KEY DEVELOPMENTS
New Connection Policy
A new Electricity Connection Policy for Generation and System Services will be implemented in Ireland in 2025. Read more in our full briefing here: New Connection Policy for Onshore Generators and Storage.
An objective of the policy is to meet the timelines in which 'permit-granting procedures' must be carried out under the EU Renewable Energy Directive ("RED III"). In a separate development, the European Commission has sent a formal notice to Ireland for failing to fully transpose into national law the provisions of RED III related to the simplification and acceleration of permitting procedures. Further information is available here.
Offshore Renewable Energy
- The Oireachtas approved the South Coast Designated Area Plan, as detailed here. The Plan is available here. It identifies four sites for development off the coasts of Wexford and Waterford.
- The CRU published its decision on grid access requirements for Phase 2 offshore wind projects supported by ORESS (CRU/2024/124). It is intended to set out the path by which projects can secure grid access and to indicate how the connection process will operate alongside the other consenting processes.
- Legislation for priority publication in the Autumn 2024 Legislation Programme (here) includes the Marine Protected Area Bill.
- MARA is designing a framework for awarding Maritime Area Consents on the basis of a competitive process. Further information is available here.
- The European Commission is inviting applications until 21 January 2025 for funding for projects that demonstrate innovative floating wind farm concepts. Further information is available here.
IME Directive
DECC is consulting on transposition of the revised IME Directive. Further information is available here.
Future Arrangements for System Services
The CRU's Decision Paper on Day Ahead System Services Auction ("DASSA") Market Design (SEM-24-066) is available. Features of the DASSA will include the following.
- Gate closure time will be 15:30 D-1 with results to be published 30 minutes later.
- The DASSA will procure services for a 24-hour period commencing at 23:00 day-ahead (D-1) and ending at 23:00 next day (D). Each DASSA Trading Period will be 30 minutes in duration.
- Volume requirements for each system service for each Trading Period will be published on the day of the auction (D-1) at the earliest feasible time before gate closure.
- Service providers will be able to submit bids for each service for each Trading Period, with no interdependency between bids.
- Service providers will be allowed to specify whether their DASSA bids are divisible or non-divisible.
- There will be a scarcity price cap per service to address volume insufficiency in the DASSA.
- The DASSA auction will be cleared on a pay-as-clear basis per Trading Period.
- DASSA design will allow for the procurement of individual reserve services, explicit bundles of reserve services, an implicit bundle of reserve services, and an operational requirement to procure different qualities or types of individual services.
- Long-run locational constraints will be modelled in the daily auction clearing optimisation.
- There will be zonal pricing.
- Settlement will be monthly in arrears.
The Decision also sets out the decisions around Secondary Trading and Commitment Obligations and Incentives. Next steps include the TSOs procuring IT solutions and publishing a revised Phased Implementation Roadmap. The TSOs have also been directed to conduct a consultation on the firm access policy for system services.
Emissions Trading System
Domestic legislation has been made to transpose revisions to the EU ETS under Fit for 55 (described here) and to provide for the new ETS 2, the initial phase of which begins in January 2025, as described on the EPA website here. ETS 2 imposes a carbon price on suppliers of certain fossil fuels to specified sectors (like transport and buildings). In scope suppliers must register with the EPA to continue supplying fuels to the Irish market on or after 1 January 2025.
The domestic legislation is available here:
- European Communities (Greenhouse Gas Emissions Trading) Regulations 2024
- European Communities (Greenhouse Gas Emissions Trading) (Aviation) Regulations 2024
- European Communities (Greenhouse Gas Emissions from Maritime Transport) Regulations 2024
- European Communities (Greenhouse Gas Emission Trading – Integrated Pollution Control Licensing) Regulations 2024
The European Commission also adopted an amendment to the EU ETS, Monitoring and Reporting Regulation (Implementing Regulation (EU) 2018/2066). The changes are summarised on this page.
EU DEVELOPMENTS
Energy Efficiency Directive
The European Commission published a Recommendation on the transposition of Article 29 of the Recast EED, which sets out obligations to support energy services.
Investment
- The Commission opened a new call for applications for energy infrastructure projects seeking the status of Projects of Common Interest or Projects of Mutual Interest under the TEN-E Regulation. The call for the electricity, hydrogen & electrolyser categories runs to 18 November 2024, and for the smart electricity grids, smart gas grids, CO2 and projects falling under the Article 24 derogation, to 18 December 2024.
