KEY DEVELOPMENTS
Hybrid Connections Proposal: Impact on Priority Dispatch
The CRU is consulting until 14 April 2025 on the Sharing of Maximum Export Capacity behind a Single Connection Point. The proposal is not intended to facilitate energy sharing in the sense of allowing generation that has been constrained or curtailed down to be used to charge co-located storage. It is also significant that the CRU considers that renewable generators with priority dispatch seeking to convert their site to a co-located hybrid project and/or avail of the sharing of MEC would likely lose their priority dispatch status.
We look at the hybrid connection proposal, including the view on priority dispatch, in our briefing: Potential Impact of Hybrid Connection Proposal on Priority Dispatch.
Connection Policy for Customers in the Data Centre Sector
The CRU is consulting until 4 April 2025 on a Large Energy Users connection policy targeted exclusively at data centre customers seeking to connect to the electricity network. Grid connection and demand response are areas supported by EU and domestic law regimes. Connection policy must be non-discriminatory, and there are prescribed circumstances in which connections may be refused. Demand response under EU law is an activity undertaken by final customers in response to market signals or the acceptance of their bid to sell demand reduction.
We look at the CRU's connection policy proposal in our briefing here: Data Centres: Key points in Consultation on Electricity Connection Policy
Separately, the Department of the Environment, Climate and Communications published a reminder of data centre reporting obligations under Article 12 of the Recast Energy Efficiency Directive. The next reporting deadline is 15 May.
Clean Industrial Deal: Energy Sector
The Commission signalled plans to progress decarbonisation, electrification and competitiveness in a Communication on the Clean Industrial Deal and an Action Plan for Affordable Energy. The Commission proposes a 2040 target of 90% net greenhouse gas emissions reduction, and it is anticipated that a legislative proposal will soon follow.
The energy sector is earmarked to play a central role. There are plans to explore various routes to funding grid development. The Commission also states that a fast increase in PPAs and CfDs is key to making clean energy production more attractive for industrial users.
We look further at the Clean Industrial Deal in our briefing: Clean Industrial Deal: Crucial role of the Energy Sector.
Clean Industrial Deal: State Aid
In the Communication on the Clean Industrial Deal, the Commission commits to simplifying State aid rules by June 2025 to accelerate the roll-out of renewable energy, deploy industrial decarbonisation and ensure sufficient capacity of clean tech manufacturing.
The Commission is now consulting until 25 April 2025 on its draft State aid Framework accompanying the Clean Industrial Deal. Adoption of the text is planned for June 2025. Once adopted, it will replace the Temporary Crisis and Transition Framework and remain in force until 31 December 2030. It addresses both renewable energy supports as well as electricity capacity mechanisms. A press release on the draft State aid Framework is available on the Commission's website. The Commission has also reported on the current process for approving capacity mechanisms in the EU and actions to improve it.
Omnibus Package: Carbon Border Adjustment Mechanism
The Commission published its proposal to simplify the CBAM and announced a review on extension of the CBAM later this year. The proposal appears to provide practicable solutions to maintain effectiveness of the CBAM while easing compliance.
The date from which CBAM authorised declarants will be required to obtain CBAM certificates would be pushed back by a year. Member States would begin selling CBAM certificates on 1 February 2027. However, note that this obligation still relates to carbon liabilities accrued from the beginning of 2026.
The Council has created an ad hoc committee responsible for drafting the Council's general approach to the Omnibus simplification package, under the direct supervision of COREPER. This is seen as a sign of the urgency with which this workstream is being progressed.
We look further at the CBAM reforms in our briefing: Omnibus Package: Revision of the Carbon Border Adjustment Mechanism.
We also look at other aspects of the Omnibus Package in our briefing: Omnibus Package: Proposed Amendments to CSRD and CSDDD.
Phase 2 Offshore Development
A CRU decision on grid-connection policy for Phase 2 ORESS projects is available (CRU/2025/13). It supplements the decisions on Grid Connection Pathway and Grid Connection Charging, which we looked at in our briefing: Offshore Renewable Energy (Phase 2): Area Designation and Grid Connection Path.
The main points of the supplementary decision are:
- Guarantee of Availability ("GoA"): This concerns availability of EirGrid's transmission assets and compensation for outages of the assets. The same regime as Phase 1 is to be adopted (that is, the ORESS strike price will provide a price signal for costs associated with unplanned maintenance periods). The GoA will start at the issue of the Interim Operational Notice. Between Interim Operational Notice and Final Operational Notice, GoA compensation will only be available for unplanned outages that result in the offshore connection assets being unavailable for electricity transmission. Firm access will be a requirement for GoA compensation.
