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Minister O'Brien approves €5 million for Pilot District Heating Projects
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9 pilot efficient district heating projects allocated pre-construction support
Minister for Climate, Energy and the Environment Darragh O'Brien today announced €5 million from the Climate Action Fund for nine district heating projects at today's Irish District Energy Association Annual Conference. The public and private projects are across seven counties and are part of a district heating pilot scheme being delivered by the Sustainable Energy Authority of Ireland (SEAI) and the Department of Climate, Energy and the Environment.
Speaking at the conference today Minster O'Brien said:
"I am delighted to announce this funding for the district heating pilot scheme, which is another step towards our energy and climate goals. District heating can make an important contribution to Ireland's energy security, climate ambitions and decarbonisation targets, and is firmly reflected in our government policy. The Climate Action Plans and the Programme for Government, both recognise the strategic role that district heating will play in delivering a more sustainable, secure and affordable energy future."
District heating is a system that takes heat generated in a central location and distributes it in the form of heated water through insulated pipes to provide warmth and hot water to homes and businesses. District heating will help decarbonise both new developments and existing buildings at scale, with the potential to cost-effectively deliver up to 4.6 TWh of heat in Ireland compared to other renewable heating technologies.
The €5 million support package for the pre-construction costs is being used as a pilot fund to bridge the gap for district heating projects until significant capital funding is in place, and to ensure that efficient district heating projects are in position to avail of this future funding.
This funding is in addition to the €50 million to the €100 million already allocated to support district heating infrastructure, through the department's Sectoral Capital Plan. This significant level of investment demonstrates the government's strong and continuing commitment to district heating as a key element of Ireland’s decarbonisation pathway.
Minister O'Brien added:
"To date, over €266 million of support has been provided from the Climate Action Funding for over 1,500 projects to assist local communities, public bodies and drive innovation in climate action.
"Through this latest investment, we are supporting a broad portfolio of projects that will help build knowledge, experience and capability within the sector. Critically, this will ensure that Ireland is well positioned to identify the approaches that deliver the best outcomes for our communities, our economy and our climate objectives over the long term.
"I thank the SEAI District Heating Centre of Excellence for their support and assistance to make this allocation available as soon as possible. I prioritised these investments because it was clear that the sector was reaching a pivotal point and that strategic government support could help unlock its considerable potential. I look forward to seeing the progress of this industry, and this initial fund represents the first step in that journey."
William Walsh, CEO of SEAI, said:
"District heating, using waste and renewable heat and piping it into homes and businesses to keep them warm, works really well in other countries and it's something we need to do a lot more of here in Ireland. This pilot fund has the potential to be a real gamechanger. By financing these projects at a crucial stage, we are creating the pipeline of projects necessary to build an industry. We're also building the knowledge, skills and supply chain needed to develop at scale.
"Decoupling how we generate heat from fossil fuels has always been a major challenge and district heating has the potential to play a really important role in finding more secure and sustainable ways to heat our homes and buildings. SEAI is proud to have supported the department in establishing this fund. The projects could potentially heat a combined equivalent of over 25,000 homes, when constructed. Congratulations to these successful projects on what is a really significant milestone."
ENDS
Notes to the Editor
List of pilot projects selected for provisional support
| Location | Project Sponsor |
|---|---|
| Blanchardstown | Fingal County Council |
| Castletroy | Heatgrid Ireland |
| Drogheda | Louth County Council |
| Dundalk | Louth County Council |
| Galway | Heatgrid Ireland |
| Leixlip | Yuno Energy Heat |
| Monaghan | Monaghan County Council |
| Naas | Kildare County Council |
| Portlaoise | Heatgrid Ireland |
The SEAI and the Department of Climate, Energy and the Environment have worked to establish and implement this pilot programme. Following a highly competitive process, 9 efficient district heating projects have been identified for support.
Projects have been provisionally awarded funding, subject to final verifications and clarifications. The department, with assistance from the SEAI will work closely with successful projects to support their progression to the Letter of Offer stage. These projects represent a diverse range of locations, scales and delivery models. One of the key aims of this fund is to collect data, insights and learnings for future policy, investment and deployment of district heating networks.
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 low carbon energy sources, to meet heat demand in Ireland and identified district heating as a key technology in transition to net zero.
The introduction of the Climate Action Plans provided a wide range of policy and actions to tackle climate change throughout Irish society, including specific actions directly relating to district heating.
The establishment of the District Heating Steering Group, which was a commitment through the Climate Action Plan process, was a critical step on our journey towards developing district heating in Ireland. The report of the District Heating Steering Group published in July 2023, contained a suite of recommendations that set the future policy direction for the development of district heating. A key conclusion of the report was that public investment will be required to develop district heating across the entire project lifecycle.
Future Government Support
The Infrastructure, Climate and Nature Fund (ICNF) was established as part of Budget 2025 to manage windfall tax receipts and fund the climate transition by supporting designated projects over the period 2026 to 2030. A €500 million allocation for Department of Climate Energy and the Environment projects under the ICNF in the revised National Development Plan for 2026-2030 is focused on developing new markets to accelerate the diversification and decarbonisation of Ireland's energy sector.
Over the 5-year funding period, investments in early phase infrastructure for a National District Heating Market before the end of this decade will deliver key backbone elements. These will decarbonise heat for larger anchor customers in the short term and can be leveraged through follow-on investments to target smaller heat loads in the medium-to-longer terms. Developing this initial core infrastructure by 2030 will reduce heat emissions from connected buildings this decade. It will enable many more citizens, businesses and public bodies to decarbonise their homes and buildings throughout the 2030s and beyond.