What's Another Year 2026 - Energy And Infrastructure

Decarbonisation targets

Ireland's second carbon budget began on 1 January 2026 and runs until the end of 2030, aimed at reducing greenhouse gas emissions by 51% compared to 2018. While emissions in the energy sector in Ireland were at their lowest rate in 30 years, Ireland failed to achieve the targeted emissions reductions across all sectors during its first carbon budget. The excess will be carried over to the second carbon budget.

The Environmental Protection Agency indicates that, while emissions in the EU ETS sectors decreased by 49.7% since 2005, Ireland continues to miss targets under the Effort Sharing Regulation. While Ireland is on track for electricity decarbonisation targets under the Renewable Energy Directive, acceleration is needed in heating and transport to meet the overall renewable energy target.

The Fiscal Advisory Council estimation that Ireland could pay up to €20 billion by 2030 to cover the cost of statistical transfers, carbon credits or fines, therefore remains relevant. Legislative and regulatory reform is a centrepiece of the Government's Accelerating Infrastructure Report and Action Plan which is to be undertaken throughout 2026.

Enabling infrastructure

Grid

Significant investment in the grid is required to support our energy and decarbonisation ambitions. For the period 2026–2030, there is approval under Price Review 6 for €13.8 billion in baseline allowances for the electricity system operators, an 80% increase on current outturn expenditure, and Exchequer investment of €3.5 billion to facilitate grid development.

Greater focus is also being brought to grid flexibility, with norms around flexible connection agreements now enshrined in the Internal Market in Electricity (IME) Directive and expected to be implemented in 2026.

Development in 2026 of the European Grids package will include legislative and non-legislative measures. The legislative proposals are: (i) a Directive amending the Renewable Energy Directive, IME Directive and Internal Market in Gas Directive to accelerate the permitting of energy infrastructure projects, including transmission and distribution grids, storage and recharging stations and renewable energy projects, and (ii) a revised Trans-European Network for Energy (TEN-E) Regulation to improve development and interoperability of energy infrastructure across the EU. The legislative proposals now pass to the European Parliament and the Council, with first readings beginning in early 2026 followed by trilogue negotiations between the European Parliament, Council and Commission.

Our grid connection policy for generation and system services will continue to bed down throughout 2026, along with the Firm Access policy, relating to a status relevant to compensation for redispatch. New guidance is available: Getting Connected - Delivery Phase of Onshore Contestable Projects.

Potential constraint volumes remain a risk for projects but this can be managed in an economically efficient way with appropriate long-term policies. The entitlement to compensation under Article 13(7) of the IME Regulation was vindicated in the High Court in Ireland in judgments here and here, which are subject to appeal, anticipated to be heard in early 2026.

Hybrid connections

Development of market and grid rules is expected to unlock the significant benefits of co-locating renewable energy technologies and/or storage and allowing for hybrid units. The outcome of the consultation on dynamic sharing of maximum export capacity behind a single connection is expected in 2026. We considered the consultation in our briefing: Potential impact of hybrid connection proposal on priority dispatch.

Private wires

The Government Policy Statement, which we looked at in our briefing - Energy update: private wires policy statement - is anticipated to be implemented in 2026 by way of amendment to the Electricity Regulation Act 1999, as indicated by the General Scheme for a Private Wires Bill. A clear pathway for permitting private wires is intended to support development of renewable generation capacity, as well as increasing supply options for large energy customers.

Interconnection

The Celtic Interconnector is expected to commercially go live in Q1 2028. Until then, preparations for re-integration of the Single Electricity Market (SEM) into EU market and system rules will continue under Future Power Markets (Strategic Markets Programme workstream).

The Programme for Government includes a commitment to accelerate the roll out of interconnectors. As 2025 drew to a close, the European Commission announced that MaresConnect, as well as the North-South Interconnector, are Projects of Mutual Interest under the TEN-E Regulation, giving them eligibility to apply for EU financing and benefit from expedited permitting and regulatory processes. MaresConnect is targeting operation in 2029. The LirC Interconnector project is targeting commissioning in 2032.

Exploratory talks for the UK's possible participation in the EU's internal electricity market concluded and negotiations to set out the necessary framework are to take place in 2026. Post-Brexit trading arrangements with Great Britain are being progressed in Ireland in the Future Power Markets (Strategic Markets Programme workstream).

Renewable energy in EU law

It is hoped that Ireland will fully implement the permit-granting procedure obligations for renewable energy projects under the Renewable Energy Directive, having received a letter of formal notice for failing to fully so do.

Provisions on renewable acceleration areas were required to be transposed by 21 May 2025 and a preparatory mapping exercise done by 21 May 2025. It is expected in 2026 to see a decision on DCEE's public consultation on national territory mapping for renewable electricity.

The Minister for Climate, Energy and Environment confirmed that a programme of work is underway to transpose the requirements of the Directive as soon as possible, with a particular immediate focus on requirements for permitting.

Renewable energy is increasingly mainstreamed in the electricity internal market legislative framework, and so implementation of the changes to the IME Regulation and Directive is also necessary. Further information is available in our briefing: New Internal Market in Electricity legislation to come into effect.

