Horizon Scanner: Energy Planning Infrastructure And Construction May 2026 - Energy And Infrastructure

Key developments

ENERGY SECURITY PACKAGE

The European Commission published AccelerateEU – Energy Union: Affordable and Secure Energy through Accelerated Action in response to the energy crisis. It is structured around five pillars: enhanced EU coordination on energy security, consumer and industry protection from price shocks, accelerating the shift to clean energy and electrification, strengthening infrastructure, and boosting investment. Key upcoming measures include:

• a new legislative proposal on network charges and taxation to be adopted in May 2026, aimed at optimising use of grid infrastructure and incentivising system-friendly consumption,
• an Electrification Action Plan by summer 2026, including an ambitious electrification target, measures addressing barriers to electrification in industrial, transport and building sectors, and the phasing out of fossil fuel subsidies,
• a review of the EU ETS to be proposed by July 2026, including an ‘ETS Investment Booster’ to mobilise €100 billion of funding for industrial decarbonisation through an Industrial Decarbonisation Bank, and
• a State aid temporary framework to support sectors most exposed to price spikes.

The European Commission is due to consider the proposal on network charges and the electrification action plan on 10 June 2026, and the ETS Review on 15 July 2026.

The Commission also published a catalogue of measures for EU Member States on how to address the energy crisis, drawing on the most effective measures taken since 2022.

CITIZENS ENERGY PACKAGE

Following the Communication on the Citizens Energy Package, the Commission published four recommendations on implementation of EU law, set out below, along with an accompanying staff working document. These recommendations will be of particular relevance to energy supply companies.

• Energy poverty: Commission Recommendation (EU) 2026/1001 on the protection of vulnerable customers and customers in energy poverty from energy disconnections and during the phase-out of natural gas or when natural gas distribution networks are being decommissioned has been made to guide Member States on implementing requirements under the Internal Market in Electricity and Gas Directives.
• Renewable energy communities and citizen energy communities: Commission Recommendation (EU) 2026/1007 on supporting the development of energy communities and maximising the potential of self-consumption recommends measures Member States should take to comply with Article 15a of the Internal Market in Electricity Directive, which requires them to establish a right to energy sharing that will ensure that all households, SMEs, public bodies and, where a Member State has decided, other categories of final customer, have the right to participate in energy sharing as active customers.
• Supplier risk management: Commission Recommendation (EU) 2026/1009 on supplier risk management recommends measures Member States should take to ensure that suppliers offering fixed-price contracts have appropriate hedging strategies proportionate to their generation access, capitalisation, exposure to wholesale volatility, size and market position.
• Supply contracts: Commission Recommendation (EU) 2026/1008 on the summary of the key contractual terms and conditions of energy supply contracts recommends that Member States take measures to adopt templates for information that should be provided to energy customers before they are bound by any contract or offer.

The Commission has also published a report on market-based electricity supply prices, effective retail market competition and promoting remuneration of flexibility in retail contracts, as required under the Internal Market in Electricity Directive. Further information is available here: Citizens Energy Package: helping households in the energy transition.

EU GRIDS PACKAGE

It has been reported that the Cyprus Presidency will propose a new revised compromise text before the 26 June Energy Council. The file will be carried over to the Irish Presidency which begins on 1 July 2026. Our briefing on the Grid package is available here: EU Energy Grids Package.

ENERGY PERFORMANCE OF BUILDINGS

As mentioned in our Construction section, further steps have been taken in the transposition of the recast Energy Performance of Buildings Directive. Our briefing is available here: Ireland transposes key reforms for BER regime.

PRIVATE WIRES BILL

The Oireachtas Joint Committee on Climate, Environment and Energy published its pre-legislative scrutiny report on the Private Wires Bill (PDF 359 KB). Members made 47 recommendations, some of which would benefit from further consideration.

For example, Recommendation No. 1 is that the Bill should “justify why existing direct lines legislation under section 37 of the Electricity Regulation Act, or an amendment to the Act, cannot meet the intended outcomes of the private wires general scheme”. As we have previously commented, Ireland has taken a narrow approach to implementing EU law on direct lines. This means that the Commission for Regulation of Utilities (“CRU”) will not grant a direct line permission unless a person has applied for connection to the grid and, either the application has been refused because of lack of capacity, or a dispute has been referred to the CRU and the CRU has formed the view that it is in the public interest to issue the direct line permission.

