Ireland’s new Large Energy Users (LEUs) connection policy: What it means for the Irish energy sector

The CRU’s December 2025 decision on LEUs marks a significant change in the requirements for new data centre connections in Ireland, with broader implications for the Irish energy sector. For energy developers and investors, the policy creates investment signals for dispatchable and renewable generation, energy storage and renewable gas.

The policy applies exclusively to data centres, reflecting their rapid load ramp, demand profile and concentrated siting (particularly in the greater Dublin region). The decision is framed to provide specific criteria for new applications while addressing grid constraints and balancing climate obligations.

Two pillars define the new approach:

• Any new data centre at or above 10 MVA must deliver separately connected and metered onsite or proximate dispatchable generation and/or storage, sized on a de-rated basis to at least match the site’s MIC throughout the life of the connection and operable in I-SEM. The data centre’s ramp rates are constrained by the delivery of dispatchable generation and/or storage and therefore the delivery of such generation and/or storage is a critical part of data centre project delivery.
• All data centres at or above a 1 MVA de minimis must meet at least 80% of annual demand with additional renewable electricity generated in the Republic of Ireland, with a six year glide path from energisation and a requirement to show a credible plan at application stage. There are significant incentives to meet these requirements by the end of the six-year glide path and a failure to do so may entitle system operators to reduce the MIC of the demand connection.

Dispatchable generation: Onsite or proximate plant must participate in the wholesale electricity market, opening multiple revenue opportunities to offset the additional cost of construction of the plant. This includes energy, DS3 system services and capacity market (although the decision does introduce limits on participation in the capacity market including limiting participation to one year capacity market contracts).

The decision has clarified that data centre developers can contract with third party service providers to meet the requirements for onsite/proximate generation, creating opportunities for partnerships between data centre developers and energy developers to deliver what are, in themselves, complex infrastructure projects.
Renewables: The requirement to meet at least 80% of annual demand from renewable electricity within six years will incentivise development of directly connected renewables (in line with new private wire policy and legislation) and corporate power purchase agreements (CPPAs) for new renewable electricity projects in the Republic of Ireland. This includes wind, solar and storage, along with fully repowered projects. Whilst demand for renewable CPPAs from the data centre sector is already strong, this new policy should create further demand and earlier engagement with renewables developers given the need at grid application stage for a credible transitional plan with reference to specific renewable generation projects and the anticipated timeline for development.

Renewable gas: The decision encourages that any technologies used for onsite or proximate generation should be sufficiently futureproofed where possible, meaning that if using gas generation, which is the most likely onsite dispatchable generation, the facility should be compatible to run on lower or zero-carbon fuels. It also recognises that where data centres are connected to the gas network, biomethane could play a role in the decarbonisation of onsite gas generation plant. This creates clear signals to data centre developers to invest in generation assets capable of transitioning to biomethane, hydrogen or other renewable gases over time. It also creates signals to the renewable gas sector that demand from data centres could further support the development of indigenous biomethane (or other renewable gas) production.

Data centre projects are likely to need to combine flexible, future proofed thermal units (with pathways to low carbon fuels), batteries enabled by evolving dispatch systems, and contracted Irish renewable portfolios to meet the requirements for dispatchable generation and 80% renewable energy requirements. Ultimately the policy underscores that delivering Ireland’s twin transitions of digitalisation and decarbonisation requires the data centre and energy sectors to work closely in tandem.

John Dallas
Partner, Energy, Infrastructure & Natural Resources
A&L Goodbody LLP

For more information visit: www.algoodbody.com/energy