Wed, Jun 15, 2022
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Neasa raising the exorbitant gas price increases as a result of a district heating system for residents of a Dublin 1 apartment complex.
Neasa Hourigan TD: What steps can the Minister’s Department take to ease the gas price increases that are being experienced by residents of Custom House Square, Dublin 1, who, as a result of a district heating system, are paying commercial rates?
Minister Eamon Ryan: I understand the development in question is heated by way of a local heating system, which is fuelled by natural gas. Gas and electricity retail markets in Ireland operate within a European regulatory regime, as we have just discussed, wherein those markets are commercial, liberalised and competitive. I am acutely aware of the impact current, internationally influenced, energy price increases are having on people and families. For that reason, the Government has introduced a series of measures to try to alleviate the impact, particularly on lower-income households.
The 2018 renewable energy directive includes, inter alia, provisions concerning the use of unavoidable waste heat when planning district heating and provisions requiring member states to facilitate the development of heating and cooling derived from renewable sources. District heating, within a structured framework, is a technology that offers the potential to diversify fuel supply used to heat the building sector. It can offer flexibility in fuel choice and the ability to adapt to changes in the economic and policy landscape.
The Climate Action Plan 2021 contains actions that will provide a solid basis for the appropriate expansion of district heating in Ireland, including the establishment of a multidisciplinary district heating steering group. The steering group, which is up and running and has met four times already this year, is working on recommendations to ensure there is a robust governance and regulatory framework in place, along with any legislation that may be required, in line with the requirements of the renewable energy directive and the energy efficiency directive.
Considerations in this regard will also encompass pre-existing district heating and local heating schemes already operating in Ireland.
Deputy Ó Murchú brought a similar issue in Louth to my attention, where a local heating system is powered by gas. I am aware of the development in the Deputy’s constituency. There are only a small number of such systems, but they have been badly hit by the impact of very high wholesale gas market prices. Our Department, through the steering group, will examine measures to explore what ways we can assist such developments to get out of what is now a high-priced system. It will not be an easy switch, but I am very much willing to investigate what policy levers we can seek to use in this regard.
Neasa Hourigan TD: I thank the Minister for his answer. I am interested in the differentiation we are making between local heating systems and district heating systems. It is not one with which I am familiar. In the case of the situation in the Custom House Square, there is a gas-based district heating system operated by Frontline Energy. Those residents are paying four times the higher end of the rates available to residential customers. We are all talking about the cost of living now, but this is causing considerable strain. Deputy Ó Murchú raised this issue with the Minister as well. I believe it is impacting Carlinn Hall estate in Dundalk.
In both cases, residents are paying prices that are just through the roof. We are now into the summer months and, hopefully, people will be able to make choices to reduce their heating costs. I take the point that there is a steering group on the regulation of district heating systems. We are also, though, on a timeline here in respect of autumn and people then heading into months of high energy use. I flag this point to the Minister.
Minister Eamon Ryan: Absolutely. District heating is going to play an extremely important role in the decarbonisation of the heating sector. There are certain areas, especially where waste heat is available, where this approach will be the preferred solution compared to retrofitting or insulating buildings. It can have real advantages and offer protection for our country. There are slight variations and different forms of these systems. Local heating systems, such as the two in question here, and especially where a specific development is concerned, be that an apartment or housing development, usually consist of a shared heating system, typically with a management fee structure. District heating, as I see it being developed, is more designed on municipal lines across a whole range of different developments and is planned by municipal local authorities and energy companies to help to funnel waste heat to a variety of areas.
These local heating schemes, which exist across the world and are effective, do not tend to use gas as the preferred heating solution. Typically, these types of systems use woodchip biomass or other similar supplies of fuel. One of the things we might do in conjunction with the Deputies is look at their constituencies to explore if there might be ways in which alternative fuels might be used to try to get these developments out of paying expensive gas market prices.
Neasa Hourigan TD: I see the differentiation being made by the Minister. To be honest, I do not know enough about Carlinn Hall to say what the situation is there either way. It is incredibly important, however, that we get this right. I am glad there is a steering committee and I agree district heating must be a major source and option in respect of providing power. I very much hope to see the steering group examine options such as combined heat and power, CHP, systems. I know from a previous portion of my life that such systems work well and especially in tight urban areas, such as in my constituency with Custom House Square. Therefore, I welcome this development, but I again flag the importance of the timeline in respect of the autumn and of ensuring there is some intervention in this regard between now and the onset of those autumn months for these residents now experiencing huge costs. I also highlight the importance, reputationally, of ensuring we do not make the concept of district heating a problem for people. We must make it a good choice and the best choice.