Energy - Horizon Scanner Infrastructure, Construction, Energy: May 2025

KEY DEVELOPMENTS

RESS 5

The timetable, qualification pack and terms and conditions for the fifth onshore renewable energy support scheme are available. The terms and conditions remain largely unchanged from those in the RESS 4 auction (which we looked at in our briefing: Renewable Electricity: RESS 4 Auction - Arthur Cox LLP).

The RESS 5 terms and conditions contain some clarificatory drafting. Most notably, in the template Implementation Agreement, a Judicial Review Challenge (for which there may be an extension of time for Project completion) includes challenges regarding any associated grid infrastructure required for the operation of the Project. There are also some clarifications in the section on Community Benefits Funds, as well as more details about the information required in the Financial Questionnaire in Annex B of the terms and conditions.

Onshore Grid Connections Policy and Capacity Market Connections

We previously looked at the new connection policy in our briefing: New Connection Policy for Onshore Generators and Storage. We outlined how "RED III Projects" must enter a "Pre-engagement Process" with the system operator ("SO") several months before the Batch Closing deadline. Then, to submit an application for connection, applicants must: (a) include the outcome of the pre-engagement process, namely a "High-level Technical Assessment" ("HLTA"), and (b) provide evidence that the planning authority has acknowledged that a planning permission application that has been made is complete.

The CRU is now consulting until 14 May 2025 on the Pre-Engagement Process and HLTA in its Proposed Decision on Electricity Connection Policy – Generation & System Services: Pre-engagement and High-Level Technical Assessment. There are changes to the timelines for submitting a Grid Application. The CRU proposes that, for the State to comply with the RED III timelines, the Grid Application must be submitted not greater than 15 calendar days following: (i) a project's Planning Application being acknowledged as complete by the relevant planning authority, or (ii) the receipt of the project's HLTA for the relevant batch, whichever is later. In addition, there would be two pre-engagement clinics for applications seeking transmission connections, the latter of which would have to be at least six months in advance of HLTA application. For the initial 30 September 2025 Batch Closing Deadline, the application for a HLTA must be submitted by 15 June 2025, and the HLTA must be issued by the SO by 15 September 2025. The consultation also looks at the approach to conventional generation projects and non-co-located storage projects.

Separately, the CRU directed the SOs to offer a connection to any applicant located in the 'L1-2: Ireland Locational Capacity Constraint Area' that is successful in the T-4 Capacity Auction for 2029/30 and which has provided evidence of granted planning permission for the unit by the Qualification Application Date for the auction.

Interconnection and Offshore Renewable Energy

The Greenlink interconnector began commercial operations, as detailed by the Department of the Environment, Climate and Communications. The Department indicates that consideration will be given to further interconnection required for export of renewable electricity in the context of other uses, such as green hydrogen.

The proposed Mares Interconnection is the subject of a consultation until 13 June 2025 on the CRU's Initial Project Assessment of the MaresConnect electricity interconnector. The CRU considers that the public interest test is met and proposes to, in principle, award the MaresConnect interconnector with a Cap and Floor regime.

The Department also announced that it intends to develop a National Offshore Renewable Energy Designated Maritime Area Plan. It indicates that this is a national spatial plan expected to be completed by the end of 2027.

