Carbon Border Adjustment Mechanism Review [2025]
Circular Economy Act [Q4 2026]
Vision for Agriculture and Food [Q1 2025]
Oceans Pact [Q2 2025]
Amendment of the Climate Law [2025]

The Commission has also published its work programme for 2025, available on this page along with a summary fact sheet. Initiatives include a Clean Industrial Deal, Action Plan on affordable energy, and Industrial Decarbonisation Accelerator Act.

FURTHER EU DEVELOPMENTS

SEM-GB Trading

The latest EU position on developing a methodology for trading across interconnectors with the UK has been established in a Council Decision on SEM-GB trading. The EU and UK identified that the potential benefits of the Common Order Book approach to MRLVC will depend on the resolution of a number of fundamental design challenges. The decision sets out work to be undertaken by the TSOs over the next 12 months.

Renewable and Low Carbon Fuels

Commission Delegated Regulation (EU) 2025/192 on procedures for the accreditation of verifiers has been made under Regulation (EU) 2023/1805 on the use of renewable and low-carbon fuels in maritime transport.
Commission Implementing Regulation (EU) 2025/196 amending Implementing Regulation (EU) 2022/996 as regards the accreditation of certification bodies for non-biological origin and recycled carbon fuels has been made.

Network of TSOs for Gas

ENTSOG published its second revision of the Union-wide simulation of gas supply and infrastructure disruption scenarios as required under the EU Security of Supply Regulation. A latest System Capacity Map is also available.

Taxation and Subsidies

Favouring renewable energy through tax policy is an EU priority, as outlined by Commissioner Hoekstra here.

The Commission reports that the recent energy crisis made it necessary to take exceptional measures which impacted the trends in energy subsidies, temporarily reversing the declining trend of fossil fuel subsidies. At the same time, there was a significant decrease in renewable energy subsidies as they became more competitive. A collective effort by all Member States is needed to explain how they plan to phase out fossil fuel subsidies.

Investment

The EIB will lend €70 million to the Reutlingen utility company to invest in electricity and heating networks in and around Reutlingen. The Federal Network Agency reports that €327.7 billion in investment is required in electricity grids across Germany by 2045. Further information is available in the press section of the European Investment Bank website.

EU Energy System

An IMF Staff Background Note on EU Energy Market Integration reports on gains from EU energy integration and barriers to integration. Recommendations include developing a unified EU blueprint for system transformation; strengthening institutional financing frameworks; pooling resources to accelerate innovation and mitigate risk; streamlining permitting and optimising demand management; and pursuing coordinated action across all levels of governance of the energy market.

Global Outlook

G20 countries are not on course to meet emissions reduction commitments under the Paris Agreement, according to a news announcement from the European Commission. The report points to a scenario to close the gap by 2035, whereby each country would achieve at least 50% non-fossil electricity generation accounting for at least 35% of total energy usage, as well as implementing carbon capture and storage for about 5-20% of industrial emissions, and maximising carbon absorption through land-use and forestry management. The Commission also announced action to scale up renewable energy in Africa and to accelerate methane emissions abatement at COP 29.

CASELAW

ACER Jurisdiction and Balancing Guideline

In C281/23 P and C282/23 P, various electricity TSOs wish to have two judgments of the General Court set aside: those judgements dismissed a challenge by Austrian Power Grid AG and other TSOs to a decision of the ACER Board of Appeal upholding an ACER decision. The ACER decision, broadly, was that proposals from regulatory authorities around functions required to operate platforms for the exchange of balancing energy were not compatible with the Balancing Guideline. The General Court considered that ACER had jurisdiction to decide on the development of the methodologies, and that ACER was entitled to modify the TSOs’ proposals to ensure compliance with EU energy law, without being bound by any points of agreement between the national regulatory authorities.

