New Heat Bill paves the way for district heating nationwide

• First ever stand-alone heat bill in the history of the State highlights the importance of switching away from fossil fuels as Ireland’s main heat source

The government has approved the General Scheme of the Heat (Networks and Miscellaneous Provisions) Bill 2024. The development of this legislation will pave the way for the growth of a district heating industry in Ireland that would be highly efficient and low carbon, helping us to meet our national and international climate targets. Importantly, it would also establish a regulatory model that ensures price protection for large and small heat network consumers.

District heating utilises a centralised heat source to heat multiple buildings across a potentially wide geographical area. This allows for several types of heat sources to be used to heat up to thousands of buildings across an entire village, town or city. Heat sources could be waste facilities like that in Dublin’s Poolbeg, or they could be large energy users like data centres or pharmaceutical companies that have access heat. If the heat source is low-carbon, it means that an entire district can be decarbonised almost instantly.

The Sustainable Energy Authority of Ireland's (SEAI) 2022 National Heat Study found that district heating has the potential to supply over 50% of heat nationally and, crucially, it identifies the potential to use this technology in large towns and cities across Ireland where demand is concentrated, and heat sources are prevalent. Similarly, Codema (Dublin's Energy Agency) identified that, collectively, there are enough waste heat and renewable sources in Dublin to heat over 1 million homes and that approximately 80% of heat demand in Dublin could be met by district heating by 2050.

Minister Ryan opened Ireland’s first district heating network in Tallaght, Co. Dublin, in April of last year. This uses waste heat from the Amazon Data Centre, which is now providing low-carbon heat to South Dublin County Council public buildings and Technological University Dublin, with further plans to provide heat to 133 affordable apartments next year and up to another 3500 homes over the next three to five years. There are also plans in place to use waste heat from the Poolbeg incinerator to heat approximately 50,000 buildings in the surrounding area.

While, historically, many district and communal heat networks across Europe have relied on non-renewable energy sources such as gas, district heating is now being used as a key technology in many European countries to decarbonise heat. For example, low carbon district heating systems supply 90% or more of all heat in sustainable cities such as Copenhagen and Stockholm.

Although district heating is a well-established technology with approximately 70 million district heating customers across the EU, it is new to Ireland with only one district heating network developed by South Dublin County Council in Tallaght.

Minister Ryan said:

Ireland has very ambitious targets within the Climate Action Plan, to comply with EU directives and our sectoral emissions ceilings, to deliver district heating of up to 2.7 TWh by 2030. That will require a very significant and immediate scale up and acceleration of projects.

The introduction of legislative and regulatory frameworks for the district heating sector by way of this General Scheme will be crucial in providing policy and regulatory certainty to potential project sponsors and investors in district heating in Ireland. In addition, amendments are being made to the Support Scheme for Renewable Heat (SSRH) to facilitate supports for district heating. The process to access Infrastructure, Climate and Nature Fund investment for district heating projects has also started, and with the active role the Department of the Environment, Climate and Communications, the SEAI and local authorities are taking in the area, tangible progress is being made in developing the project pipeline for the sector.

ENDS

District heating

District heating can deliver the decarbonised heat necessary to meet a significant portion of Ireland’s renewable heat targets. National policy in Ireland has recognised the contribution that district heating can make to Ireland’s energy and climate goals and is underpinned by the findings of the Sustainable Energy Authority of Ireland’s (SEAI) National Heat Study 2022, which highlighted the significant potential of district heating, using renewable energy sources, to meet heat demand in Ireland. District heating currently accounts for a very small share of the Irish heating sector; estimated to be significantly less than 1%, representing one of the lowest shares of district heating in Europe.

Climate Action Plan 2021 affirmed the significant contribution district heating can make to increasing the level of renewable energy in the heat sector and reducing emissions. Climate Action Plan 2023 builds further on this commitment, including a target to deliver of up to 2.7TWhr of district heating by 2030.

Climate Action Plan 2024 confirmed the Climate Action Plan 2023 targets, as well as committing to drafting of the General Scheme of a Heat Bill to establish a regulatory model for district heating that ensures consumer protection and the delivery of a vibrant district heating industry. Climate Action Plan 24 also commits to introducing a mandate on the public sector to connect to district heating, where feasible.

The General Scheme of the Heat (Networks and Miscellaneous Provisions) Bill 2024

A District Heating Steering Group was established, in line with the 2021 Climate Action Plan commitment, to report to Government with recommendations to develop the district heating sector. The District Heating Steering Group considered the development of district heating in Ireland and the regulatory framework required to protect consumers. The Steering Group focused on the key areas required for the development of district heating: regulation, planning, funding, and research.

The government decision of 11 July 2023 approved the District Heating Steering Group Report and the drafting of the General Scheme of a Heat Bill by the department. The department has engaged bi-laterally with relevant government departments, the Office of the Attorney General and State Agencies, in the development of the General Scheme.

The main provisions of the bill have been developed to:

• Provide the legislative framework to support the development and expansion of district heating networks.
• Facilitate the growth of an efficient, low carbon district heating industry that will contribute towards decarbonisation of Ireland’s heat sector and assist in meeting national and international targets.
• Facilitate regulatory provisions to ensure price protections for both existing and new district and communal heat consumers.
• Establish a National District Heating Centre of Excellence within the SEAI to centralise the approach to development of the sector to ensure balanced and timely delivery of district heating networks.
• Establish a Heat Network Authority, which will provide a centralised approach to the strategic development of the district heating sector on a national basis.
• In line with the recommendation of the District Heating Steering Group Report 2023 the Bill makes provision, in the longer term, for State ownership of district heating infrastructure.

Infrastructure, Climate and Nature Fund

The Infrastructure, Climate and Nature Fund (ICNF) is one of two funds established this year to manage windfall capital tax receipts, to help deal with future expenditure objectives and pressures.

The dual objectives of the ICNF are to provide resources to help manage the pro-cyclicality of public spending and to invest in the transition to climate neutrality and in nature restoration. Up to €3.15 billion in the ICNF is being set aside for the multi-annual funding of designated environmental projects over the period 2026 to 2030 to support the transition to a low carbon economy and improved environmental outcomes.

The department is currently working on business cases for programmes that are to be proposed as Designated Environmental Projects under Section 20 of the Future Ireland Fund and Infrastructure, Climate and Nature Fund Act 2024.

The Development of a National District Heating Infrastructure and Market is one of five programmes that target actions under the Built Environment Sectoral Ceiling and are being prepared as part of an overall programme on delivering critical renewable heat actions under the built environment sectoral ceiling.