- The Commission launched the fourth call to obtain the status of cross-border renewable energy projects permitting entry on a list of projects eligible for Connecting Europe Facility funding. The closing date is 7 January 2025. Renewable energy projects recently identified as eligible for CEF funding are listed here.
- The Commission issued €10 billion of EU-Bonds in an eighth syndicated transaction for 2024, €5 billion of which is in the form of NextGenerationEU Green Bonds. Further information is available here.
- The EIB and Department of Transport announced advisory cooperation to assess capacity, demand and financing strategies required for the development of offshore renewable energy port infrastructure in Ireland. Further information is available here.
- The EIB is providing a €500 million counter-guarantee to Intesa Sanpaolo, enabling the Italian bank to create a portfolio of bank guarantees of up to €1 billion to support supply chain and grid interconnection for new wind farm projects across the EU. Further information is available here.
Hydrogen and Low-Carbon Fuels
- European Hydrogen Bank: The Commission published terms and conditions for the second auction for renewable hydrogen production, financed by the EU ETS revenues via the Innovation Fund.
- Low Carbon Fuels: Commission Delegated Regulation on procedures for the accreditation of verifiers pursuant to Regulation (EU) 2023/1805 on the use of renewable and low-carbon fuels in maritime transport is available here.
- Low Carbon Fuels: The Commission is consulting until 25 October 2024 on the methodology to determine the GHG emission savings of low-carbon fuels, in the context of the certification procedure aimed at ensuring that low-carbon fuels reduce emissions. Further information is available here.
- Financing: The European Clean Hydrogen Alliance has published a 'Learnbook on Financing of Hydrogen Infrastructure'. Further information is available here.
- Hydrogen Map: A call has been launched to submit new and updated project information. Further information is available here.
- EESC: The European Economic and Social Committee has called for rapid roll out of renewable and low-carbon hydrogen across the EU. Further information is available here.
- Court of Auditors: The Council of the EU published draft conclusions on the European Court of Auditors' Special Report No 11/2024: 'The EU's industrial policy on renewable hydrogen - Legal framework has been mostly adopted - time for a reality check'. They invite the Commission to follow up with actions, ensuring the right balance between the competitive edge of the European industry and investors' security.
Electricity
- DAM and IDM: ACER adopted the amended methodology for the price coupling algorithm and continuous trading matching algorithm.
- Capacity Mechanism: The Commission approved amendments to the Belgian capacity mechanism to improve its functioning and contribution to environmental protection. The decision is available here.
- SDAC: ACER approved the TSOs' proposal to amend the methodology for calculating scheduled exchanges resulting from single day-ahead coupling.
- Price Divergence: The EU Presidency published notes in advance of the Energy Council meeting on divergence of wholesale electricity prices in Central and Eastern and Southeastern Europe. It suggested that substantial investment in interconnections and flexibility are necessary. It suggests that short-term measures may be needed to prevent high price periods during the winter period. It states that enhanced coordination among TSOs and coordination for infrastructure planning are key to unlocking the full potential of the region and to stabilising prices. Further information is available here.
RED III
- Data: The Commission is consulting until 7 November 2024 on a draft Regulation under RED III to extend the scope of the data to be included in the EU database relating to production or collection of the raw material used for fuel production. Further information is available here.
- Palm Oil: The Irish Government called on the Commission to act in respect of concerns that the advanced biofuel target under Article 25 has led to an increase in the supply and consumption of palm oil derived biofuels. Further information is available here.
Network Planning
ACER published an Opinion on the compliance of the draft joint Scenarios Report for the Ten-Year Network Development Plan 2024 with ACER's Framework Guidelines. ACER expects some of issues of non-compliance to addressed in the final 2024 Scenarios Report for the TYNDP and that ENTSOG and ENTSO-E will tackle remaining shortcomings in the 2026 scenarios. Further information is available here.
REMIT
ACER published updated guidance following introduction of intraday auctions in SIDIC, as well as latest electronic formats for reporting. It published guidance for non-EU market participants on expectations for compliance.
Electric Vehicle Infrastructure
The Commission is consulting until 18 October 2024 on technical amendments to the Measuring Instrument Directive to introduce harmonised metrology requirements for EV charging stations and hydrogen refilling stations, and to update the requirements for smart utility meters. The consultation page is available here.