In practice, applications to connect to the grid tend to be queued up rather than refused outright, or policy is designed to allow for the ‘termination’ of applications. This means that the conditions that would allow the CRU to grant a direct line permission are not triggered. We discuss this further in our briefing: Private Wires: First Principles. It is also worth noting that the definition of direct lines in the Directive is addressed to a more specific set of circumstances than the circumstances contemplated in the Bill.

A further recommendation is that applicants would be required to demonstrate that a grid connection is unfeasible or would result in undue delay. However, it is unclear how an applicant would demonstrate scenarios that sit within system operators’ remits. Some recommendations also suggest that the framework be anchored in climate law, but it is not clear why existing climate and environmental law would not in any case apply. It is also unclear why it is being recommended that private wires must be compliant with the technical standards of ESB and EirGrid. Decisions on optimal technical specifications appropriately sit with developers, who are well placed to meet internationally accepted norms.

DATA CENTRES

Information on grid connections for data centres has been published on the websites of both EirGrid and ESB Networks. This follows the CRU’s 2025 connection policy, which we outlined in a briefing here: New connection policy for data centres in Ireland. The policy is currently subject to an application for judicial review. We are monitoring developments in this area.

SYNCHRONOUS CONDENSER UNITS

The SEM Committee is consulting until 19 June 2026 on potential eligibility of synchronous condenser units to participate in SEM intermediary arrangements, which allow market participants to apply to be represented by an intermediary where they do not wish to accede to the Trading and Settlement and Capacity Market Codes.

DEMAND SIDE UNITS

Following its publication of a set of proposed decisions to deal with the issue of missing money for demand side units (“DSU”), the SEM Committee is consulting until 10 July 2026 on the “the Supplier Compensation Price”, which the DSU aggregator would pay to suppliers (via the Imperfections fund) because the SEMC has taken a view that there should not be energy payments to the DSU aggregator as well as savings in supplier charges for customers.

EU LEGISLATION

The European Commission indicates that it plans to modernise the approach to EU law with the aim of making it simpler and clearer, as well as strengthening enforcement. Further information is available here: Commission proposes plan for simpler, clearer and better enforced EU rules.

Further EU developments

ELECTRICITY

• European Resource Adequacy Assessment: ACER approved the ERAA proposed by ENTSO-E but made recommendations to improve methodology. ACER also published an Opinion on the Resource Adequacy Assessments for Ireland, Northern Ireland and the Single Electricity Market as a whole.
• Cross-border costs and benefits: ACER is examining gaps in the framework for sharing the costs and benefits of cross-border electricity infrastructure. It sets out a range of policy options, from targeted improvements to existing mechanisms through to a new common EU financing framework, with the aim of informing further discussion on how arrangements can better incentivise grid investment.
• Data centres: ENTSO-E published a report exploring the interaction between data centres and the electricity system, looking at how data centres consume electricity and what this means for grid operation, the implications for grid planning and how these can be addressed, and the flexibility potential of data centres. Further information is available here: From Energy Demand to Grid Support: ENTSO-E Explores Data Centres’ Dual Role.
• Grid capacity: ENTSO-E and DSO Entity launched a digital portal providing an overview of publicly available grid hosting capacity information.
• Network planning: ENTSO-E and ENTSOG, with the involvement of ENNOH, submitted the Interlinked Modelling Report to the European Commission to guide coordinated cross-sector infrastructure planning. Good Practices in DSO-TSO Collaboration in Network Planning have also been published by ENTSO-E and the DSO Entity.
• Network tariffs: ACER launched a tool to improve transparency of electricity network tariffs by bringing together tariff information from EU Member States in one centralised platform.

GAS

• Hydrogen Bank: Under the third auction of the European Hydrogen Bank, nine hydrogen production projects are to receive around €1.09 billion from the Innovation Fund (resourced from the EU ETS).
• Hydrogen infrastructure: ENTSOG and ENNOH published a report outlining de-risking options for EU hydrogen infrastructure (PDF 444 KB).
• Hydrogen Mechanism: The Hydrogen Mechanism is intended to bring together hydrogen buyers and sellers. The European Commission has now published the results of the first round of the mechanism.
• LNG: ACER’s 2026 Monitoring Report on LNG indicates that LNG has become central to the EU gas system and highlights exposure to global risks, including supply concentration, spot market volatility and geopolitical disruptions.