Renewable energy

Offshore

Phase 1 development of offshore wind projects will continue in 2026. Decisions on asset treatment for ORESS 1 projects and for merchant projects are available. The outcome of the consultation on draft transmission connection and asset sale and purchase contracts is awaited and the consultation on the Guarantee of Availability Regime is anticipated in H2 2026.

Phase 2 development kicks off with results of the ORESS Tonn Nua auction.

For next phases of development, a proposal on the national offshore renewable energy Designated Maritime Area Plan (DMAP) has been published with the following indicative timeline:

• Q1 2026-Q1 2027: pre-draft targeted consultation and ongoing dialogue,
• Q1-Q3 2027: formal public consultation, and
• Q3-Q4 2027: finalisation of DMAP including submission of final plan and assessments to the Oireachtas.

Onshore auctions

2026 will see a sixth onshore renewable electricity support scheme (RESS 6), this time incorporating the non-price criteria in the Net-Zero Industry Regulation and Implementing Regulation. We look at the decision arising from the consultation on non-price criteria here: Renewable energy update: non-price criteria decision.

Repowering

Ireland risks losing existing generation capacity unless stakeholders collaborate in 2026 to maintain existing renewable generation capacity through the timely and pragmatic permitting of repowering of existing plant (which is included in the connection policy).

Large energy customers

Connection policy

2026 will see collaboration between the renewable energy and digital infrastructure sectors driven by the terms of the new policy which we considered in our briefing: New connection policy for data centres in Ireland.

Nuclear energy

At EU level, the focus on nuclear energy will continue to increase. The European Commission will in 2026 assess the streamlining of licensing practices for nuclear energy technologies such as small modular reactors (SMRs) and publish an SMR Communication, as indicated in the Action plan for affordable energy which we looked at in our briefing: Clean industrial deal: crucial role of the energy sector.

System services, flexibility and customers

How system services are valued in the context of an energy system transitioning to net zero will be critical to securing adequate investment. Their benefit to the system is not likely adequately reflected by an energy wholesale market price and this is recognised in amendments to the IME Regulation.

Future arrangements for system services

Work continues on development of a Day Ahead System Services Auction and a Layered Procurement Framework, with a current targeted go-live date of May 2027. Pending implementation of new arrangements, the SEM Committee decided to allow the extension of the System Services Regulated Arrangements out to a long stop date of 30 September 2027. For products in respect of which competitive procurement is established ahead of that date, tariff payment will cease. Updates on preparations for new arrangements are available here: Future Power Markets (Future Arrangements for System Services workstream).

Long Duration Energy Storage (LDES)

The Government's electricity storage policy framework earmarks 2024-2027 to support market access, arbitrage and revenue stacking, and identifies several actions over the course of the next years culminating, for example, in having a route to market in place by 2028.

The outcome of the CRU's consultation on procurement of LDES is expected in Q1 2026.

Further information is in our briefing: Energy update: Long Duration Energy Storage.

It is anticipated that there will be a second consultation on contractual arrangements, technical criteria and evaluation criteria in Q2 2026; a decision on the second consultation in Q4 2026; an LDES procurement round in Q1 2027; and execution of contracts in Q4 2027. Updates on preparations for new arrangements are available here: Future Power Markets (Additional Market Developments workstream).

Demand side units

The IME Regulation and Directive include rules for demand response including, for example, that dispatch must be non-discriminatory, transparent and market based. In Ireland, it is expected that the National Energy Demand Strategy will continue to be implemented. Next steps in the consultation on a revised Phase 1 solution for energy payments remain to be seen.

At EU level, the outcome of the European Commission's consultation on ACER's proposal for an EU-wide network code on demand response established under the IME Regulation is expected in 2026.

Hydrogen, renewable gas and natural gas

Stakeholders would welcome transposition of the Directive for renewable gas, natural gas, and hydrogen in advance of the deadline of 5 August 2026. The Recast Regulation has applied in Ireland since 5 February 2025. We consider the new framework in our briefing: EU provides legal framework for regulation and decarbonisation of the gas sector.

Gas Networks Ireland's plan to move to a repurposed, decarbonised gas network by 2045 is available: Pathway to a Net Zero Carbon Network.

Ireland's National Biomethane Strategy targets 5.7TWh of indigenously produced biomethane annually by 2030. The Government intends to support it through a renewable heat obligation to be introduced for 2026-2045 based on Heads for a Renewable Heat Obligation Bill. It would oblige suppliers of fossil fuels used for heat to demonstrate that a proportion of the energy they supply is from a renewable source. We look at the sector in our briefing: Biomethane: Guide to project development in Ireland.

Energy efficiency

It is expected that 2026 will see transposition of the Recast Energy Efficiency Directive, given that the deadline was 11 October 2025. A series of Commission recommendations and guidance notes on transposing the provisions is available here: Energy Efficiency Directive.