- Firm Access Quantities: The MEC of 900 MW for the Tonn Nua auction was included in EirGrid's latest Firm Access Allocation run. EirGrid is required to communicate the results of this allocation run to prospective auction bidders at the earliest opportunity and in advance of the pre-qualification stage of the Tonn Nua auction. Phase 2 projects will be provided with firm access from the Grid Delivery date (Interim Operational Notice) as defined in the ORESS Tonn Nua Terms and Conditions.
- O&M Costs: EirGrid's O&M costs of the transmission connection assets will be recovered via the new Offshore Grid charge (being developed for Phase 1), which will be part of Demand Use of System (D-TUoS) charges.
- Connection Agreement: There will be a 30-year term, with automatic one-year rolling extensions.
- Onshore Grid Charges (ESB owned connection assets): The cost of the onshore connection assets will be fixed in advance of a Phase 2 auction, based on EirGrid's cost estimates, and communicated to prospective developers by EirGrid. The fixed cost of the onshore connection will be recovered via staged payments prior to energisation. Any difference between the fixed cost and the final outturn cost will be socialised through the Demand Transmission Use of System (D-TUoS) tariffs.
FURTHER EU DEVELOPMENTS
Net Zero Industry Act
The Commission organised a first high-level meeting of the Net-Zero Europe Platform. Composed of representatives from Member States and the Commission, it is intended to oversee implementation of the Net-Zero Industry Act. Four sub-groups focus on: strategic projects and financing, access to markets, permitting and net-zero acceleration valleys, and net-zero academies.
Electricity
- Demand Response: ACER submitted its proposal for a new EU-wide network code on demand response to the Commission. ACER states that demand response is when consumers (retail and industrial) intentionally adjust their electricity consumption in response to a change in the electricity market price or a financial incentive to increase/decrease/shift the timing of their electricity consumption. The Commission will review the proposal and initiate the process of establishing the Demand Response Regulation and amending three related regulations. Further information is available on the ACER website.
- Peak-Shaving: ACER is consulting until 17 April 2025 on the potential impact of developing peak-shaving products on the EU's electricity market under normal market conditions (not just in crisis periods).
- Integration to Internal Market: ACER is consulting until 31 March 2025 on a proposal by the Nominated Electricity Market Operators for Market Coupling Operation integration plans to integrate Energy Community countries in the day ahead and intraday coupling systems.
- Cross-Border Losses: ACER's annual report on the Inter-Transmission System Operator Compensation mechanism indicates that compensation for grid operators increased, and makes recommendations for improvements.
- Digital System: A report on Challenges & Opportunities for the Digital EU Electricity System emphasises the need for digitalisation to enhance grid operation, planning, and customer integration.
Gas
- Hydrogen: The Commission reports that the European Hydrogen Bank's second auction for the production of renewable hydrogen has attracted 61 bids from projects in 11 countries, requesting grant support of €4.8 billion. Terms & conditions for a third auction are expected before the end of 2025.
- Storage: The Commission proposes to prolong the Gas Storage Regulation (EU)2017/1938 until the end of 2027. Further information on the proposal and a Q&A document are available on the Commission's website. Commission Recommendation (EU) 2025/466 on the implementation of the gas storage filling targets in 2025 makes several recommendations on how Member States should comply with their obligations this year.
- Aggregate Purchasing: A second matching round to coordinate gas purchases is underway. Buyers submit and aggregate gas demand for multiple six-month periods running from July 2025 until October 2030.
- Meters: Commission Implementing Decision (EU) 2025/375 amending Implementing Decision (EU) 2021/1402 as regards harmonised standards for gas meters and gas volume conversion devices has been made.
Carbon
- EU ETS2 (buildings, road transport and additional sectors): Commission Delegated Decision (EU) 2025/318 provides for the unilateral inclusion of sectors by Sweden in the EU emissions trading system for buildings, road transport and additional sectors pursuant to Article 30j of the EU ETS Directive 2003/87/EC.
- Social Climate Plans: To access €65 billion of funding to alleviate impacts of ETS2, Member States are to set out Social Climate Plans. The Commission has published two sets of guidance on completing the plans, available on this website page.
Green Claims Directive
The proposed Green Claims Directive would require businesses to meet certain requirements relating to substantiation of green claims or advertising. Trialogue discussion on the Directive are underway and the institutions' positions are available. A latest update on progress of the Directive is available on the Parliament's website.
