Reverse Grid Compression interim solution

The Commission for Regulation of Utilities has approved Gas Network Ireland’s interim Reverse Grid Compression solution. The measure is regarded as a key development that could unlock up to 437 GWh of additional biomethane injection capacity and support the growth of Ireland’s AD sector. Our Energy team examines what the framework means for developers and why early action may be important under the first-come, first-served allocation model.

What you need to know

• The CRU has approved GNI’s interim Reverse Grid Compression (RGC) solution, aimed at addressing network constraints that could otherwise limit biomethane injection from regional AD plants.
• The interim framework could unlock up to 437 GWh of additional biomethane injection capacity, representing approximately 7.5% of Ireland’s 2030 biomethane target.
• Access to the interim solution will be granted on a first-come, first-served basis and is limited to eligible projects that meet specified connection, planning and funding criteria.
• A permanent regulatory framework for RGC is still under development, but the interim solution provides important near-term certainty for projects already at an advanced stage.

While a permanent regulatory and funding framework for Reverse Grid Compression (RGC) is being developed, the Commission for Regulation of Utilities (CRU) has published an information note confirming interim solution for RGC proposed by Gas Network Ireland (GNI). The interim solution provides near-term certainty on investment in and funding for RGC technology for biomethane projects that are already well advanced.

Ireland’s biomethane production targets for 2030 will require between 140 and 200 anaerobic digestion (AD) plants. There were just two operational facilities producing less than 0.1 TWh in 2024. Most of these plants will likely connect to Ireland's low-pressure regional distribution networks.

If local distribution networks become constrained during periods of low seasonal gas demand, local biomethane production may exceed demand on lower-pressure networks. In those circumstances, biomethane injection may need to be curtailed and excess gas could potentially be flared. GNI's analysis indicates that these constraints could affect almost all regional (non-city) distribution networks, potentially threatening the financial viability of AD projects.

RGC technology seeks to address this by compressing gas from the lower-pressure distribution network up into the higher-pressure transmission system, where it can flow to areas of greater demand. This unlocks injection capacity that would otherwise be lost and is identified in Ireland's Biomethane Strategy as a critical enabler for the industry.

The PC5 Flexibility Pot will provide the funding to support the interim solution for RGC. GNI estimates that the interim solution could unlock up to 437 GWh of additional biomethane injection - approximately 7.5% of the 2030 national target.

Eligibility criteria

To be considered for RGC under the interim solution, a project must:

• Have submitted a completed grid connection application and paid the €10,000 application fee to GNI
• Have an indicated minimum constraint volume of gas of 4 GWh per annum in the network analysis report issued for the project by GNI under the connection application process
• Not already be contracted to connect, except for existing AD plants seeking to add capacity

GNI will assess whether to offer RGC for a project under the interim solution based on whether:

• It would avoid more expensive network reinforcement in the relevant area
• The project supports the objectives of the National Biomethane Strategy
• Sufficient funds remain in the PC5 Flexibility Pot

Where there are insufficient funds remaining in the PC5 Flexibility Pot, GNI will maintain a waiting list of projects, should funding subsequently become available.

If RGC under the interim solution is offered, the connecting party must:

• Pay a developer contribution of €370,000, which the CRU notes is approximately 10% of the cost of the reverse compression installation. This amount is payable at the same time as the 30% customer grid connection contribution
• Hold full planning permission with no active judicial review proceedings, and the statutory appeal period must have expired
• Sign the connection agreement within four months of the offer date

Projects that are not eligible will receive a standard connection offer, without RGC funding under the interim solution.

Next steps

The interim RGC solution represents an important step towards addressing one of the key infrastructure challenges facing Ireland’s biomethane sector. While a permanent regulatory framework is still being developed, the CRU’s approval of this interim approach provides greater certainty for developers progressing AD projects and signals continued regulatory support for the growth of renewable gas injection capacity. Given the limited funding available and the first-come, first-served nature of the process, developers may wish to assess their eligibility and project readiness at an early stage.

For more information on the interim Reverse Grid Compression framework and its implications for biomethane projects, please contact a member of our Energy team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.