2025 is set to be a busy year in the Irish energy sector. The sector continues to be driven by strong policy support, legally binding renewable energy targets and security of energy supply. There are a number of important policy and regulatory decisions expected during 2025 which have the potential to unlock opportunities in the sector.
Background
Ireland’s progress towards both its domestic, and its EU mandated sustainability and carbon targets has been inadequate. The EU’s climate framework, including the European Green Deal, the Fit for 55 package and the Effort Sharing Regulation and Renewable Energy Directive (RED III), aim for carbon neutrality by 2050, with intermediate targets for 2030 (including the requirement that at least 42.5% of the Union’s gross final consumption of energy in 2030 comes from renewable sources). Ireland, like other member states, is expected to reduce its greenhouse gas emissions by 30% by 2030 compared to 2005 levels, however, the country’s emissions trajectory has remained stubbornly above these targets as noted by the Sustainable Energy Authority of Ireland (SEAI).
Domestically, Ireland’s Climate Action Plan has set progressive goals which go above and beyond the EU requirements to increase the share of renewable electricity to 80% by 2030 including ambitious targets of deploying 9 GW of onshore wind, 8 GW of solar power, and at least 5 GW from offshore wind. The pressure is now on for the new Government to support industry through continued policy development, support schemes and other subsidy initiatives.
In this article, we explore sector specific developments and trends that we expect to see through 2025 and beyond.
Onshore wind and solar
Throughput of onshore wind projects has been frustratingly slow owing largely to delays in the planning process and judicial challenges to planning decisions. We expect this to improve with increased resourcing in Irish planning authorities and judicial clarity on decision making in relation to renewable energy projects.
The previous Government introduced the Planning and Development Act 2024 (the 2024 Act), the centrepiece of its efforts to reform the Irish planning system. The 2024 Act aims to:
The 2024 Act is a long and complex statute. It will come into force in stages as determined by the Minister for Housing, with a schedule of the required commencement orders due to be published early in 2025.
The Climate Action and Low Carbon Development Act 2015 (the 2015 Act) continues to exert a significant influence on planning in Ireland. The High Court confirmed this month in Coolglass Wind Farm v An Bord Pleanála that applications for planning permission are required to be decided, in so far as practicable, in a manner consistent with annual Climate Action Plans and other key policy goals under the 2015 Act. In that case, An Bord Pleanála’s decision to refuse permission for a wind farm was overturned for not having adequately considered whether it was possible to grant permission within the framework of An Bord Pleanála’s functions. This judgement significantly restricts the circumstances in which planning permission can lawfully be refused for renewable energy developments. You can read our discussion of this case here.
Ireland surpassed 1GW of solar generation connected to the grid for the first time in 2024. We expect solar generation to continue to expand rapidly with over 959 MW of solar projects successfully receiving offers in the RESS 4 auction, representing over 70% of the total offer quantity in that latest round of the scheme.
RESS
The Renewable Electricity Support Scheme (RESS) provides support to renewable electricity projects including wind and solar in Ireland. It is the Government’s flagship support scheme for onshore wind and solar energy. There have been four RESS Schemes to date with a fifth round (RESS 5) due to conclude over the course of 2025.
RESS 5: In December 2024, the consultation terms and conditions for RESS 5 were published by the Department of the Environment, Climate and Communications (DECC), with input sought around constraints, relief events, indexation, support duration and capacity factors. In addition, potential RESS bidders will be allowed to split their project capacity and bid a portion into RESS and pursue a corporate power purchase agreement for the remainder. Publication of the final RESS 5 Terms and Conditions is anticipated in April 2025.
SRESS: The publication in December 2024 of the Small Scale Renewable Electricity Support Scheme’s (SRESS) Terms and Conditions represents progress towards unlocking small scale solar electricity. The SRESS is designed to encourage the production of small-scale renewable electricity projects, such as solar, with installed renewable capacity greater than 1MW and up to, but not greater than 6MW. The SRESS Scheme opened for applications on 27 January 2025.
RESS 2 and RESS 3 Development Milestones: Projects receiving RESS support should remain cognisant of milestone dates falling in 2025. These dates were extended under both the RESS 2 and RESS 3 schemes by DECC in 2024. Specifically, RESS 2 Projects need to be operational by 31 December 2025 to avoid erosion of the term of the RESS Support and by 31 December 2026 to avoid loss of the support, while RESS 3 projects will need to show that funding to construct is in place by 31 July 2025.
