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Irish District Energy Association

Supporting and Promoting District Heating and Cooling in Ireland

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DISTRICT HEATING IN IRELAND REPORTS

A Roadmap for Delivery

Comparative international analysis of approaches taken to establishing and developing district energy markets in three mature and three emerging markets in Europe. The result is a set of recommendations for policy action to achieve Ireland’s 2030 targets for district energy.

(May 2024)


Link to text version

Low Carbon Heating Options Appraisal

Techno-economic analysis comparing district energy solutions with standalone low-carbon heating options in the Irish market. Modelled on data from the SEAI National Heat Study (2022), this analysis shows district energy could be the most economically viable low-carbon heating solution for 64% of the population.

(May 2024)

Link to text version



RECENT SUBMISSIONS & POLICY PAPERS

Ireland's Spark Gap 

Ireland’s Path to Decarbonising Heat through Electrification

Ireland has emerged as a leader in renewable energy, particularly with its strong onshore wind capabilities, expanding solar PV, and substantial offshore wind potential. The Climate Action Plan seeks to leverage this renewable energy to decarbonise heating and transportation. However, the cost disparity between electricity and gas presents a significant barrier to this goal, as electricity remains economically unviable for many looking to transition from fossil fuels to electric heating.

Current Challenges

Decarbonising heat by shifting to electricity is hindered by high electricity costs relative to gas. Ireland’s electricity prices are on average four times higher than gas, making electrification expensive for homeowners, businesses, and public buildings. Research from Cornwall Insights suggests that this cost ratio needs to drop below 2:1 to encourage widespread adoption. Even with zero wholesale costs, electricity prices still exceed gas due to substantial fixed charges from infrastructure, levies, and taxes. These non-commodity costs constitute more than half of the electricity price, surpassing the total cost of gas and obstructing a feasible transition to electrified heating.

Economic Impact

Low gas prices, coupled with high electricity costs, create a significant Spark Gap (the cost difference between electricity and gas), which is particularly high in Ireland, at around 3.5-5 times the gas price. Small businesses, for instance, face steep increases in heating expenses when switching to electric systems, potentially reducing profits by up to 20%, making the transition economically challenging.

To read more about the Spark Gap, visit:

Cornwall Insights Report, June 2024: https://districtenergy.ie/resources/Documents/Cornwall%20Insights%20Report,%20Breakdown%20of%20cost%20stack%20Ireland,%20June%202024.pdf

Spark Gap, Mark Adams, Asper Investment Management : https://districtenergy.ie/resources/Documents/Mark%20Adams,%20Spark%20Gap,%20IrDEA%20Annual%20Conference%202024.pdf

Spark Gap Briefing Paper, IrDEA, 2024:https://districtenergy.ie/resources/Documents/Spark%20Gap%20Briefing%20Paper,%20IrDEA,%202024.pdf



IrDEA Heat Cost Protection Scheme Proposal

Problem

Decarbonising electricity and then using it to supply our heating and transport demands is a very elegant strategy to reduce our carbon emissions, but right now it is severely hampered by a major barrier – the current cost structure of electricity is preventing the decarbonisation of heat.

For any homeowner, business, or public building looking to electrify their heating bill, they very likely face a higher cost of heating after they electrify than continuing to use fossil fuels. In fact, the analysis carried out by Cornwall Insights suggests that the average price of electricity is 4 times higher than the price of gas. This cannot continue if we want to rapidly electrify heating in Ireland as evidence has shown that this ratio needs to be less than 2 to encourage widespread electrification of heat.

Solution

Rosenow et al. (2022) outlined four different methods of reducing electricity costs for heating along with examples of countries which have used these methods, which are: lower tax on electricity; shift levies to fossil fuels, shift levies to public budget and environmental taxation. All of these are options for Ireland and IrDEA recommends that each is considered, as all of these will help incentivise the decarbonisation of heating.

As district heating networks are very large with sophisticated operators, IrDEA’s recommendation to stabilise the cost of electricity for decarbonised heat networks is by a Contract For Difference (CfD) which keeps the total cost of electricity to a maximum of twice the cost of the total cost of gas. The Policy Paper here called Heat Cost Protection Scheme describes this in more detail.




IrDEA Electricity Storage Policy Framework Consultation Submission Jan 2023 - Final (1).pdf

At approx. 60 TWh per annum, heat makes up 42% of final energy demand in a typical year for Ireland (SEAI 2019). Decarbonisation in the sector has, however, lagged behind electricity, with total fossil fuel based CO2 emissions from building and industrial process heating remaining around 14.1 MtCO2. This equates to approx. 38% of total energy-related CO2 and 24% of total national greenhouse gas emissions – natural gas (39%), oil (36%), and coal and peat (25%) (SEAI 2019). Significant action must be taken to address this if Ireland’s net zero emissions ambitions are to be realised.

