Energy

KEY DEVELOPMENTS

Private Wires

A private wires policy is expected next month, it has been reported in The Irish Times, allowing cables to be laid directly between producers and consumers, which is not unusual in many jurisdictions. The policy would be the outcome of a consultation we considered in our briefing: Private Wires: First Principles.

Offshore Renewable Energy

The ORESS Tonn Nua Auction terms and conditions and Tonn Nua timetable are available. Key differences as compared to ORESS 1 include compensation for constraints, and also reflect that EirGrid will be responsible for constructing the connection assets. There is a new requirement to provide a declaration of applicant project experience which confirms that a director reasonably believes that the applicant satisfies requirements in project experience and project delivery team experience. A director’s declaration of Maritime Area Consent eligibility is also required. A fuller briefing will follow and we are happy to provide a redline as against ORESS Phase 1 terms and conditions.

The Department of Climate, Energy and Environment provided a platform to access data on the Tonn Nua site. The Department is consulting until 7 July 2025 on the Consultation on the Marine Planning Policy Statement, as outlined in our Environment and Planning section.

The Government published a Future Framework 2025 Review with the intent of outlining progress on strategic actions and including an updated action plan. Actions are set out at pages 16-20. The Department of Transport published Maritime Navigation Safety & Emergency Response Guidance for Offshore Renewable Energy Installations.

Non-Renewable Price Criteria

Article 26 of the Net Zero Industry Regulation provides for non-price criteria in renewable energy auctions. It applies from 30 December 2025. The Commission made several Implementing Regulations, which are available from this page, some of which relate to non-price criteria for auctions. Implementing Regulation (C(2025)2900) specifies pre-qualification and award criteria, including in relation to resilience. Certain obligations in relation to resilience criteria are triggered based on determinations of the Commission made nine months before the day of publication of an auction (as opposed to the date of publication of an auction, as was the case in the draft legislation).

EU-UK Trading Arrangements

The UK and the EU reaffirmed their commitment to implement the Withdrawal Agreement, including the Windsor Framework, and the Trade and Co-operation Agreement. A Q&A is available, in addition to the Commission’s statement, which includes the following:

Electricity Trading: The European Commission and the UK should explore the necessary parameters for the UK’s participation in the EU’s internal electricity market, including participation in the trading platforms in all timeframes. Meanwhile, the current electricity trading arrangements continue to apply. Any agreement should be articulated with the provisions of the Windsor Framework.
EU ETS and CBAM: The UK and the European Commission should work towards establishing a link between carbon markets by way of an agreement linking the EU and UK Emissions Trading Schemes. This should create the conditions for mutual exemptions from the respective EU and UK Carbon Border Adjustment Mechanisms. The sectors falling in the scope of the ETS linking agreement should be clearly defined. This scope should include electricity generation, industrial heat generation, industry, domestic and international maritime transport and domestic and international aviation. The agreement should provide a procedure to further expand the list of sectors to be covered by the linking agreement.

Carbon Border Adjustment Mechanism

We outlined proposals to simplify the CBAM here: Omnibus Package: Revision of the Carbon Border Adjustment Mechanism. The European Parliament adopted its position as we mentioned here: European Parliament approves simplified Carbon Border Adjustment Mechanism.

The Council has now also adopted its position which includes further amendments to simplify and clarify the rules. The four column-document setting out the institutions’ positions has been published, paving the way for informal trialogue negotiations. On 18 June 2025, the Council and Parliament reached a deal. Final endorsement and adoption is anticipated in September 2025.

Energy Efficiency Obligation Scheme

The Government is consulting until 14 July 2025 on the redesign of the Energy Efficiency Obligation Scheme. It is intended to start on 1 January 2026. New targets and energy efficiency notices will be issued for 2026. New guidance will be issued to obligated parties. The Recast Energy Efficiency Directive includes a larger pool of entities as potential obligated parties: energy distributors, retail energy sales companies, and transmission system operators.