RESS 4: EirGrid published final auction results for RESS 4 in September of last year.
Offshore wind
As part of Ireland’s Climate Action Plan 2024, the Government has set a number of targets to increase the share of renewable electricity to 80% by 2030, including at 5GW from offshore wind projects. DECC has approved the terms and conditions for the upcoming second offshore wind auction and approved the South Coast Designated Maritime Area Plan for Offshore Renewable Energy. The bidding process is expected to take place early this year to procure 900MW of clean energy, adding to the c. 3GW of potential capacity from up to 6 Phase 1 offshore wind projects. This will be complemented by the publication of a phase 2 grid connection and grid charging policy in 2025.
A number of Phase 1 offshore wind projects submitted planning applications in 2024. This tracks with further progress in defining the regime applying to Phase 1 projects as they progress through their development.
Further notable developments are anticipated in 2025 that will further refine Ireland’s offshore wind regime to include the publication of a future DMAP roadmap, implementation of a competitive Maritime Area Consent framework and assessment of the potential for floating offshore wind at scale.
Energy storage
Ireland made important strides in developing its energy storage framework in 2024 through the publication of the governments Electricity Storage Policy Framework (the Storage Framework). This policy document sets out a roadmap for the development of BESS, Li-ion, synchronous compensators and long duration storage technologies for 2024-2027.
The Storage Framework established key priorities around enabling market access, arbitrage and revenue stacking opportunities for storage assets. One of the major upcoming workstreams in 2025 will be the continued work to establish a procurement and consultation process for storage. A significant focus is being placed on long duration energy storage, with an explicit target to create a viable route to market by 2028.
The integration of storage into system services markets is also progressing through the development by the transmission systems operators (TSOs) and the Market Operator of the Future Arrangements for System Services. The regulated DS3 arrangements have been extended to April 2026 with replacement arrangements being developed through the Day Ahead System Services Auction workstream. This workstream will also provide for a Layered Procurement Framework. Market participants should be aware of the SEM Committee Decision of September last year to reduce the DS3 tariff for 2025.
Looking ahead, key areas to watch will be:
Separately, in October of last year, the SEM Committee published an Information Note on Phase 1 Procurement of Low Carbon Inertia Services (LCIS), with Phase 2 Procurement studies currently underway to define system inertia requirements for 2030. The SEM Committee’s target to procure 10,000 MVAs of LCIS across ROI and NI has been exceed with the TSO’s (EirGrid and SONI) successfully contracting 10,963 MVAs in total, which, according to the SEM Committee, equates to approximately 45% of the system’s current inertia floor requirements. The TSOs are currently undergoing studies for Phase 2 of the LCIS procurement to “define the system’s inertia requirements for 2030”.
Renewable gas
Biogas is expected to play a significantly increased role in Ireland’s energy mix in 2025 and going forward. As part of its 2023 Climate Action Plan and the National Biomethane Strategy published last year, the Government has set ambitious indigenous production targets of 1 TWh of Biomethane by 2025 including construction of up to 20 AD plants of scale, with an ultimate target of up to 5.7 TWh of Biomethane by 2030. Gas Networks Ireland (GNI) published its Pathway to a Net Zero Carbon Network setting out how it will seek to ensure that the gas network is capable of supporting a fully carbon neutral offering by 2045.
In order to support the Government’s targets, the Department of the Environment, Climate and Communications (DECC) is in the process of designing the Renewable Heat Obligation (RHO), which will incentivise suppliers of fossil fuels used for heat to ensure a proportion of the energy they supply is from a renewable source. The RHO policy is now expected to be published in 2025.
2024 also saw the introduction of a capital grant scheme for biomethane, with €40m being made available to new and existing anaerobic digestion plants with the grants set to cover up to 20% of total capital investment costs per successful applicant (subject to a maximum level of funding of €5 million per project). Approved projects under the grant scheme must be completed and the claim for payment (submitted to the SEAI) no later than 31 December 2025. We look at the scheme in more detail here.
