Ireland's first dedicated route-to-market for Long Duration Energy Storage (LDES) has moved a significant step closer, with the Commission for Regulation of Utilities (CRU) approving, subject to conditions, EirGrid's proposed framework for the initial procurement of up to 500MW of LDES. The decision provides greater regulatory clarity for developers and investors and marks an important milestone in the development of Ireland's energy storage sector, although several key operational and commercial elements remain subject to further consultation.
For developers, investors and storage providers, several points stand out:
- Up to 500MW of LDES to be procured: The scheme will support up to 500MW of storage with a minimum 4-hour duration for import and export, increasing ambition from the 201–300MW range originally proposed in EirGrid's consultation. The CRU has confirmed that 500MW is a ceiling rather than a target;
- Contract term: the CRU has approved a 10-year service duration, despite most consultation respondents arguing for at least 15 years. The CRU considers a shorter term appropriate for an initial round, limiting consumer exposure and allowing lessons to inform future procurements;
- A new revenue support model: Successful projects will benefit from a competitively bid revenue floor, subject to a bid limit informed by a Levelised Cost of Storage (LCOS) assessment, coupled with a 70:30 revenue-sharing mechanism, under which the asset retains 70% of the upside revenue and 30% is returned to consumers. The CRU has approved the revenue floor in principle, with full approval subject to the forthcoming consultation on contractual arrangements.
- Trading Envelope: Contracted assets will retain full access to SEM markets, but must trade within dynamic import/export limits issued by EirGrid at 10:00 D-1. Non-compliance charges will apply to breaches, and a Trading Non-Activity Scalar will reduce the revenue floor for under-active assets. The detailed methodologies remain subject to consultation;
- Location matters: Projects will be assessed not only on price, but also on their ability to reduce renewable dispatch down and their connection method. The final weighting is:
Cost (50%)
Impact on renewable dispatch down and system value (30%)
Connection method (20%) - Co-location is incentivised: Hybrid projects co-located with at least 30MW of transmission-connected renewable generation, and existing standalone connections energised by the tender closing date, will receive the full connection method score, while new standalone connections will score zero, reflecting policy objectives to maximise use of existing grid infrastructure.
- Advanced projects are likely to have an advantage: Projects will need to demonstrate a high level of maturity, including grid connection progress, planning consent and deliverability. A dedicated Best and Final Offer stage will also examine whether projects can realistically meet energisation timelines.
- Procurement expected to commence in 2027: A further consultation on contractual arrangements is expected before the formal procurement process begins.
While the decision is to be welcomed overall, the approved 10-year term is significantly shorter than the 25-year contracts available under the UK's equivalent cap-and-floor scheme, and developers will be watching the forthcoming consultation on contractual arrangements closely for the detail on the Trading Envelope methodology, revenue floor mechanics and deliverability assessment.
If you would like to discuss how the proposed LDES framework may affect your project pipeline, procurement strategy or development programme, please contact Ainsley Heffernan in Beauchamps' Projects Energy & Infrastructure team for more information.