New Obligations proposed for all Suppliers

The CRU is consulting until 10 July 2025 on changes to the Supplier of Last Resort Framework. The CRU proposes introduction of a 90-day notice period for suppliers who exit the market for strategic reasons. It proposes that customers transfer to the best available discount tariff that the SoLR is offering, and that the lock-in period to the SoLR is standardised to 60 days. The CRU also makes proposals around a competitive process to appoint the SoLRs.

It is worth noting in particular that the CRU is proposing to implement a new financial responsibility condition in existing Gas and Electricity Supply Licences. It would oblige suppliers to have adequate financial arrangements in place to meet reasonably anticipated financial liabilities as they fall due on an ongoing basis. It would oblige suppliers to have access to committed sources of liquidity to enable the supplier to trade for at least the next 12-month period. Suppliers already have significant commitments to post security to cover potential financial obligations arising from participation in the market. The CRU is also proposing to enhance financial reporting that suppliers currently provide for the Retail Market Monitoring framework.

EU DEVELOPMENTS

Electricity Grids: Anticipatory Investment

The European Commission published guidance on anticipatory investments for developing forward-looking electricity networks, as promised in February (see our post: Clean Industrial Deal: Crucial Role of the Energy Sector).

The Commission indicates that, for anticipatory investments to fully reach their potential, existing practices need to adapt. The guidance sets out recommendations in the areas of network planning; scrutinising Network Development Plans; allowing anticipatory investment while keeping bills affordable; designing connection charges for incentivising system-friendly behaviour; regulatory scrutiny of network investments and incentives; and developing effective risk mitigation strategies.

Recommendations include use of public funding for financing investment, further guidance on which will follow. Another option is State loans on infrastructure development paid back on the actual asset utilisation rate, delaying the repayment, with the risk being carried by the State entity providing the loan.

European Grid Package

A European Grids Package is anticipated by Q1 of 2026 (to include legislation), aimed at improving network planning, speeding up permitting, improving cost-sharing, boosting innovation and supporting supply chains. The Commission is calling for evidence until 5 August 2025 on an impact assessment for the grid package. The Package aims to:

streamline the legal framework for European grids (including the Trans-European Networks for Energy (TEN-E)) and ensure cross-border integrated planning and project delivery,
strengthen distribution grid planning and contribute to more efficient use of existing infrastructure in line with the ‘energy efficiency first principle’,
increase visibility of manufacturing supply needs, develop effective cost and benefit sharing mechanisms, and address energy infrastructure financing,
accelerate project implementation through shorter permitting processes, and
support the development of hydrogen and carbon dioxide infrastructure and overcome barriers to investment to facilitate the flow of renewable and low-carbon hydrogen within the system.

Ireland’s National Energy and Climate Plan

The European Commission assessed Ireland’s NECP, which sets out the actions to be taken to meet EU climate requirements. The assessment is that Ireland will miss its targets to reduce emissions under the Effort Sharing Regulation and Land Use, Land Use Change and Forestry Regulation. This means that Ireland will be required to buy Carbon Credits and Land Removal Units from other Member States. The Commission assesses that the NECP is consistent with meeting Ireland’s EU renewable energy target of 43% of final consumption coming from renewable sources (albeit that progress in 2023 was 15.3%). Failure to meet the 43% target would mean that Ireland has to buy statistical transfers from other Member States. The Irish Fiscal Advisory Council has estimated the price of these liabilities at €8-26 billion.

Recommendations from the Commission include developing a more comprehensive plan on the acceleration of grid expansion, ensuring that energy storage and demand response measures are integrated into the NECP, enhancing the ability of the grid to accommodate renewable energy, and prioritising cleaner heating solutions, such as heat pumps and solar thermal energy.

In Ireland, latest reporting from the Environmental Protection Agency indicates that Ireland is not on track to meet 2030 targets. As regards the energy sector, however, the SEAI’s Interim National Energy Balance indicates that Irish energy-related emissions are at their lowest level in 30 years, despite an increase in energy use. The EPA’s National Climate Change Risk Assessment identifies risks to energy distribution infrastructure, buildings and transport infrastructure.