CARBON

• EU ETS review: The European Commission hosted a high-level stakeholder roundtable on the review of the EU Emissions Trading System, gathering input on policy priorities for the EU ETS and Market Stability Reserve for 2031–2040.
• EU ETS benchmark values for free allocation of allowances: The Commission is consulting until 8 June 2026 on updated benchmark values for 2026-2030 used for determining the level of free allocation of allowances. Further information is available here: Commission presents updated EU Emissions Trading System benchmarks for consultation.
• ETS2 (fuel for buildings, roads): The Parliament adopted its proposed amendments to the ETS2 market stability reserve for the buildings, road transport and other sectors. Parliament will now negotiate with the Council to agree a final text. Further information is available here: ETS2: changes to market stability reserve for buildings and road transport.
• Innovation Fund: €400 million of EU ETS revenue will fund projects in several countries to decarbonise heat in industrial settings.
• CBAM netting off carbon price paid in a third country: The Commission is consulting until 10 June 2026 on rules for converting into a corresponding number of CBAM certificates the carbon price paid in a third country for declared embedded emissions.
• CBAM common central platform: From 1 February 2027, Member States must sell CBAM certificates on a common central platform to authorised CBAM declarants established in that Member State. The Commission and Member States are beginning the process of procuring the common central platform.
• International carbon market: An Open Coalition on Compliance Carbon Markets, an initiative to strengthen global cooperation on carbon pricing, was launched by the EU, Brazil and China. Next steps are to establish a secretariat and work plan to be adopted in September 2026.

RENEWABLE ENERGY DIRECTIVE

The European Commission is referring Greece, Malta and Portugal to the Court of Justice of the EU for failing to transpose RED III. Further information is available here: Commission decides to refer Greece, Malta and Portugal to the Court of Justice of the EU.

INDUSTRIAL ACCELERATOR ACT

EU Member States will hold a policy debate on the Industrial Accelerator Act (PDF 301 KB) on 28 May 2026. The proposal includes amendments to provisions on non-price criteria in renewable energy auctions. Our briefing on the proposal is available here: The EU Industrial Accelerator Act: Impacts on renewable energy auctions, public procurement and FDI.

TRANS-EUROPEAN NETWORKS

A Connecting Europe Facility call is open until 30 September 2026 for projects on the second PCI/PMI list of cross-border energy infrastructure projects for the purpose of making €600 million funding available.

INFRASTRUCTURE COSTS

ACER reports that energy infrastructure costs have increased above inflation across most categories. Cost drivers point to increased exposure to price volatility and dependence on supply chains, particularly for materials from third countries, as well as other manufacturing-related costs.

CASE LAW

In C-199/25, public service obligations (“PSOs”) were imposed on Flemish DSOs in the context of a renewable energy support scheme. The DSOs were designated as “buyer of last resort” for green certificates and combined heat and power certificates: they were required to buy the certificates at a guaranteed minimum price when producers could not find buyers on the market.

The DSOs challenged the energy regulator’s decision setting the tariff methodology for electricity and gas distribution for 2025-2028. Their grievances centred on how costs were calculated and capped. In the course of proceedings, the regulator also raised a separate issue of whether PSO costs should be in network tariffs at all.

Article 18(1) of the Internal Market in Electricity Regulation provides that “Charges applied by network operators for access to networks … shall not include unrelated costs supporting unrelated policy objectives”. Article 57(4) and (5) of the Internal Market in Electricity Directive deals with designation and independence of regulatory authorities and Article 59(1)(a) sets out the regulatory authority’s duty to fix or approve, in accordance with transparent criteria, system tariffs or their methodologies, or both.

Advocate-General Rantos has opined that these provisions do not prohibit:

• the inclusion in network charges of the costs of PSOs imposed on a network operator by a Member State and which are not financed by taxes, duties, subsidies, contributions and levies, provided that those costs are not integrated into the methodology for setting, and are clearly distinguished from, network charges, and
• a tariff methodology that uses a historical cost trend method, in so far as that methodology provides for factors enabling the data to be adjusted, if necessary, to the costs of an efficient and structurally comparable DSO.

Further domestic developments

RED III TRANSPOSITION

European Union (Renewable Energy) (Amendment) Regulations 2026 (PDF 144 KB) copies over Article 3(4a) of RED III which requires Member States to establish a framework, which may include support schemes and measures facilitating the uptake of PPAs, to enable the deployment of renewable electricity to a level consistent with the national contribution under Article 3(2) and at a pace consistent with the indicative trajectories referred to in the Climate Governance Regulation.

The framework is required to tackle remaining barriers to a high level of renewable electricity supply, including those related to permit-granting procedures, and to the development of the necessary transmission, distribution and storage infrastructure, including co-located energy storage. When designing the framework, Member States are required to take into account the additional renewable electricity required to meet demand and for the production of renewable fuels of non-biological origin.