At an EU level, the hydrogen and gas decarbonisation package, consisting of Directive (EU) 2024/1788 and Regulation (EU) 2024/1789, was adopted in May 2024 and EU countries have until mid-2026 to transpose the new rules into national law, bringing legislative changes to the rules on the EU natural gas market and introducing a new regulatory framework for dedicated hydrogen infrastructure. Ireland’s National Hydrogen Strategy published by DECC, sets a list of actions to be undertaken between 2023 and 2030 to support the long-term strategic development of a hydrogen strategy, with a number of actions due throughout 2025.
Natural gas
Major investment in the non-renewable gas sector is expected to remain limited to security of supply and capacity markets.
One important area of activity in the natural gas sector is the role it will play in security of supply. Ireland is obliged under the Security of Gas Supply Regulation (EU) 2017/1938 to be capable of meeting exceptionally high gas demand in the event of a loss of its largest single piece of gas infrastructure. In Ireland’s case this would mean disruption of supply from the IC2 interconnector in the UK. In 2023 Ireland still obtained 77% of natural gas imports through interconnectors. GNI is tasked further to the government’s Securing Ireland’s Gas Supplies policy to develop a Strategic Gas Emergency Reserve. In November 2024 GNI stated that it had recently submitted to the Minister for the Environment Climate and Communications proposals for the reserve.
Grid policy and private wires
Connection Policy: In September 2024 the Commission for Regulation of Utilities (CRU) published its Electricity Generation Connection Policy – Generation and System Services (ECP-GSS) Decision Paper to provide a new pathway for connection of projects such as onshore renewable and conventional generators, to the electricity grid. The ECP-GSS will replace the existing Enduring Connection Policy. It introduces bi-annual batch processing in March and September each year, with the first batch closing in September 2025. There are distinct processes for renewable and conventional projects, with connection offers processed within 12 months for renewable projects and 18 months for conventional ones. Additional policy updates have been made in the ECP-GSS that will bring greater clarity to repowering and storage/hybrids projects.
Private Wires: Following the publication Private Wires Guiding Principles for Policy Formation by DECC last July, the launch of the Private Wires Policy is anticipated early this year. This is part of the government’s commitments under the Climate Action Plan 2024 and will complement grid development and accelerate electricity production. The aim of the policy is to unlock private sector resources to build new electricity infrastructure by expanding the right of private undertakings to connect supply directly with demand which will be important in addressing the grid capacity demands. We understand that we should expect to see publication this year of a consultations on sharing of maximum export capacity behind a single connection, a policy on multiple legal entities sharing a single connection point and a private wires policy (likely in that order).
Interconnection
Interconnection between Ireland and the UK is set to increase significantly with the privately owned 500MW Greenlink Interconnector between Wexford and Pembrokeshire (Wales) expected to become operational this year and the 700MW Celtic interconnector (which will provide Ireland’s first electrical interconnection with current EU member state (France)), due to commence offshore marine cable installation in 2025, with completion scheduled for 2026.
The proposed 750MW MaresConnect Interconnector between Dublin and Bodelwyddan (Wales) is continuing to progress through its development and consenting stage (having received a favourable decision by Ofgem in late 2024 granting it a GB cap and floor regime in principle). We expect further developments in this sector as the Government continues to act on its 2023 National Policy Statement on Electricity Interconnection.
Data centres and energy parks
One of the coming year’s key developments will be publication of grid connection policy in respect of large energy users. The CRU published its consultation on Large Energy Users (LEU) Connection Policy in January 2024, with a decision expected to follow early this year (expected in January 2025).
Data centre operators need to be cognisant of the new sustainability reporting obligations under Directive (EU) 2023/1791 (the Energy Efficiency Directive or the Directive) and further in accordance with delegated Regulation (EU) 2024/136 (the Regulation). The next reporting deadline under the Energy Efficiency Directive is 15 May 2025, however, at the time of writing the Directive has not yet been transposed into national law.
Nuclear energy
Nuclear Energy has been a hot topic in the Energy industry over the past 3 years given the need to scale up grid capacity to service large energy users powering AI. Recent deals such as Constellation Energy’s with Microsoft have grabbed the headlines. Ireland has a long-standing prohibition on Nuclear Energy by virtue of the Electricity Regulation Act 1999, which specifically prohibits the use of nuclear fission for the generation of electricity.
For further information on any of these topics, please contact John Dallas, partner or any member of the Energy, Infrastructure & Natural Resources Group.
Date published: 30 January 2025