2040 Climate Targets

It has been reported in the FT that the EU presented options to Member States to ease ways in which they can meet the 2040 target of cutting emissions by 90% compared to 1990 levels. They include counting carbon credits, including negative emissions from carbon capture and storage, and allowing for deeper emissions reductions later.

Renewable Fuels of Non-Biological Origin

Articles 22a, 22b and 25 of the Renewable Energy Directive focus on mainstreaming renewable energy in the industry and transport sectors, providing incentives and obligations for Member States to ensure those sectors can switch to production processes using renewable energy, such as renewable fuels of non-biological origin (“RFNBOs”), as fuel or feedstock. The European Commission published guidance on transposing and implementing these provisions.

Electricity

Control Systems: A Position Paper on Vendor Agnostic Solutions for Next-Generation Control Room Eco-Systems seeks to address the growing complexity of European power systems and the limitations of legacy SCADA/EMS infrastructures.
Customer Switching: A Commission Regulation provides for interoperability requirements and procedures for access to data required for customer switching. It lays down interoperability requirements and procedures for access to and exchange of data required for switching in the electricity market. It specifies the technical process for switching electricity supplier which, in accordance with Article 12(1) of the IME Directive, shall, by no later than 2026, take no longer than 24 hours and be possible on any working day. It establishes a reference model for data required for the final customer switching supplier process, which also lists roles and responsibilities.
Cybersecurity: A guide on benchmarking cybersecurity investments in the EU electricity sector is available, intended to provide regulatory authorities with an overview of costs, effectiveness and efficiency, and process of services. ACER is also calling until 2 July 2025 for applications to join its cyber security stakeholder committee.
Derogations: Derogations have been granted from a number of provisions in the IME Regulation and Directive to Spain in respect of the Balearic Islands and Melilla.
Emergency Intervention: The Commission published a report on emergency intervention to address high energy prices in 2022-3.
Network Development: In its Opinion on ENTSO-E’s TYNDP, ACER finds that the Plan generally contributes to the objectives of non-discrimination and effective competition but does not sufficiently contribute to the efficient functioning of the electricity market or ensure an adequate level of cross-border interconnection open to third-party access. It makes recommendations for finalising the 2024 TYNDP and improving future editions. ENTSO-E, with others, has developed a roadmap focused on increasing visibility on equipment and system needs, asset testing and specifications for cable systems.
Offshore: ENTSO-E has provided an Offshore Roadmap, identifying six priorities to prepare the power system for the integration of massive growth in offshore renewable energy.
Blackouts: ENTSO-E panels are investigating the blackouts on the Iberian peninsula and North Macedonia.

Gas

ENNOH: The Commission’s Opinion on the draft articles of association of the European Network of Network Operators for Hydrogen notes that, under Article 57(5) of the Internal Market in Gas Regulation, Member States may nominate an entity as an associated partner within ENNOH. This would facilitate formal inclusion of prospective members in light of varying speeds of transposition of the Gas Directive across Member States potentially leading to uneven representation at ENNOH in this initial phase.
Large-scale Hydrogen Production: The European Commission published a staff working document on implementation and monitoring of large-scale hydrogen deployment projects. It sets out bottlenecks identified in hydrogen projects throughout the EU. Participants mentioned that further incentives and additional funding support from the EU and national governments are strongly needed. The Commission also announced production projects that will receive €992 million in EU funding.
Hydrogen Infrastructure: ACER made recommendations to improve the methodology to better identify hydrogen infrastructure gaps as presented in ENTSOG’s report, part of the EU TYNDP.
LNG Natural Gas: ACER made recommendations aimed at Europe securing higher LNG volumes to ensure stabler pricing, while maintaining the flexibility to avoid over-contracting in a changing market.

Carbon

EU ETS: Allowances in circulation on the European carbon market (the annual surplus indicator) are set out in a Communication adopted by the European Commission.

