Energy efficiency first: what changes for sector companies in 2026

Key data

Energy sector companies requesting permits or public financing for new infrastructure face a relevant methodological change. The Recommendation (EU) 2026/839, adopted on 11 March 2026, establishes guidelines for calculating costs and benefits under the 'energy efficiency first' principle set out in Article 3.6 of the Directive (EU) 2023/1791.

In practical terms: before a regulator or administration approves a new energy infrastructure, it must be demonstrated that efficiency solutions have been considered and ruled out. And the calculation to do so now has specific methodological rules that this recommendation defines.

What does this regulation establish?

Recommendation 2026/839 does not create direct obligations for companies, but defines how national cost-benefit evaluation methodologies should be designed. This has three concrete implications:

• Obligation to consider efficiency first: Member States must ensure that before approving new energy infrastructure, efficiency solutions are evaluated as an alternative.
• Expanded calculation methodology: Cost-benefit analysis must include the monetization of externalities, non-energy benefits and systemic costs. It is not enough to compare the direct cost of the infrastructure against the efficiency measure.
• Guidance for national transposition: Although it is a non-binding recommendation, it directly guides how Member States must transpose Article 3.6 of Directive 2023/1791, which will result in mandatory national regulations.

Economic and operational impact

The main impact is not a direct economic penalty, but a change in the conditions for accessing permits and public financing for energy projects. Companies that do not adapt their analyses to this methodology risk having their projects rejected or delayed by national regulators.

The most relevant operational effects are:

• Greater technical justification burden: Permit application files must include more complex cost-benefit analyses, with monetization of externalities and non-energy benefits.
• Possible reorientation of investments: New infrastructure projects that were previously approved directly could now be conditioned on demonstrating that no more cost-effective efficiency alternative exists from a systemic perspective.
• Impact on public financing: Administrations granting aid or financing to energy projects will incorporate these criteria in their evaluations, affecting the eligibility of certain investments.
• Opportunity for efficiency solutions: Companies offering energy efficiency services or technologies can benefit, as the regulation encourages promoters to consider these alternatives before opting for new infrastructure.

Who does it affect?

• Energy sector companies that promote network, generation or demand projects and need permits or public financing.
• Energy regulators that must adapt their project evaluation methodologies to the guidelines of Recommendation 2026/839.
• Public administrations responsible for approving energy infrastructure or granting financing to these projects.
• Investors in energy infrastructure whose projects depend on regulatory permits or public co-financing.
• Energy planners who design network development or generation capacity strategies.
• Energy service companies (ESCOs) and efficiency solution providers, who gain relevance as an alternative to new infrastructure.

Practical example

An electricity distribution company plans to expand the capacity of a substation to meet growing demand in an industrial area. Before Recommendation 2026/839, the permit application focused on justifying the technical need and cost of the work.

With the new guidelines, the national regulator—following the methodology guided by this recommendation—will require the application to demonstrate that it has first evaluated whether energy efficiency measures for consumers in that area (demand management, battery installation, industrial process optimization) could solve the problem without needing to expand the infrastructure.

The analysis must quantify not only the cost of the work against the cost of efficiency measures, but also the externalities (avoided emissions, impact on the network as a whole) and the non-energy benefits of each option. If the analysis is not presented correctly, the permit may be suspended or denied.

What should companies do now?

1. Review energy infrastructure projects in portfolio: Identify which ones require permits or public financing and could be affected by the application of the 'efficiency first' principle.
2. Update cost-benefit analysis methodology: Incorporate the monetization of externalities, non-energy benefits and systemic costs in studies accompanying permit or financing applications.
3. Monitor national transposition: Although the recommendation is not binding, Spain must adapt its regulations to Article 3.6 of Directive 2023/1791. Follow regulatory developments from the Ministry for Ecological Transition and the CNMC.
4. Evaluate efficiency alternatives before submitting projects: Formally document that energy efficiency solutions have been considered as an alternative to new infrastructure, even before the regulator requires it.
5. Consult with specialists in energy regulation: The correct application of the cost-benefit methodology will require specific technical knowledge to avoid rejections or delays in applications.