Cable Security
The EU published an Action Plan on Cable Security, setting out measures designed to bring immediate and short-term responses to the ongoing threats the EU is facing, most notably in the Baltic Sea. Further information on the Action Plan is available here.
Nuclear
A proposal for a Commission Regulation to update the application of Euratom safeguards, the nuclear material supervision system established under the Euratom Treaty, has been approved by the Council. It will enter into force 20 days after publication in the OJEU.
Connecting Europe Facility
In the energy sector, CEF2 contributes to the implementation of projects of common interest. The EU is seeking feedback until 28 May 2025 on the effectiveness, efficiency, relevance, coherence and EU added value of the CEF programme from 2021 to 2024.
FURTHER DOMESTIC DEVELOPMENTS
Legislation
In the Spring Legislative Programme, the Government lists the following for priority publication:
- Gas Safety (Amendment) Bill: The Bill is intended to amend the existing Electricity Regulation Act 1999, focused on ensuring that third party operators of Liquid Petroleum Gas networks are fully incorporated into the regulatory regime. Pre-legislative scrutiny completed in March 2024.
- Marine Protected Area Bill: The Bill is intended to provide for the designation and effective management of Marine Protected Areas in the Irish maritime area.
The Government has listed for priority drafting a Heat (Networks and Miscellaneous Provisions) Bill. It is intended to establish a regulatory model for district heating that ensures consumer protection and the delivery of a vibrant district heating industry, and to mandate all public sector buildings and facilities to connect to district heating where it is available and is technically, and economically feasible. Heads of Bill were approved in October 2024.
Other legislation in the Spring Programme includes a Strategic Gas Emergency Reserve (Amendment) Bill, intended to amend Gas Networks Ireland's functions and introduce the regulatory framework to support strategic gas emergency reserve development.
Private Member's Bill
A private member's Bill, Energy Poverty Reduction (Use of Surplus Renewable Energy) Bill 2025, has been proposed with the intent of requiring the Minister for the Environment, Climate and Energy to develop and publish a strategy to ensure that surplus renewable energy is utilised effectively, specifically for the benefit of people experiencing energy poverty, and to set targets for the utilisation of surplus renewable energy.
Strategic Gas Emergency Reserve
The Government approved development of a State-led strategic gas emergency reserve. It will be in the form of a Floating Storage and Regassification Unit owned by the system operator, GNI.
FURTHER CRU BUSINESS
Smart Meter Data Access Code
A Smart Meter Data Access Code has been published (CRU/2025/16). This is an area in which there are EU regulatory structures relating to both data and energy, and it is intended that domestic codes align with those frameworks.
2025/26 PSO Levy or Payment
An Information Paper for Suppliers on submissions for the 2025/26 PSO Levy or Payment (CRU/2025/09) sets out CRU expectations around timing and information requirements.
Gas PR5
In the context of the GNI's Price Control 5 Decision, the CRU published a decision on terms of reference for the gas network stakeholder engagement evaluation panel 2026 and 2027 (CRU/2025/37).
FURTHER SEMC BUSINESS
Forward Work Programme
The SEMC's forward work programme (SEM-25-003) sets out significant workstreams. All-island governance workstreams include reintegration of the SEM into the EU market; balancing market reform; SEM-GB arrangements; long duration energy storage incentivisation; review of impact of CBAM on SEM; a review of the priority dispatch hierarchy; progressing the scheduling and dispatch programme with the TSOs; progressing the Future Arrangements System Services Project; and Phase II of low carbon inertia services.
Other workstreams are SEM operations; the Capacity Remuneration Mechanism (including a State aid application); market incentivisation (including DSU payments); generation capacity statement and national resource adequacy assessment; dispatch down; and market monitoring.
Bidding
In a letter to industry (SEM-25-003), the SEMC indicates that, in addition to necessary changes required as the markets continue to evolve, the regulatory authorities are prepared (in addition to using their existing powers) to implement additional measures if the following is observed: potential abuses of market power; increases in imperfections costs arising from bidding behaviours; bidding behaviours that do not align with efficient market outcomes; and practices that may adversely impact system security or market stability. The regulatory authorities are required to act intra vires their powers.
Capacity Market
The SEMC is consulting until 21 March 2025 on the proposed Capacity Market Audit scope for the year 6 report (SEM-25-005).
NORTHERN IRELAND
Programme for Government
A Programme for Government has been agreed. It is intended to develop a Climate Action Plan and Renewable Energy Support Scheme.
Offshore
DfE is consulting until 22 May 2025 on the Strategic Environmental Assessment Environmental Report and Report to Inform Appropriate Assessment of the Offshore Renewable Energy Action Plan.
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.