Maritime Surveillance: The mandate of the European Maritime Safety Agency is in the process of being updated to enable it to fulfil tasks in the areas of maritime safety, pollution prevention and response, decarbonisation, emissions monitoring, surveillance and maritime awareness.

TEN-E Regulation

ACER has reported on progress, regulatory treatment and financing status of the projects in the first EU list of PCIs and PMIs (2024).

REMIT

A new REMIT Date Reference Centre is available, aimed at increasing transparency in EU wholesale energy markets and offering insights to market participants, analysts and researchers.

Investment

The European Commission endorsed a positive preliminary assessment of Ireland's second payment request for €115.5 million under the Recovery and Resilience Facility. Planned investment includes capital grant funding to increase biomethane production capacity by 0.1TWh.

Oil and Gas Producers

The Commission adopted a Delegated Regulation under the Net Zero Industry Regulation, specifying rules that apply to European oil and gas producers required to provide new CO2 storage solutions by 2030. The list of in scope companies is available here.

Ocean Pact

The European Commission adopted an Ocean Pact, a strategy intended to protect the ocean, promote a blue economy and support the well-being of people in coastal areas. It brings together EU ocean policies and was presented at the UN Ocean Conference in June 2025.

Nuclear Power

The Commission is seeking evidence until 1 July 2025 on development of an EU Fusion Strategy.

Strategic Raw Materials

The European Commission selected 13 strategic projects in third countries to secure access to materials for sectors including renewable energy. Further information on the strategic projects is available here.

Innovation

The European Commission and the European Investment Bank agreed to renew Project Development Assistance under the Innovation Fund to increase technical and financial advisory support for innovative decarbonisation projects. It is intended that EIB Advisory will provide assistance to up to 250 projects between 2025 to 2028.

CASELAW

Contract Termination

The Czech case of Case C-749/23 concerned a supplier’s claim for payment of a penalty following its early termination of a supply contract for non-payment. Article 3(1) of the Unfair Terms in Consumer Contracts Directive provides that a contractual term which has not been individually negotiated is to be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations under the contract, to the detriment of the consumer. An example of an unfair term is requiring a consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation.

The CJEU indicated that Articles 3(1), 5 and 7 of the Directive mean that, in a contract for electricity supply for a fixed term at a fixed price, a term that allows a supplier that has terminated early for the customer’s failure to pay to automatically impose a flat-rate penalty may be regarded as unfair.

It is for the national court to assess whether a contractual term is unfair for the purposes of Article 3(1) of the Directive. The contractual term will meet the transparency requirements in Article 5 of the Directive if the structure and location of that term in the contract and the circumstances attending the conclusion, by electronic means, of the contract (including the information the supplier has provided to the consumer) are such as to allow an average consumer who is reasonably well informed, observant and circumspect to become acquainted with the substance and functioning of the term imposing payment of a flat-rate penalty, and to evaluate the economic consequences which flow from that term.

Metering

The Bulgarian case of C-310/24 concerned proceedings taken by a customer over a bill based on estimated electricity consumption owing to malfunction of the meter. The referring court explained that the metering rules govern the calculation of the amount of electricity that can be attributed to the consumer when consumption has not been measured accurately, and referred several questions to the CJEU.

Article 18(1), (7) and (8) of the IME Regulation deal with charges for access to networks, use of networks and reinforcement. Article 10(4) of the IME Directive deals with modification of contractual conditions. Article 46(2)(d) provides that the activity of electricity transmission includes collection of transmission system related charges including access charges, energy for losses and ancillary services charges. Article 59(1)(a) gives regulatory authorities the duty of fixing or approving tariffs or their methodologies.

The CJEU indicated that these provisions do not govern the legal consequences of the malfunctioning of an electricity meter and are not applicable to a situation in which, owing to malfunctioning, it has not been possible to measure accurately the amount of electricity consumed by a residential customer and a sum corresponding to an estimated electricity consumption has been billed to that customer.