EU DEVELOPMENTS

Electricity

• Adequacy: ACER's decision on European Resource Adequacy will issue in July 2025.
• Balancing Data: ACER considers that delays in some TSOs joining balancing platforms could delay publication of monitoring reports, and so has suggested that ENTSO-E implement more flexible reporting timelines, while stressing the importance of high-quality balancing data.
• Bidding Zones: TSOs in the Central Europe Region (which Ireland will join) evaluated alternative bidding zone configurations.
• Blackout: A panel involving representatives from TSOs, potentially including EirGrid, is being established to investigate the Iberian blackout.
• Capacity Mechanisms: ENTSO-E looks at the role of capacity mechanisms and also outlines in a paper responding to the Commission's report on streamlining capacity mechanisms, certain principles to ensure robustness of the European Resource Adequacy Assessments ("ERAA"). ENTSO-E is also consulting until 28 May 2025 on how the ERAA can better reflect investment behaviour.
• Cybersecurity: ACER provided guidelines to stakeholders on sharing cybersecurity information in the electricity sector, with a focus on maintaining confidentiality.
• Energy Communities: A facility to support local energy communities in developing business plans is available.
• Flexibility: ACER is to assess, by 16 July 2025, proposals on the national flexibility needs assessment methodology. Once approved, the methodology is binding for national assessments to be delivered by July 2026, following which Member States must set national non-fossil flexibility targets by January 2027.
• Grids: A DSO/TSO Technopedia platform has been launched under the Action Plan for EU Grids to feature technologies available to system operators, along with use cases and deployments. It will be open to stakeholders to submit applications on specific use cases by an initial deadline of 30 June 2025.
• Harmonised Allocation Rules: ACER is consulting until 22 May 2025 on the TSOs' proposal to amend harmonised allocation rules for long-term transmission rights (including amendments to account for 15-minute trading periods).
• Industrial Framework: ENTSOE-E calls for leveraging of existing legislation (Clean Energy Package and Electricity Market Design reform) in its response to the Commission's proposed Clean Industrial State aid Framework.
• Intraday Cross-Zonal Gate Closure: ENTSO-E is consulting until 24 May 2025 on an amendment to the TSOs' methodology for intraday cross-zonal gate opening and gate closure times.
• TYNDP: ENTSO-E invites promoters to submit transmission and storage infrastructure projects for inclusion in the Ten-Year Network Development Plan 2026.
• Work Programme: ENTSO-E is consulting until 20 May 2025 on its annual work programme.

Gas

• Annual Report: ENTSOG's Annual Report is available, which includes its new tasks under the Fourth Gas Package.
• Security of Supply: A REPowerEU Roadmap towards ending Russian energy imports was published by the Commission. As well as a stepwise prohibition on gas imports, actions include supporting diversification by demand aggregation and better use of infrastructure.
• Storage Regulation: The Council and the Parliament published negotiating mandates for revision of the Gas Storage Regulation, intended to extend by two years the relevant gas storage filling requirements.
• Wholesale Markets: ACER reported on winter trends, including in relation to storage dynamics.

Carbon

• EU ETS2: Finland has identified the additional sectors it will include in the new emissions trading system for buildings, road transport, and additional sectors.
• Industry: The Commission is calling for evidence until 8 July 2025 for an impact assessment and consultation on an Industrial Decarbonisation Accelerator Act, aimed at speeding up decarbonisation.
• Vehicle Emissions: Legislative changes were approved by the Council and by the Parliament to allow car manufacturers' emissions targets for 2025, 2026, and 2027 to be assessed based on an average of the performance of each manufacturer over the three years instead of annually.

Consumers

• Electrical Appliances: Updated limits of energy consumption for electrical appliances in standby modes apply from 9 May 2025 under EU rules on electrical appliances in standby.
• Empowering Consumers: The Council of European Energy Regulators has made available a recording of its Consumer Focus event on empowering consumers in the energy transition.
• Market Functioning: The Council of European Energy Regulators is consulting until 7 May 2025 on an updated Handbook for National Energy Regulators – How to assess retail market functioning.

Interconnection

The Commission has published an update on the Biscay Gulf Interconnection Project, which is receiving a CEF Energy grant of over €500 million.

Heating and Cooling

The Commission published guidance on heating and cooling aspects in Articles 15a, 22a, 23, and 24 of the Renewable Energy Directive.

Critical Raw Materials

The EU and UK agreed that three more Regulations will be added to the Windsor Framework (and apply in Northern Ireland), including the Critical Raw Materials Regulation. A statement by the Minister for the Cabinet Office, Nick Thomas-Symonds MP, indicates that consideration is also being given to adding the Cyber Resilience Regulation to the Windsor Framework. Separately, the Commission published a list of projects recognised as Strategic Projects under the Critical Raw Materials Regulation. This status attracts certain entitlements to streamlined and predictable permitting procedures and support in gaining access to finance.