State of the Energy Union
An annual status check by the EU is available from this page. In H1 of 2024, half of the EU's electricity generation came from renewable sources. Key figures on Ireland are available here.
CLIMATE ACTION LITIGATION
Challenge to Development Consents in the North Sea
A Scottish Court granted Greenpeace and Uplift leave to apply for judicial review of development consents granted for Rosebank and Jackdaw gas fields in the North Sea. In addition, the new UK Government decided not to continue to defend the challenge. This follows the June ruling by the UK Supreme Court in the Finch case, when it found that a local council, when granting permission to extract oil from a site, should have considered the emissions that would arise from burning the extracted oil, and not just the impact of extracting the oil. Further information is available in this press report.
Project Ireland 2040
Case C-727/22 concerns a preliminary reference from the Supreme Court of Ireland concerning the interpretation of Directive 2001/42/EC on the assessment of the effects of certain plans and programmes on the environment, arising in proceedings taken by Friends of the Irish Environment CLG in respect of the adoption the National Planning Framework and the National Development Plan, two strands of Project Ireland 2040.
The CJEU ruled that Article 2(a) of Directive 2001/42/EC means that a measure adopted by the government of a Member State solely on the basis of a provision of the Constitution of that Member State providing that the executive power of the State is to be exercised by or on the authority of that government does not meet the condition of being 'required by legislative, regulatory or administrative provisions' and, consequently, cannot constitute a 'plan' or a 'programme' for the purposes of Article 2(a).
FURTHER DOMESTIC DEVELOPMENTS
Legislative Programme
Legislation for priority publication in the Autumn 2024 Legislation Programme (here) includes the following: Gas Safety (Amendment) Bill and the Marine Protected Area Bill. Legislation for priority drafting includes Environment (Miscellaneous Provisions) Bill; Heat (Networks and Miscellaneous Provisions) Bill; and Strategic Gas Emergency Reserve (Amendment) Bill.
Emissions
The 2023 energy balance shows progress on emissions reduction although it is not enough to meet carbon budgets. The main driver of reduced energy-related emissions in 2023 was the reduced emissions from electricity generation. Further information is available here.
CRU BUSINESS
Tariffs and Price Control Review
A Decision Paper on dynamic electricity price tariffs is available (CRU/2024/112). An Information Paper on the gas transmission tariffs for 2024/25 is available (CRU/2024/119). The CRU is also consulting until 8 November 2024 on Price Control 5 for GNI (CRU/2024/122) and Terms of Reference for the Gas Network Stakeholder Engagement Evaluation Panel 2026 and 2027 (CRU/2024/123).
SEMC BUSINESS
Demand Side Units
The closing date for the consultation on Demand Side Units has been extended to 25 October 2024 (SEM-24-046).
Capacity Market Code Modifications
The following decisions have been made on proposed Code modifications:
(SEM-24-061):
- CMC_22_23: Indexation of Capacity Payment Price for Inflation: The SEMC will not make this modification. It will consider consulting on an enduring indexation mechanism in the next significant update to the CRM, expected ahead of the next State aid application.
(SEM-24-062):
- CMC_03_24: Enduring mechanism for indexation based on GB model: The SEMC will not make this modification. It will consider consulting on an enduring indexation mechanism in the next significant update to the CRM, expected ahead of the next State aid application.
- CMC_05_24: Amendment to J.6.1.6 to recognise extensions granted under SEM-23- 101 and SEM-23-108: The SEMC will make this modification.
(SEM-24-070):
- CMC_07_24: Treatment of Capacity Contracts of Varying Duration in Constrained Auction Solution: The SEMC approves the principle of prioritising shorter duration contracts in the resolution of constraints subject to consideration of the impact assessment on the system solution and any associated unintended consequences.
- CMC_08_24: Widening of Longstop Extension Process to Awarded Capacity for 2023/24 Auction: The SEMC approves this modification, with amended drafting.
- CMC_09_24: Amendments to J.5.7 and J.5.8: The SEMC approves this modification, with amended drafting.
SEM Testing Tariffs
There will be no changes to the 2025 SEM Testing Tariff rates from the approved 2024 rates for Generator Units Under Test, other than to apply inflation (SEM-24-069).
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.