Article 27 of the Consumer Rights Directive provides that consumers do not have to pay for unsolicited supply of electricity or unsolicited provision of certain services. The CJEU indicated that this provision does not apply to a situation in which payment is demanded from a consumer for electricity provided in accordance with a valid contract, consumed, but not accurately measured owing to the malfunctioning of a meter.

Acts or Omissions by EU Institutions

In Case T-342/23, Acquind Ltd claimed that, as a result of unlawful acts and omissions by ACER, it suffered damage for which it sought compensation. This is one of a number of proceedings arising from the Acquind interconnector project losing PCI status and being unable to obtain an exemption under Article 17 of Regulation (EC) 714/2009 or cross-border cost-allocation under Article 12 of Regulation 347/2013.

The General Court identified that the condition for unlawful conduct is met where the contested conduct involves a rule of law intended to confer rights on individuals and where the breach alleged against the institution is sufficiently serious. The test for finding that a breach is sufficiently serious is whether the institution manifestly and seriously disregards the limits on the institution’s discretion. The General Court found that Acquind had not succeeded in demonstrating that ACER had breached any legal principles, and dismissed Acquind’s application.

Project of Common Interest

In Ireland, the Court Service published a 2022 judgment in which the Court of Appeal upheld the High Court’s decision not to refer a question for determination by the CJEU under Article 267 of the TFEU ([2022] IECA 298 ). Friends of the Irish Environment (“FOIE”) sought the annulment of European Commission delegated legislation which included a proposed liquefied natural gas terminal at Shannon as a Project of Common Interest (PCI) under the TEN-E Regulation.

The Court of Appeal found that inclusion by the Irish State of the Shannon LNG project in the regional list sent forward to the Commission was a step that was preparatory and ancillary to the decision ultimately made by the Commission in adopting the delegated regulation. Case law made clear that, in such circumstances, the EU courts have exclusive jurisdiction, and preparatory and ancillary steps cannot be challenged at national level.

Compensation under the Electricity (Supply) Act 1927

In Ireland, ESB v Good and Peter and Rose O’Reilly [2025] IESC 27 concerned compensation for owners or occupiers of land under section 53(5) of the Electricity (Supply) Act 1927 Act in respect of the exercise by ESB of its powers under section 53(1) to place an electric line across certain lands and under section 53(9) to enter on lands for the purpose of placing, repairing or altering a line under section 53(9). The Supreme Court confirmed that such compensation encompasses compensation for depreciation of the value of the entire land holding that is the subject of the burdensome rights imposed pursuant to section 53 of the Act. The right to compensation (if any) consequent on an exercise of the powers conferred by section 53(9) fell to be decided when, and only when, those powers were actually exercised.

CLIMATE ACTION LITIGATION

Impact of Emissions Abroad

A German Court dismissed an application by a Peruvian farmer against RWE relating to the threat of flooding to his home as a result of global warming contributed to by RWE’s past emissions. Dismissal of the proceedings was based on an assessment that risk of flooding was low. However, the German Court found that polluters could be held accountable for damage suffered abroad resulting from harm to the climate. Numerous press reports are available including reports by the FT and Reuters.

DOMESTIC DEVELOPMENTS

RESS

The new Rulebook for Community Benefit Funds is available. A Supplementary Note to RESS Terms and Conditions is intended to outline how changes to the CBFs under RESS will be applied to previous RESS auctions. A consultation response notice is available.

Support Scheme for Renewable Heat

The support scheme for renewable heat provides tariff or grant support to heat users. It is intended to financially support the installation and/or operation of renewable heating systems by commercial, industrial, agricultural, district heating and other non-domestic heat users. DCEE wishes to extend the scheme to larger users which are in the scope of the EU ETS. This would include, for example, power plants and industry. DCEE is required to ensure that this will not breach State aid guidelines and this consultation is a requirement for seeking the necessary approval from the European Commission.

Renewable Transport Fuel Certificates

National Oil Reserves Agency Act 2007 (Additional Certificates for Renewable Transport Fuel) (Amendment) Regulations 2025 exclude biofuel produced from palm oil mill effluent from the award of additional Renewable Transport Fuel Certificates.