Cross-Border Projects

An EU renewable energy financing mechanism aims to better support renewable energy projects by facilitating collaboration between "contributing" and "hosting countries". The Commission announced that Luxembourg is acting as a contributing country by providing financial resources (€52 million), and Finland and Estonia are acting as hosting countries by offering suitable sites for the development of nine renewable energy projects.

Cross-Border Regions

A proposed Regulation on a Border Regions' instrument for development and growth is intended to establish cross-border coordination points to tackle obstacles impacting any infrastructure necessary for public or private cross-border activities or services. While it would not apply to border regions between Member States and third countries, the draft indicates that it should be possible to set up equivalent procedural frameworks under national law to identify and resolve legal and administrative cross-border obstacles in cooperation with third countries.

REMIT

ACER made recommendations following energy market surveillance in relation to persons professionally arranging transactions and the activities of regulatory authorities. These include that REMIT surveillance functions should be clearly separated with specialised staff and tools to reduce conflicts of interest and improve performance. ACER also responded to the Commission's consultation on the functioning of the commodity derivatives markets.

DOMESTIC DEVELOPMENTS

2050 Targets

The Irish Academy of Engineers reported that Ireland is not on track to deliver the infrastructure needed to meet its climate targets: The Energy Transition – What is the 2050 Action Plan and Timeline?

Carbon Budgets

The Government is consulting until 4 June 2025 on the Climate Change Advisory Council's latest recommendations for the Carbon Budget periods 3 (2031 – 2035) and 4 (2036 – 2040), with a view to informing the Minister's recommendation to Government on budgets to be approved. (Note that the consultation document states that the closing date is 5 June 2025, but the webpage states that the closing date is 4 June 2025.)

Legislative Programme

In the Government's Summer Legislation Programme, bills for priority publication include the Gas Safety (Amendment) Bill, the National Cyber Security Bill, and the Marine Protected Area Bill. Bills for priority drafting include the Heat (Networks and Miscellaneous Provisions) Bill, Strategic Gas Emergency Reserve (Amendment) Bill and Energy Performance of Buildings Bill.

Offshore Legislation

The Merchant Shipping (Investigation of Marine Accidents) Act 2025 provides for the dissolution of the Marine Casualty Investigation Board and for its replacement with a unit within the Department of Transport to be known as the Marine Accident Investigation Unit. It provides for the investigation and reporting of marine accidents and the regulation of offshore service vessels. The Department of Transport published a press release on the Act: Minister welcomes Act to progress offshore renewable energy ambitions.

CRU BUSINESS

Natural Gas Supply Licences

The CRU intends to modify all natural gas supply licences to implement its decision paper on Specification of Standards of Performance in Natural Gas Supply Licences (CRU/2022991). The CRU requires any representations or objections to be made by 28 May 2025. The amendments specify certain conditions in the licence as a standard of performance in connection with the supply of natural gas to final customers in accordance with section 16(4A)(a) of the Gas (Interim) (Regulation) Act 2002. They also require compliance with the Electricity and Gas Suppliers Handbook issued by the CRU.

Gas Transmission Tariff Methodology

The CRU is consulting until 20 May 2025 on the Gas Transmission Tariff Methodology for the tariff year 2025/6. It intends to publish tariffs for the next gas year by the end of May or early June 2025.

Price Comparison

The CRU is consulting until 4 July 2025 on a review of the accreditation framework for price comparison websites.

NORTHERN IRELAND

Legislation

The Department for the Economy published its consultation report on the proposed Utility Regulator (Support for Decarbonisation Preparation) Bill. The Bill is intended to allow the Regulator to support the Department in fulfilling obligations under Climate Change Act (Northern Ireland) 2022.

NORTHERN IRELAND

UK CBAM

The UK Government is carrying out a technical consultation until 3 July 2025 on the draft legislation for a UK Carbon Border Adjustment Mechanism. The UK intends to begin operating a CBAM from 1 January 2027. Unlike the EU, the UK does not propose to include electricity in its CBAM.

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.