The Government published the General Scheme of the Heat (Networks and Miscellaneous Provisions) Bill 2024 (Bill) in early November 2024 to support the nationwide roll-out of district heating. What do you need to know?

When will the Bill take effect?

The Bill is at the general scheme (or draft bill) stage. It will be implemented on a phased basis following progression through the legislative process and when enacted.

To whom will the Bill apply?

District heating uses a centralised heat source to deliver thermal energy in the form of hot water through a network of highly insulated pipelines to heat multiple buildings and customers across a wide geographical area, such as across an entire village, town, or city, or for large energy users such as large industrial facilities, pharmaceutical companies or data centres. District heating is not currently regulated in Ireland, except for the assignment of functions under the European Union (Renewable Energy) Regulations 2022.

Proposed effects of the Bill

SEAI has previously identified that district heating has the potential to supply over 50% of heat nationally, particularly in larger urban areas. There are approximately 70 million district customers in the EU, and district heating is being used as a key technology to decarbonise heat. Where waste heat and renewable sources are prevalent in Ireland, there is potential to use this technology to enable Ireland to meet its ambitious climate and energy targets and reduce costs for consumers.

The Bill seeks to:

• Provide the legislative framework to support Ireland’s development and expansion of district heating networks.
• Support the growth of an effective low-carbon district heating industry, which will help Ireland meet its national and international climate targets.
• Establish a regulatory model to provide price protections for existing and new large and small heat network consumers.
• Establish a new body known as the Heat Network Authority, which will provide a centralised approach to the strategic development of the district heating sector on a national basis.
• Establish a National District Heating Centre of Excellence within the SEAI to centralise sector development and balanced and timely delivery of district heating networks.
• Provide, in the long term, for State ownership of district heating infrastructure, similar to gas and electricity networks. The aim is for district heating to develop nationally as a sector under central direction, with a single State entity or a utility overseeing the development and expansion of networks. This is in line with the recommendation of the District Heating Steering Group Report 2023 (Report), as commented on by us here.

In tandem with the publication of the Bill, the Department of the Environment, Climate & Communications (DECC) announced that a process to access Infrastructure, Climate and Nature Fund investment for district heating projects has also started. The DECC, the SEAI, and local authorities are all taking an active role in developing the sector’s project pipeline.

Heat network developers who will be licensed will carry out the construction and development of district heating networks; licensed heat network operators will be responsible for operating and maintaining systems, including interconnections with other systems and for distributing heating and cooling within heat networks. Licence application and grant procedures are set out and other relevant consents would be required. The role of the Commission for Regulation of Utilities in monitoring the development of the sector is also outlined in the Bill. The SEAI is designated as the Heat Network Authority on an interim basis, with corporate governance oversight provided by DECC. The Bill is also intended to provide local authorities with the power to acquire or sell heat, construct, develop, maintain and improve heat networks, distribute heat and enter into collaborative agreements with other local authorities. The Bill obliges public sector buildings to connect to available district heating networks where technically and economically feasible.

The Bill has been developed by DECC in line with the recommendations of the District Heating Steering Group set out in the Report, following consultation with relevant departments, agencies and stakeholders. It seeks to provide a legislative and regulatory framework for the district heating sector in Ireland. The Report recommended, and the Bill reflects, that private sector involvement should be encouraged and facilitated as much as possible, with the District Heating Centre of Excellence to provide centralised support for district heating developers. There will be challenges, but also opportunities, in scaling up to deliver such infrastructure.

Contact Us

For more information or advice on how the Bill will impact infrastructure projects and construction contracts, please contact Cassandra Byrne, Jarleth Heneghan, Fergus Devine or your usual William Fry contact.