Storage Stakeholder Forum

Under the Electricity Storage Policy Framework, the Government held a forum for stakeholders in November 2024. A report on the storage stakeholder forum is now available.

Energy Transition Recommendations

In Ireland, the National Economic and Social Council recommended actions to progress Ireland’s energy transition. Wind Energy Ireland has also published an Offshore Action Plan recommending 24 actions in the areas of delivering Phase 1 projects; maximising the South Coast DMAP; accelerating the National ORE DMAP; and building vital infrastructure and demand strategies. The SEAI is leading a multi-way study to explore pathways to eliminate greenhouse gas emissions from the electricity system.

CRU BUSINESS

Demand Flexibility

The CRU’s decision paper on ESB Networks Demand Flexibility Product Procurement is available. Flexibility Service Providers will be permitted to participate in multiple markets, stack revenues, and adhere to operating envelopes issued 24 hours before the day-ahead market closure. Delay damages can be incurred for late energisation.

PSO Levy

The CRU is consulting until 9 July 2025 on the proposed Public Service Obligation Levy 2025/26 Decision Paper. The CRU’s initial calculation is that a PSO Levy of €156.22 million will be required for the 2025/26 PSO year, representing a decrease of €95.57 million on the 2024/25 PSO Levy, which was €251.79 million.

Smart Meter Upgrade

The CRU is consulting until 31 July 2025 on Smart Meter Upgrade - Access to Near Real Time Metering Data. The CRU proposes that the provision of near real time metering data services should be market led, meaning the removal of the requirement on ESB Networks to provide a ‘backstop’ physical In-House Display to any customer who requests one. The CRU considers that most customers may prefer to access near real time metering data through their smart phone. However, the CRU is considering an option which would mean that vulnerable customers would be eligible to request an accessible near real time data service from ESB Networks, for a transitionary period.

Gas Tariffs

The decision on Gas Networks Ireland Allowed Revenues and Tariffs for Transmission and Distribution is available. Adjustments result in allowed transmission revenues of €290 million for 2025/26, a nominal increase of 2.1% compared to 2024/25.

Gas Prepayment Meter System

A Decision on the High-Level Design for the Gas Prepayment Meter System Replacement Project states that, without this replacement project, current meters will become obsolete, and a gas prepayment meter will no longer be an option for customers. Rollout of the new meters is expected to begin in 2027 and take approximately four years.

SEMC BUSINESS

Capacity Market: 2028/29 T-4 Auction

An information note on volumes procured in 2028/29 T-4 is available, comprising around 606MWd of new capacity, and 1646MWd of refurbished capacity. The SEMC indicates it will begin a process to appoint members of a panel of technical experts to implement a recommendation of the EY Report relating to greater transparency of target volume setting. The SEMC plans to implement this by the 2029/30 T-4 auction.

Capacity Market: Code Modifications

The SEMC timetabled several proposed modifications (SEM-25-022) on which it is consulting until 3 July 2025 (SEM-25-023) and 17 July 2025 (SEM-25-027). It has decided not to make the following modifications:

performance security requirements and recovery of NPV lost as a result of non-fault delays (SEM-25-016),
performance securities for extended projects (SEM-25-017).

Imperfections Charges

The SEMC did not approve a request from SEMO for a mid-year adjustment to the Imperfections Charge Factor to 1.5 for each imbalance settlement period, applicable from 1 July 2025 to 30 September 2025. The SEMC considers it essential that the TSOs increase the transparency of forecast and actual costs associated with Imperfections Charges on a publicly available platform, on a real time basis. The SEM Oversight Committee communicated concerns to the TSOs and await a response (SEM-25-025).

NORTHERN IRELAND

Renewables Consumption

For the 12-month period ending March 2025, 43% of total metered electricity consumption in Northern Ireland was generated from metered renewable sources located in Northern Ireland, according to DfE. This is a decrease of 2.4% on the previous 12 months. The report does not comment on dispatch down levels.