Ireland proposes legal framework for district heating

>The proposals are set out in the General Scheme of the Heat (Networks and Miscellaneous Provisions) Bill 2024, which will proceed through the legislative process in the Oireachtas. The Bill aims to create a robust framework for district heating networks in Ireland by providing legislative support for their development and expansion.

District heating is a system that supplies heat to multiple buildings from a centralised source, distributing it through a network of insulated pipes to homes, offices and other buildings over a wide area. This system can use various heat sources – such as waste facilities, or large energy users like data centres – to heat thousands of buildings across a village, town or city. If the heat source is low carbon, it can decarbonise an entire district almost instantly and enable the switch away from fossil fuels as Ireland’s main heat source. 

The proposals in the Bill include regulatory provisions to ensure price protections for both existing and new district and communal heat consumers. The Bill also proposes establishing a Heat Network Authority to centralise the strategic development of the district heating sector on a national basis. In line with a 2023 report from the government-commissioned district heating steering group, the proposed regulatory framework allows for the long-term state ownership of district heating infrastructure.

Garrett Monaghan, energy and infrastructure expert at Pinsent Masons, said: “The benefits of district heating include reduced carbon emissions in the heat sector, better uptake of renewable and waste energy, cost-effective low carbon heat supply, security of supply, and new investment opportunities in Ireland. However, district heat requires significant resources, needing specialist skills and knowledge.”

This Bill aligns with Ireland's district heating goals outlined in Ireland’s 2024 Climate Action Plan. By 2025, the plan aims for up to 0.8 TWh of district heating installed capacity across residential and commercial buildings, increasing to 2.7 TWh by 2030. 

The Irish government also envisions using zero-emissions biomethane for heating. It targets up to 0.6 TWh of heating provided by biomethane by 2025, and up to 1.1 TWh by 2030. The Climate Action Plan acknowledges that approximately 50% of Ireland's heat demand can be met through district heating. However, achieving this will require significant resources to install a pipe trench network of approximately 1,000 km along Irish roads to transport heat from central sources to buildings within the network.

Ireland’s new Heat Bill is part of a wider trend across the EU and its member states to enhance district heating systems and reduce carbon emissions. The recast Directive (EU) 2024/1275, which came into force in May 2024, focuses on improving the energy performance of buildings, which includes provisions for district heating and cooling systems. The directive sets out minimum requirements for the efficiency of these systems, which will be gradually tightened to ensure a fully decarbonised supply by 2050. This includes revising the definition of efficient district heating and cooling to facilitate the gradual incorporation of renewable energy and waste heat.

In April 2023, the European Union provided €401 million in support for the Czech green district heating scheme. The German government launched a €3 billion programme in 2022 to support new heat networks as well as the decarbonisation of existing networks. The UK government has also recently announced that six towns and cities will pilot clean heating innovation as part of the country’s first heat network zones. The pilot projects involve technology that recycles excess heat from sources like data centres or factories to provide buildings and homes with low-cost and low-carbon heading.