OFFSHORE RENEWABLE ENERGY

The Government published its annual report on key actions taken to develop offshore renewable energy in face of volatile fossil fuel prices and supply disruptions. The Oireachtas Joint Committee on Climate, Environment and Energy also published a report on challenges to the delivery of offshore renewable energy.

Recommendations include prioritising the resourcing of planning and consenting authorities; implementing statutory decision times; increasing the number of judges; sharing data gathered through the ObSERVE Programme; avoiding overspecification of assets to be handed to the State; developing a strategy to identify future electricity demand; allowing for the funding of port development from the State, EU and private investment and prioritising expansion of two ports; rapid progression of legislation and policy for long-duration energy storage, battery storage and demand-side flexibility; and various proposals relating to community engagement.

RENEWABLE HEAT SUPPORT SCHEME

State aid approval has been granted for a scheme to support the production of renewable heat. It is open to non-domestic heating and heat users that install and use eligible renewable heating systems (including biomass and anaerobic digestion heating systems, as well as high efficiency combined heat and power heating systems). The aid will take the form of administratively set tariffs paid per metered unit of useful renewable heat output. The latest date on which aid can be granted is 31 December 2030 and payments can be made until 31 December 2047.

EMISSIONS

The EPA has reported on the extent to which Ireland will not meet its 2030 emission reduction targets under the EU Effort Sharing Regulation. The report is available here: Environmental Protection Agency.

Further CRU business

UAEC

The CRU consulted on implementation of Unrealised Available Energy Consumption for relevant RESS-supported projects. As RESS 3 projects progress towards operation, clarity on the methodology for implementing UAEC, faithful to RESS terms and conditions, is becoming more urgent.

DEMAND FACILITY FAULT RIDE THROUGH

The CRU invited submissions for a short period on EirGrid’s Grid Code modification proposal (MPID 345: Fault Ride Through, Rate of Change of Frequency and Post Fault Active Power Recovery for Demand Facilities) and associated compliance and derogation framework. The proposed modification would implement new technical requirements for all transmission connected demand facilities. The objective is to prevent sudden drops in demand as a result of demand sites automatic back-up responses being triggered by transient faults on the transmission system.

CUSTOMERS

The CRU is calling for evidence until 26 June 2026 on protecting and supporting customers facing sustained high energy prices. Questions relate to retail market monitoring, customer sign-up, customer billing, repayment plans and pay-as-you-go financial hardship meters, arrears and disconnection procedures, and end of contract practices.

RETAIL MARKETS

The CRU interim review of the electricity and gas retail markets indicates that competition in the Irish retail markets is working and is generating rivalry. However, not all consumers are benefiting to the same extent, with less actively engaged customers experiencing poorer price outcomes. The initial assessment of supplier profit margins does not suggest excess profitability.

GAS

Commission Regulation (EU) 2017/460 establishing a network code on harmonised transmission tariff structures for gas requires periodic consultations on the reference price methodology, which is the methodology applied to the part of the transmission services revenue to be recovered from capacity-based transmission tariffs with the aim of deriving reference price. (Reference price is the price for a product for firm capacity for one year applicable at entry and exit points and used to set capacity-based transmission tariffs.) The CRU is consulting until 15 July 2026 with the intent of publishing its final decision on the transmission tariff methodology by Autumn 2026.

The CRU also published a decision on the detailed design of the gas pay-as-you-go replacement meter project (PDF 1.2 MB). Rollout of the new meters is expected to begin in 2027 and take around four years.

Further SEMC business

FIVE-YEAR STRATEGY

The SEM Committee is consulting until 2 June 2026 on a high-level strategic direction setting out four strategic priorities: investment signals and market design; market integrity and competition; EU alignment and cross‑border coordination; and governance. It has also published an interim forward work programme report 2025-2026.

CAPACITY MARKET

The SEMC has published indicative times for T-4 auctions.

UK

DYNAMIC ALIGNMENT

The UK Government intends to introduce a bill (PDF 343 KB) to provide a mechanism to ‘dynamically align’ with EU law in sectors such as carbon emissions trading and electricity trading. Ongoing work to cooperate in these areas is referenced in minutes of the latest meeting of the Trade and Cooperation Agreement Partnership Council: On energy, the UK highlighted the positive work of the relevant Specialised Committee, particularly on areas such as electricity trading, new technologies, and security of supply.

ELECTRICITY AND EMISSIONS TRADING

At the UK-EU Summit agreement was reached to reintegrate respective emissions trading systems (ETS) and explore the recoupling of their electricity markets. Further information is available here: A renewed agenda for European Union – United Kingdom cooperation Common Understanding.

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.