Horizon Scanner: Energy, Planning, Infrastructure And Construction January 2026 - Energy And Infrastructure

Key developments

NON-PRICE CRITERIA IN RENEWABLE ENERGY AUCTIONS

The initial decision on non-price criteria is available: Initial Decision on NZIA RESS (257 KB). We consider the decision in our briefing: Renewable Energy Update: Non-Price Criteria Decision.

LARGE ENERGY USER ACTION PLAN

The Government published a Large Energy User Action Plan. It prepares for a plan-led approach to the location of very large energy user sectors in Ireland, especially in the period beyond 2030, including by identifying green energy park locations to facilitate co-locating intensive industrial developments with indigenous renewable energy supply. The plan identifies 17 enabling actions, which are listed with timelines on page 23 (6.9 MB).

CONNECTION POLICY

The decision of the Commission for Regulation of Utilities ("CRU") on connection to the electricity grid for data centres is available: Review of Large Energy Users Connection Policy. We consider the policy in our briefing: New connection policy for data centres in Ireland.

PRIVATE WIRES

The General Scheme, which will be the basis of the Private Wires Bill to be drafted this year, has been published: Private Wires Bill 2025 – General Scheme and Regulatory Impact Analysis. The Private Wires Bill is intended to implement the Government Policy Statement, which we looked at in our briefing: Energy update: private wires policy statement.

The intention is to amend the Electricity Regulation Act 1999 to give powers to the CRU and to provide for permitting either by way of:

• a private wire licence under section 14,
• a private wire's permission, or
• an authorisation from a local authority for private wires relating to EV charging infrastructure.

It also sets out a new regime to regulate internal collector cable systems, defined as "the collector system of cables used to consolidate the power generated by individual units of a single generation project for the purpose of export via a single grid connection point".

PR6

The CRU published a final decision on Price Review 6, which sets the allowed revenues for the electricity system operators in Ireland. It approved €13.8 billion in baseline allowances for 2026–2030, an 80% increase on current outturn expenditure in Price Review 5. This increase is intended to support the delivery of a secure, resilient and low-carbon electricity system.

EUROPEAN GRIDS PACKAGE

As indicated last month, the European Commission published a Communication on the European Grids Package the aims of which include improving long-term planning, incentivising optimal grid use, and supporting grid build out. In addition to legislative proposals (a Directive amending the Renewable Energy Directive, IME Directive and Internal Market in Gas Directive to accelerate the permitting of energy infrastructure projects and a revised Trans-European Network for Energy (TEN-E) Regulation to improve development and interoperability of infrastructure across the EU), the following guidance documents have been published:

Grid connection

Guidance on efficient and timely grid connections aims to provide Member States, regulatory authorities, TSOs and DSOs with a toolbox of measures to prevent, optimise and tackle lengthy grid connection queues. The guidance addresses the following identified problem areas: inadequate grid planning and development; lack of transparency on available capacity and of locational signals for grid users; and grid connection procedures.

Grid optimisation

Guidelines on future proof network charges for reduced energy system costs set out the legal framework relating to tariff-setting noting, for example, that the legislation now requires a total expenditure ("TotEx") approach to encourage holistic thinking about system needs and the most efficient solutions to meet these needs. While the principle of cost-reflectiveness remains key for the design of network tariff methodologies, the application of this principle needs to reflect the changing needs of the electricity system as regards the integration of renewable generation, rising levels of network congestion and rising flexibility needs. Behaviour to optimise the use of the system should be incentivised and inefficient redispatch down needs to be avoided. Individual design elements, including those in relation to storage, are considered.

Grid and storage infrastructure necessary to integrate renewable energy

Guidance is set out on the establishment of areas for grid and storage infrastructure necessary to integrate renewable energy into the electricity system in line with Article 15(e) of the Renewable Energy Directive, including in relation to the identification of dedicated infrastructure areas and assessing the existence of significant environmental impacts.

