Minister O’Brien allocates €5 million to support development costs of district heating projects

Climate Action Fund support will bring industry to the next step; this early-phase investment will underpin the future development of district heating networks
 
Minister for Climate, Energy and the Environment Darragh O’Brien has approved the allocation of €5 million to support pre-construction development costs for efficient district heating projects in Ireland. The funding will come from the Climate Action Fund (CAF).
 
Government policy supports the expansion of district heating in Ireland, contributing to the diversification of fuel supply and decarbonisation of the heat sector. Deployment of district heating at scale, particularly in densely populated areas with readymade heat sources located nearby, is a key Government objective under the Climate Action Plan. It is also a key component in meeting the ‘Built Environment’ Sectoral Emissions Ceiling.
 
The State has financially supported the development of district heat networks in Ireland through the CAF. For example, there is a relatively large-scale scheme operational in Ireland, which was developed by South Dublin County Council (SDCC) in Tallaght, supported by the CAF. In addition, Dublin City Council is working to develop a large project that will use waste heat from the Dublin waste-to-energy facility in Poolbeg to heat public sector, commercial and residential buildings, initially in the adjacent area with plans to progressively expand into Dublin city.
 
District Heating Steering Group
 
In line with the Government’s District Heating Steering Group Report recommendation to provide financial support for district heating, the Minister is also seeking a multi-annual financial allocation – to enable the construction of efficient district heating projects over the period 2026 to 2030. As part of this process, and in line with the Infrastructure Guidelines, the Department – in partnership with the Sustainable Energy Authority of Ireland's District Heating Centre of Excellence – is preparing a business case seeking to establish future State funding (2026-2030) to support efficient district heating projects in suitable locations, usually urban areas with high heat density.
 
Support for the pre-construction development costs for efficient district heating projects is being introduced, to ensure efficient district heating projects are in position to avail of this future funding. It was critical that this funding was put in place to encourage a significant number of efficient district heating projects to be ‘shovel ready’ once future funds are available.
 
Minister O’Brien said:
 
“I am delighted to be able to announce the allocation of €5 million to support the pre-construction development costs of efficient district heating projects in Ireland. District heating will be a pivotal technology to help Ireland reach its climate ambitions, while also improving our energy security and affordability. This is evident through the success of the existing district heat scheme in Tallaght.
 
“I have seen an appetite in this industry to start developing projects immediately.
 
“This announcement will help industry to make the next step. When the pre-construction development fund is open, I encourage all potential efficient district heating project sponsors to apply. My Department will collaborate with the SEAI District Heating Centre of Excellence to develop this fund and make this allocation available as soon as possible. With a strong pipeline of projects ready to progress, funding this element now will set the district heating industry up for success, once the future state fund is in place to support the full construction of efficient district heating projects.
 
Fund availability
 
This fund will be open to both private and public authorities who want to advance efficient district heating in Ireland. It is envisaged that this funding can be used to support pre construction development costs. However, this allocation is intended to also support projects which have already started some of their development work.
 
The Government recognise that investing now in the early phase infrastructure will deliver key backbone elements for district heating networks that will decarbonise heat for larger anchor customers within this decade, and can be further leveraged, through future investment, to target smaller heat loads in the medium-to-longer term.
 
ENDS