The Directive includes changes to obligations on companies to carry out energy audits or implement energy management systems. Depending on how requirements are transposed, more companies may be within the scope of these rules. We look further at energy audits and energy management systems in our briefing: Energy management systems and energy audits: New rules under the Recast Energy Efficiency Directive.

Renewable energy in buildings, transport and industry

Buildings and industry

Transposition of the Recast Energy Performance of Buildings Directive in Irish law should be done by the main deadline of 29 May 2026. We looked at the Directive here: How to get a net-zero building stock: Q&As on the Recast Energy Performance of Buildings Directive. Obligations to drive production and use of renewable energy in buildings under the Renewable Energy Directive are also required to be transposed. Amendments to the Renewable Energy Directive also strengthen targets and obligations to mainstream renewable energy in industry.

Renewable heat obligation

It is anticipated that a Renewable Heat Obligation will be put in place from 2026.

District heating

Developing a framework for district heating in Ireland continues as legislation is drafted based on the General Scheme for a Heat (Networks and Miscellaneous Provisions) Bill. Regulations are now also in place to support Guarantees of Origin in district heating and cooling.

Transport

Obligations on the State to ensure specified levels of coverage of publicly available electric vehicle charging and hydrogen refuelling begin from the end of 2025 under the Alternative Fuels Infrastructure Regulation. The Regulation also imposes obligations on EV charging operators, owners and mobility service providers, outlined in our briefing Electric vehicle charging: new obligations.

The Measuring Instrument Directive is being amended to introduce harmonised metrology requirements for EV charging stations. Amendments will introduce harmonised requirements for EV supply (charging) equipment measuring systems across residential, commercial and light industrial settings. Once published in the Official Journal, Member States will have 24 months to implement the provisions, which will apply six months after that. The Council's press release is here: Technical harmonisation: Council and Parliament strike a deal to update the requirements of measuring instruments.

Transposition of the Recast Energy Performance of Buildings Directive in Irish law is required by 29 May 2026, and it includes new obligations on recharging infrastructure for buildings. Amendments to the IME Directive, including around connection to the distribution network of publicly accessible and private recharging points as regards smart charging and bidirectional charging functionalities, also now need to be implemented.

A Renewable Transport Fuel Policy 2025-2027 sets out action aimed to achieve the renewable energy share in transport under the Renewable Energy Directive.

Carbon

EU emissions trading system

The Commission will negotiate in 2026 with the UK on linking the EU and UK emissions trading systems.

Pricing carbon in fuel for buildings and transport

The EU Emissions Trading System 2 (ETS2) imposes a cost of carbon on suppliers of fossil fuels used for buildings and road transport. The EPA is the national competent authority. Monitoring and reporting requirements currently apply but the EU co-legislators have agreed to postpone full operation by a year to 2028.

Pricing carbon in imported electricity

Obligations for importers of certain goods (including electricity) into the EU under the Carbon Border Adjustment Mechanism (CBAM) ramp up as the CBAM becomes fully operational on 1 January 2026, albeit with certain aspects simplified, as we outlined in our briefing: Carbon Border Adjustment Mechanism: Simplification and Next Steps. Further information is available here: Carbon Border Adjustment Mechanism. Detailed requirements are in a number of new Implementing Acts: CBAM Legislation and Guidance. As outlined in our Construction section, 2026 will see the European Commission progress further changes to the CBAM in terms of scope and anti-circumvention measures: CBAM: Consultation on Implementing Regulations

Imports of electricity to the UK are not included in the UK's CBAM. Linkage of the EU ETS and UK ETS, however, should lead to goods originating in both jurisdictions benefiting from mutual exemptions under the respective CBAMs. It has been reported that the Department of Climate, Energy and the Environment is considering the impact of the CBAM on the SEM.

Carbon capture and storage

A new Regulation on carbon transportation infrastructure and markets is to be developed in 2026, the European Commission having recently sought evidence to impact assess a legislative proposal. Use of carbon credits and removals, as well as enhanced flexibility across sectors, will provide additional paths to meeting Member State targets under amendments to the EU Climate Regulation, due to be formally adopted and published in the Official Journal in early 2026.

Security of supply

Strategic gas emergency reserve

Gas Networks Ireland intends to develop a Strategic Gas Emergency Reserve at Cahiracon, Co. Clare, in the form of a floating storage regasification unit. Site acquisition and design phase will be underway in 2026. Other actions under the Energy Security Strategy are expected to continue into 2026.

EU

The European Commission is reviewing its energy security framework (the Gas Security of Supply Regulation and Electricity Risk Preparedness Regulation, as well as instruments impacting energy security such as the Oil Stockholding Directive, Critical Entities Resilience Directive, and the Net-Zero Industry Act) and is expected to propose revisions in 2026 with the aim of reinforcing the capacity of the EU energy system to anticipate and respond to challenges. Regulation (EU) 2017/1938 on measures to safeguard the security of supply of gas has been extended until the end of 2027 (although certain obligations do not apply to Ireland as long as it is not directly connected to another Member State) and further amendments will be published in the Official Journal in early 2026 to phase out imports of Russian natural gas to the EU.