Design of two-way CfDs

Guidance on the design of two-way contracts for difference states that they will need to be smartly designed to ensure that the electricity market functions efficiently, and that supported assets are integrated into the market while keeping system costs under control and fostering competition. The guidance sets out the legal framework relating to electricity CfDs and looks at how they can be designed to avoid distortion in the markets, and preserve incentives for efficient maintenance decisions, market participation, and optimal investment decisions.

INNOVATIVE TECHNOLOGY

The European Commission published guidance on innovative technologies and forms of renewable energy deployment. It notes that all forms of renewable energy deployment will be required to achieve the targets. It focuses on the identification of regulatory and non-regulatory barriers, good practices for lifting these barriers and financial frameworks.

The guidelines state that the revision of maritime use regulations provides opportunities to promote floating offshore wind and ocean energy and that, when revising the maritime spatial plans, Member States could consider designating areas for innovative renewable energy technologies. It is worth noting that the European Commission intends to introduce an 'Ocean Act' to update the current Maritime Spatial Planning Directive: A call for evidence runs until 9 February 2026. The Commission will launch a public consultation in Spring 2026.

UK TRADING IN ALL ELECTRICITY MARKET TIMEFRAMES

A proposed Council Decision setting out the mandate for negotiations for UK participation in the internal electricity market of the EU has been published, following conclusion of exploratory talks.

CBAM

As mentioned in our construction section, obligations for importers of certain goods (including electricity) into the EU under the Carbon Border Adjustment Mechanism ramp up as it became 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 published on 17 December 2025, available here: CBAM Legislation and Guidance.

It has been reported that the Department of Climate, Energy and the Environment is considering the impact of the CBAM on the SEM. In addition, planned linkage of the EU and UK Emissions Trading Systems should lead to goods originating in both jurisdictions benefiting from mutual exemptions from their respective CBAMs.

The European Commission is also progressing plans to further develop the CBAM and it has published a proposed Regulation which aims to:

• improve rules for attributing emissions to electricity with the aim of encouraging the decarbonisation of electricity imports,
• extend the scope of the CBAM to products further down the value chain of steel and aluminium products,
• tackle attempts to avoid compliance with the CBAM, and
• where needed, provide some simplifications and improvements to the application of the mechanism and to allow for a CBAM integrated area with the EEA EFTA countries.

The Commission also published a proposed Regulation establishing a Temporary Decarbonisation Fund (642 KB) to provide targeted financial support to energy-intensive industries exposed to remaining risk of carbon leakage. Support will be conditional on decarbonisation investments.

CAPACITY MARKET

The SEMC is consulting until an extended deadline of 27 February 2026 on options for reducing carbon emissions within the existing Capacity Remuneration Mechanism. It is proposed to either introduce: (i) a green bonus such as an extension of contract duration for capacity units that meet defined low-carbon criteria, including emissions thresholds and hydrogen-readiness; or (ii) a green scalar, such as a multiplier applied to the Capacity Payment Price based on a unit's carbon emissions intensity, incentivising lower-carbon technologies. In addition, there are two supporting proposals based on emissions data publication and/or requiring a formal decarbonisation declaration from bidders with fossil-fuel based capacity.

ENERGY SHARING AND MULTIPLE SUPPLY CONTRACTS

The CRU is consulting until 31 March 2026 on a conceptual design for energy sharing and multiple supply contracts as provided for at Articles 4 and 15a of the IME Directive.

The CRU envisages energy sharing (a defined term in the Directive) taking two separate forms: via bilateral agreement or via an Energy Sharing Organiser (an organisation whose primary purpose would be to manage energy sharing arrangements on behalf of its registered members).

The CRU also envisages two potential solutions for the implementation of multiple supply contracts. Option 1 would allow customers to enter into multiple supply contracts with multiple suppliers at a single connection point. Option 2 could allow customers to avail of multiple supply contracts at a single connection point, with the same supplier.

Further EU developments

REFORM OF ENERGY UNION GOVERNANCE

The European Commission is consulting until 12 March 2026 on the revision of the Energy Union Governance Regulation. It is intended to publish a legislative proposal in the last quarter of 2026. The aim is to incorporate new priorities like affordability and competitiveness. The consultation states that National Energy and Climate Plans must become investment plans that direct public and private funding to where it is most needed. Options include reviewing the type of information required in the plans, including investment needs and their financing. It will also be explored how to make use of key performance indicators.