The Irish District Energy Association (IrDEA) aims to help address this problem by driving the development of the Irish district energy sector. Though relatively new and underdeveloped in Ireland, district heating is well-established as means of providing sustainable heating solutions to industrial, commercial and residential energy consumers. With between 54% (SEAI) and 58% (Europa-Universitat Flensburg 2019) of Irish building identified as being suitable for district energy, this form of heating is primed to lead the decarbonisation of the sector. Energy storage, particularly largescale thermal energy storage systems (TES), is an integral part of this.

IrDEA offers the following comments in response to the call for submissions on developing an Electricity Storage Policy Framework for Ireland. We have focused specifically on energy storage as it relates district energy sector, in particular thermal energy storage systems (TES). As a general comment, however, we would strongly encourage the expansion of the policy framework beyond electricity storage to facilitate a whole system approach with respect to energy storage... (read on)




IrDEASubmission_Ireland’s current Long-term Strategy for Greenhouse Gas Emissions Reductions_07Jul2023.pdf

IrDEA welcomes the opportunity to contribute to the consultation on Ireland’s current Long-term Strategy for Greenhouse Gas Emissions Reductions. With district energy primed to play a leading role in the decarbonisation of heating and cooling in Ireland, the sector is keen to see its potential reflected fully in the Long-term Strategy for Greenhouse Gas Emissions Reductions.

While IrDEA welcomes the addition of the most recent Climate Action Plan 2023 targets to the Strategy, there are several elements in need of refinement to better reflect the future role of district energy in achieving our 2050 net zero emissions targets. This submission sets out those changes in broad terms. Should further information or elaboration be needed on these points, IrDEA would be most happy to provide them, but in the meantime, we wish the team well in producing the finalised Long-term Strategy for Greenhouse Gas Emissions Reductions... (read on)



Submission on the Climate Action Plan 2024

At approx. 60 TWh per annum, heat makes up 42% of final energy demand in a typical year for Ireland (SEAI 2019). Decarbonisation in the sector has, however, lagged behind electricity, with total fossil fuel based CO2 emissions from building and industrial process heating remaining around 14.1 MtCO2. This equates to approx. 38% of total energy-related CO2 and 24% of total national greenhouse gas emissions - natural gas (39%), oil (36%), and coal and peat (25%) (SEAI 2019). Significant action must be taken to address this if Ireland's net zero emissions ambitions are to be realised.

The Irish District Energy Association (IrDEA) aims to help address this problem by driving the development of the Irish district energy sector. Though relatively new and underdeveloped in Ireland, district heating is well-established as means of providing sustainable heating solutions to industrial, commercial and residential energy consumers. With between 54% (SEAI) and 58% (Europa-Universitat Flensburg 2019) of Irish building identified as being suitable for district energy, this form of heating is primed to lead the decarbonisation of the sector.

Tipperary County Development 2022 2028 Consultation 2022.pdf

The Irish District Energy Association (IrDEA) is the trade organisation representing the district heating and cooling (DHC) sector in Ireland. We act on behalf of our members to support and promote the growth of the DHC industry, creating a new heating market for Ireland which offers greater opportunities to utilise indigenous low-carbon and renewable sources of heat... (read on)


Draft Policy Statement on Geothermal Energy for a Circular Economy 2022.pdf

The Irish District Energy Association (IrDEA), founded in 2017 and its purpose is to promote the development of District Heating & Cooling (DHC) in Ireland. IrDEA currently represents 29 members from a variety of sectors from consultancy and technology providers, to the public sector and academia. Countries with similar climates, populations, and energy systems to Ireland have proven that district energy ...(read on)


REI 40 by 30 Full Text.pdf


This plan was developed by XD Consulting on behalf of REI and with the expert advice of organisations working in district heating, bioenergy, heat pumps, renewable gas and geothermal.

The plan clearly shows that 40 per cent of Ireland’s heat can be provided by renewable sources primarily from bioenergy, heat pumps, renewable gas and district heating networks. There is no single solution to decarbonising our heating system but we can heat our homes, schools, hospitals and businesses using a combination of several different heating technologies... (read on)



40 by 30 Media Briefing 2021.pdf

The Programme for Government includes a target of 7% annual reduc ons in CO2 emissions over the next decade which equates to a 51% reduc on in ten years, meaning Ireland must transition rapidly to renewable heat. Renewable Energy Ireland commissioned this report to set out an ambitious and feasible target for reducing our emissions in the heat sector by 2030... (read on)



Policy Archive





Irish District Energy Association

13 Adelaide Road, Saint Kevins, Dublin 2, D02 P950 

Company Registration: 619382

info@districtenergy.ie



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