30/10/2025
Insights Blog

The Department of Climate, Energy and the Environment (“DCEE”) is consulting until 21 November 2025 on implementation of Article 26 of the Net-Zero Industry Regulation (EU) 2024/1735. Article 26 requires Member States, when designing renewable energy auctions, to include:

  • pre-qualification criteria on (i) responsible business conduct, (ii) cyber security and data security, and (iii) ability to deliver the project fully and on time, and
  • pre-qualification criteria or award criteria to assess: (i) sustainability, and (ii) resilience contribution.

Rules on applying the criteria are in Article 26 and Implementing Regulation (EU) 2025/1176. DCEE proposes that the criteria will apply to all capacity offered in each RESS auction that commences from 2026 onwards.

Pre-Qualification Criteria

DCEE lists the evidence that bidders will provide to demonstrate they meet the three pre-qualification criteria. It considers that current RESS rules are adequate to allow bidders to demonstrate the third criterion (ability to deliver). Requirements around demonstrating the other two criteria flow largely from the Implementing Regulation.

Award Criteria

DCEE proposes that RESS auctions will include three non-price award criteria.

  • Resilience: This will be applied based on the implementing regulations and communications produced by the European Commission pursuant to Article 26. DCEE indicates that bids must include a minimum set of components made in countries that are not on the list of third countries set out in the information published annually by the Commission. It sets out the proposed scoring system at Annex A.
  • Energy System Integration (“ESI”): Member States must use at least one out of three sustainability criteria, and DCEE has selected ESI. It proposes to assess temporal flexibility, based on a project’s inclusion of a secondary renewable energy generation source or storage capacity. DCEE has indicated that this concerns behind the meter storage.  DCEE considers that using ESI could help to resolve dispatch down levels for projects but suggests it may review the Unrealised Available Energy Compensation (“UAEC”) under RESS. Any such review, however, may wish to consider whether ESI solutions fully enable generators to mitigate risk of the dispatch down compensated by the UAEC. Though it is outside the scope of this consultation, development of market and system rules to support hybrid connections and hybrid units would be a helpful development to enhance temporal flexibility.
  • Evaluation Correction Factor (“ECF”): Previous RESS auctions have used an ECF to adjust evaluated prices for policy objectives, such as technology balancing (without adjusting the strike price).

The weighting for the criteria is proposed as follows, depending on the technology configuration option that is used (see further below): 

  • price: 70–85%,
  • resilience: 5%,
  • ESI: 10–25%, and
  • ECF: 0–10%.

The consultation lists the evidence that bidders will be required to produce to demonstrate that they meet the criteria. As regards resilience, DCEE accepts that bidders may not have finalised suppliers at the time of the auction. It proposes they could provide a declaration confirming that they will provide the required evidence at a future point in time, before commercial operation. Where evidence is ultimately inconsistent with previous commitments, RESS support may be revoked.

Technology Configuration Options

DCEE is also considering whether future auctions should each be for separate technologies or a single pot covering all technologies. It identifies:

  • options 1-3, which would involve single-pot auctions with varying weightings for the award criteria, and
  • options 4-5, which would involve auctions dedicated to a technology, removing the ECF, and varying weightings for the other award criteria.

DCEE lists consultation questions to assist it in achieving clarification to develop these proposals. Elements of Article 26 of the Net-Zero Industry Regulation are complex to implement, and it is welcome that DCEE’s intent has been to apply the criteria in such a way as to avoid creating unnecessary barriers to participation in RESS or rollout of renewables. Further development of the criteria will be needed, including in the context of domestic market rules, and RESS rules that have applied to date, for example around technology co-location.