ELECTRICITY

• Balancing service providers: ACER is consulting until 23 February 2026 on the TSOs' proposals to amend how balancing service providers ("BSPs") participate in balancing markets. The focus of the proposals is the harmonisation of the BSP's prequalification process, which ensures that power generation or demand units meet the technical and operational requirements to provide balancing services.
• Cost-sharing: ACER is reviewing EU mechanisms for sharing the costs and benefits of electricity network infrastructure arising from cross-border trade, including the inter-transmission system operators compensation mechanism, and has reported on the implementation of the mechanism in 2024.
• Intraday gate closure: ACER approved TSO proposals on a 30-minute gate closure time. From 1 January 2026, the first TSOs will start implementing this gate closure time, with full rollout subject to national regulatory decisions.
• Metering and consumption data: EU Implementing Regulation (EU) 2023/1162 lays down interoperability requirements and rules for non-discriminatory and transparent procedures for access to electricity metering and consumption data by final customers and eligible parties in accordance with the IME Directive. It establishes a reference model for metering and consumption data that sets out the rules and procedures that Member States should apply. It lists the roles and responsibilities of the relevant electricity market participants.
• Smart-grid performance: An ACER paper introduces output performance indicators to measure the performance of grid-enhancing technologies in transmission.

GAS

• Cost efficiency comparison: ACER is required to carry out periodic cost comparison assessing the efficiency of gas TSOs across the EU. ACER has begun this process and outlines the next steps here: First step towards mandatory EU-wide cost efficiency comparison.
• Security of supply: The European Parliament adopted the Regulation banning import of spot-market Russian liquefied natural gas once the regulation enters into force in early 2026 and phasing out pipeline gas imports by 30 September 2027. It is still to be formally endorsed by the Council. The Commission is to present legislation in early 2026 to ban Russian oil imports by late 2027.

CARBON

• EU/UK: Formal negotiations are planned to link the EU and UK Emissions Trading Systems.
• EU ETS: Decision C/2025/7599 instructs changes to national allocation tables notified by several Member States, which provide free allocation of emission allowances to new entrants and adjust free allocations for incumbent installations. Revised auction calendars are also available.
• EU CBAM: see above under 'Key Developments'.

CONNECTING EUROPE FACILITY

The Council agreed its positionon operational provisions to be included in the proposed Regulation establishing the Connecting Europe Facility 2028–2034. Technical amendments have been made to energy provisions, for example, to include connection to the distribution or transmission grid in the definition of cross-border project. Wording was inserted to ensure that the geographical specificities of Member States, including island Member States, are taken into account. The Council will now need to reach agreement with the Parliament. The Council's press release is here: MFF: Council adopts partial mandate on the Connecting Europe Facility (CEF III).

RENEWABLE ENERGY DIRECTIVE

The Commission is consulting until 26 January on a Delegated Directive amending Annexes V and VI of the Renewable Energy Directive as regards rules for calculating the greenhouse gas impact of biofuels, bioliquids and biomass fuels and their fossil fuel comparators. It intends to adopt the Delegated Directive in Q4 of 2026.

CONSUMERS

Findings of a flash Eurobarometer survey include that protecting vulnerable consumers and those in energy poverty tops Europeans' concerns, and that only one-third of respondents fully understand all parts of their energy bills. The Commission has set up an energy poverty advisory hub.

REGULATORY PRIORITIES

The strategy of the Council of European Energy Regulatory for 2026-29 identifies three strategic priorities: optimising market-oriented solutions to deliver the best results for consumers and the energy system; empowering and protecting consumers; and deepening the integration of a decarbonised energy system. ACER's multi-annual work programme 2026-2028 is also available.

CRITICAL ENTITIES

The European Commission opened a call for proposals until 31 March 2026 for projects to support the implementation of Directive (EU) 2022/2557 on the resilience of critical entities. The available budget is €15 million.

