Ireland’s energy sector enters 2026 at a critical inflection point. Following a year of exceptional economic growth, significant policy developments and announcements, and landmark energy deals, the focus now shifts to delivery.
This outlook considers the key macroeconomic, policy and market developments shaping Ireland’s energy transition in the year ahead.
Ireland’s economy continued to outperform expectations in 2025, with GDP growth hitting ~10%, largely driven by export front-loading ahead of anticipated tariffs. GDP is expected to grow ~3% in 2026. Ireland’s inflation remains elevated at ca. 3%, but is expected to ease to 2% in 2026. Inflation, which peaked at 12.6% in 2022, stabilised at 1.5% across the EU in 2025.
Interest rates, which rose sharply in 2022–23, began to fall in mid-2024. The ECB’s refinancing rate dropped by ca. 2% between June 2024 and June 2025, helping reduce the cost of capital for energy projects. This shift is already feeding into improved investor sentiment, reflected in several major transactions, some of which are listed below:
| Deal | Value / Volume | Deal background |
|---|---|---|
| ESB-Orsted Tonn Nua | 900 MW @ €98.72/MWh | Ireland’s second offshore wind CfD |
| Alexion–Carbon AMS | €80m, 15-year biomethane offtake | Large-scale biomethane offtake deal |
| Ardian–Energia | ca. €2.5bn acquisition | Vertically integrated utility acquisition |
| Flogas multi-buyer cPPA | 14 corporate offtakers | Corporate multi-party wind PPA |
2025 was marked by geopolitical volatility: the war in Ukraine persisted, and Middle East tensions spiked oil prices above $100/bbl. Despite this, global GDP growth held steady at 1.5%, with the EU forecast to grow 1.5–1.8% through 2027.
Ireland’s Single Electricity Market (SEM) recorded the highest wholesale electricity prices in Western Europe in 2025, averaging €114.67/MWh, nearly 50% below the 2022 crisis peak, but still over twice the 2020 average. Dispatch down rates for wind and solar exceeded 10% in Q2–Q4 2025, driven by grid constraints and curtailment.
Ireland advanced several transformative energy policies in 2025:
Key features
Impact
Will drive ~345 GWh biomethane demand in 2026; concerns over long-term targets and adequacy of multiplier
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Impact
Manages grid stress from data centres, which make up 22% of electricity demand in 2025, and are projected to make up 31% of electricity demand by 2034.
Key features
Impact
Unlocks self-supply for LEUs and accelerates renewable deployment.
Key features
Impact
Supports 4.4 GW of new distribution-connected renewables and 5 GW of offshore wind
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Impact
Enhances grid flexibility and renewable integration. Decision on final mechanism expected in 2026.
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Impact
Aligns NI with ROI and GB contract-for-different models, supporting all-island market coherence.
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Impact
Announced significant equity investment into ESB and Eirgrid
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Impact
The Taskforce is providing strategic guidance to identify key barriers to infrastructure delivery. It will also oversee the implementation of these reforms through challenge meetings with the responsible Departments and Agencies.
Ireland’s energy transition is entering a decisive phase. With the right execution, 2026 could mark the shift from policy ambition to delivery. KPMG will continue to support clients navigating this evolving landscape with insight, clarity and strategic foresight.
Deal with the increasing pace of change and execute the right deal. We help you ensure the most efficient capital and tax structures are put in place and implement new operating models in a demanding regulatory environment.
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