In current appeal proceedings, the Advocate-General recommends that judgments of the General Court be set aside. The Advocate-General considers that:

where the ACER Board of Appeal states that it carried out a limited and marginal review, the General Court should annul the decisions of the Board of Appeal. Where the Board of Appeal states that it carried out a full review of the legal assessments and the complex technical assessments in an ACER decision, the General Court must analyse the extent of that review, if the applicants believe it was insufficient.
the General Court erred in holding that, under Regulation 2017/2195, the ‘function of management of cross-zonal capacity for the exchange of balancing energy’ is a function required to operate the aFRR and mFRR platforms. It was not disputed that the mFRR and aFRR platforms need the data relating to cross-zonal capacity for the exchange of balancing energy, but such data can be supplied to the platforms by the TSOs and do not necessarily need to be managed on the platforms directly.

Renewable Support Schemes and State Aid

Case C-514/23 concerns a dispute around an Italian renewable energy support scheme. An issue is the compatibility of a mechanism in the scheme with Articles 3 and 4 of the previous iteration of the Renewable Energy Directive, which provided that Member States may apply support schemes in order to meet their targets for the production of electricity from renewable sources.

The Advocate-General recommends that the question referred by the Italian Court be answered to confirm that the State aid provisions (Articles 107 and 108 TFEU) prevent a national court from assessing whether a mechanism in an existing support scheme is compatible with Article 3, where that mechanism is indissolubly linked to the support scheme previously authorised by the Commission in so far as it is necessary for the attainment of the object or for the functioning of that support scheme.

DOMESTIC DEVELOPMENTS

Networks

Minister Darragh O'Brien announced measures to enhance the distribution system, including an enhanced Winter 2025 Grid Resilience Plan.

Renewable Energy Benefits

A Wind Energy Ireland report quantifies the savings for Irish electricity customers since 2000, arising from wind and solar farms, as €840 million.

Climate Action Litigation

The High Court dismissed an application by Friends of the Irish Environment for judicial review of the Climate Action Plan [2025] IEHC 61. The Court’s conclusions included that the Climate Action and Low Carbon Development Acts now require the plan to “ensure” compliance with carbon budgets. “Ensure” means ensure with an appropriately high level of confidence as opposed to with scientific certainty. Some measures appropriate to a plan are not capable of being quantified because they do not in themselves reduce emissions, yet they are necessary. Other measures cannot yield an exact impact calculable in advance, but a reasonably educated estimate can be provided. Reference to targets and potential is not unlawful, but one must make a reasonable attempt to quantify what is considered likely to happen, such as to enable a reasonable member of the public to understand if the measures are realistic (that is, whether the plan is likely to actually meet the statutory objectives). The applicant’s complaint of lack of specificity was not accompanied by any meaningful engagement with the specificity the plan contained. Given the level of quantification on the face of the plan, the applicant had not discharged the onus of proof to show that a reasonable person would be unable to evaluate whether the plan is realistic.

CRU BUSINESS

National Energy Demand Strategy

The CRU’s biannual update includes the following:

the Large Energy User Connection policy decision is to be available in 2025, and
work is underway to define possible solutions to provide the appropriate financial incentives and design a procurement mechanism to enable Long Duration Energy Storage investment. EirGrid intends to consult with stakeholders on these proposals in the near future. (CRU/2025/05)

Networks

The CRU’s assessment of the System Operators performance against the PR5 Incentive and Reporting framework in 2023 is available (CRU/2024/120). There was progress in relation to the integration of renewables, but the TSO missed some PR5 targets in this area. DSO performance in several core performance areas were below required levels.

NORTHERN IRELAND

Networks

According to the Department of Economy website, DfE is consulting until 24 April 2025 on increased socialisation of connection costs in the electricity distribution network. The consultation sets out options for increasing the level of distribution reinforcement charged to general network costs.

Windsor Framework

The UK Secretary of State for Northern Ireland commissioned an independent review of the functioning of the Windsor Framework (Northern Ireland Protocol) to be delivered in six months, following the vote to retain the Framework.