ENERGY SECURITY

A Commission staff working document on EU energy security indicates areas likely to be tackled in the revision of the energy security framework: simplification, adaptation, integration, and transparency and supervision (see para. 5.2).

REMIT

ACER is consulting until 9 February 2026 on the potential benefits of applying the ISO 20022 standard to the Exposure XSD reporting format.

Further domestic developments

ENERGY EFFICIENCY OBLIGATION SCHEME ("EEOS")

European Union (Energy Efficiency Obligations Scheme) Regulations 2025 (303kb) (S.I. 683 of 2025) are made to update the EEOS in line with the requirements of the Recast Energy Efficiency Directive (EU) 2023/1791. They revoke European Union (Energy Efficiency Obligation Scheme) Regulations 2022 (S.I. No. 522 of 2022).

Under the EEOS, large suppliers and distributors of energy (Obligated Parties) must achieve annual energy efficiency savings (by undertaking qualifying actions such as energy efficiency upgrades for customers).

The structure is similar to the previous EEOS. The total EEOS target for the obligation period up to the end of 2030 is increased from 36,424 GWh to 39,647 GWh cumulative end-use energy savings. There are also updates to the requirements around qualifying actions. A new Regulation 18 gives powers to the Minister or SEAI to require any public body or implementing public authority responsible for administering or monitoring an energy related policy measure to provide information needed for various purposes, for example to calculate eligible energy savings in line with the Directive, or to assess compliance with the Directive.

ELECTRICITY METERING DATA

European Union (Internal Market in Electricity) (Amendment) Regulations 2025 (163 KB) have been made to implement EU Implementing regulation - 2023/1162, which lays down interoperability requirements and rules for non-discriminatory and transparent procedures for access to electricity metering and consumption data by final customers and eligible parties in accordance with the IME Directive.

SPRING LEGISLATION PROGRAMME

Bills relevant to the energy sector included in the Spring legislation programme (508 KB) for priority publication include a Strategic Gas Emergency Reserve (Amendment) Bill and a Critical Infrastructure Bill. Bills for priority drafting include a Private Wires Bill, a Renewable Heat Obligation Bill, a Heat (Networks and Miscellaneous Provisions) Bill, an Energy Performance of Buildings Directive Bill, a Maritime Area Planning (Marine Protected Areas) (Amendment) Bill, a Hydrogen Bill, a Geothermal Energy Bill, and a Strategic Gas Emergency Reserve (Amendment) Bill.

CRU business

OFFSHORE PHASE 1

The CRU intends to assume the role of monitoring and overseeing the progress of EirGrid and the Phase 1 projects through the staged gateways and relevant milestones through to asset handover. The previously allocated technical advisor role is withdrawn.

NON-DOMESTIC GAS WORKS

The decision on the regulation of non-domestic gas works carried out through the Registered Gas Installer ("RGI") scheme is available. The CRU indicates that it is expected that, from 1 September 2026, only RGIs will be permitted to carry out non-domestic gas works.

GAS PRICE CONTROL 5

The CRU published an Information Paper on GNI's PC5 Reporting and Incentive Framework for the 2023/24 gas year.

CORE CAPACITY CALCULATION REGION

The CRU approved the third amendment to the Core Capacity Calculation Region fallback procedures (351 KB) including shadow allocation rules, under the Capacity Allocation and Congestion Management Regulation. A main goal is to harmonise the shadow allocation rules across all European bidding zone borders where they are used as a fallback when single day-ahead coupling fails.

RISK PREPAREDNESS

The CRU published Ireland's electricity sector risk preparedness plan for 2026-2029 as required by Article 10 of the Risk Preparedness Regulation (EU) 2019/941.

SEMC business

STRATEGY

The SEMC expects to publish a new strategy in the first part of 2026, along with a forward work programme. In the meantime, it has provided an overview of ongoing workstreams that will continue up to the end of March 2026.

CAPACITY MARKET

The SEMC decided to make modifications to the Capacity Market Code following on from two proposals concerning registration and qualification auction timetable milestones and new dates in the capacity auction timetable.

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.