Needs-Challenges-Barriers-Opportunities

Needs/challenges, barriers, opportunities

Country

Ireland

Urgent Needs/Challenges

Overview of completed questionnaires:

· In general the feeling is that DHC is not well developed in Ireland due to a lack of knowledge and understanding among the general public and a lack of commitment from policy makers – the government should showcase a number of demonstration projects and carry out a campaign to raise awareness.

· The perceived greatest driver for DHC in Ireland is Part L of the Building Regulations.

· The greatest barrier is the inability to trade surplus electricity from a CHP. The Electricity Regulation Act prevents the sale of electricity from CHP to multiple end users.

· Financial support for capital expenditure in the form of grants or tax incentives would help to develop systems in Ireland. Currently there is no specific support scheme for DHC.

· The CER currently governs the sale and supply of electricity and gas – they should also take control of the heat market. Regulation of the market is required as there are organisations currently operating in the sector that do not have the required knowledge and experience.

The most urgent needs/challenges for DHC in Ireland are:

· Removal of the barriers to trade surplus electricity from CHP plants.

· Regulation of heat. We need a regulator to; set the conditions for entry into the market, monitor pricing and generally protect the consumers.

· Implement specific support measures for DHC.

· Revise BER (DEAP) software to allow full consideration of DH.

— Currently no allowance exists for a centralised boiler vs individual boilers in apartment developments.

— Currently no allowance exists for instant hot water in DH (only for combi boilers). The minimum option available in the software is 110 L of hot water, which is very inefficient.

— The software penalises DH vs individual boilers. A biomass boiler @ 90% efficiency supplying a DH system becomes 75% on this software package. Hence the BER for an individual boiler is regarded as better than the DH solution.

· Removal of regulatory barriers in the development of CHP plants – licence process is cumbersome for CHP plant development. See below.

· Subsidise large scale DHC systems using the Public Service Obligation (PSO) levy. The PSO requires ESB Public Electricity Supply (PES) to purchase electricity from specified sources, including sustainable, renewable and indigenous sources. In addition, in the deregulated electricity market, not all customers will be invited to become customers by other suppliers and so a ‘public’ electricity supplier is required to meet their needs. The PSO levy is charged to all electricity customers and is designed to recoup the additional costs incurred by ESB PES in meeting these obligations.

· Increase biomass CHP Renewable Energy Feed in Tariff (REFIT) tariffs.

· Legislation on management and licensing structures for ESCOs.

· Inclusion in planning policy, i.e. a specific planning process for DH networks. Currently there is a lack of clarity regarding the planning application process.

· Aggressive implementation of energy policy.

· Need a unified voice/lobby for DHC development.

· Education regarding positive aspects of DHC.

Description of the situation regarding the initiation, expansion and refurbishment of DHC systems.

1) The key stakeholders in DHC in Ireland are:

· Local authorities

· Developers/construction companies

· CHP and DH designers

· Energy supply companies

· Government bodies

· Consulting engineers

· Equipment suppliers

2) What would be the decision making process?

· Is it technically feasible?

· Is it economically feasible?

· What are the regulatory requirements?

· Who will pay?

3) What are the main difficulties experienced in the decision making process?

· In the current economic climate financing projects is proving most difficult.

4) What is most common ownership of DHC? Who would own and operate? Is there a better model? In Ireland owners of individual developments generally own the DH system on site. Generally property management companies operate small systems. Energy management companies operate larger systems, Dalkia are dominant in Ireland. Currently there is no regulation of the heat market. The logical next step is for the Commission for Energy Regulation (CER) to take control of the heat market and set minimum requirements for operating DH systems.

5) How are consumers protected? Currently they are not protected by any government authority. They may be protected by law if they hold a contract with the heat supplier.

6) Are new measures needed to improve consumer protection, if so what? The CER needs to take control of the heat market as it has done with the electricity and gas markets.

Description of the areas in which the main cost savings in DHC systems can be made.

· No requirement for individual boilers which saves space and money.

· Less fuel will be used by a DH system with modular boilers as there is flexibility to shut down boilers and still meet heat demand, which is not possible with individual boilers.

Description of the areas in which policy-makers should intervene in the development of DHC.

The CER should take control of the DH market. The DCENR/SEI should implement a capital expenditure support programme specifically for DH.

The main developments expected by interviewees to have taken place in DHC by 2020 are:

· 1 or more of the main Irish cities will have a local authority owned DH system. Probably supplied with heat from a Waste to Energy facility.

· 1 or more of the main power stations will be converted to cogeneration and will supply heat to the neighbouring town.

· Increased presence of biomass and geothermal based DH systems.

Main Driving Forces

Description of the main forces driving the development of DHC in Ireland:

· The transposition of European legislation (i.e. EPBD) into our Building Regulations – Part L, SI 666. Energy from Renewables requirement within Part L (10 kWh/m2/yr). These guidelines are certainly encouraging builders/architects to design more energy efficient heating solutions for buildings. This has led to some small scale DH schemes in apartment block developments.

· Proposals for DH systems in Dublin and Cork from waste fired CHP, i.e. development of waste-to-energy plants.

· CHP Deployment scheme administered by SEI.

· ReHeat scheme.

· Carbon tax has just been introduced.

· Private business.

· Energy efficiency – financial savings.

· Security of supply – fluctuations in fossil fuel prices.

Description of the situation regarding financing of DHC projects.

· The main investors currently in DH are developers, local authorities and ESCOs. If specific financial support measures for DH were implemented more investors would be attracted and the technology would take off in Ireland.

· In general there are no regulations regarding returns on investment. However local authorities are required to follow specific guidelines. As a rule of thumb private investors look for short payback periods whereas local authorities can tolerate longer payback periods.

· The usual investment criterion is payback, although some investors are now willing to accept longer paybacks due to the environmentally beneficial outcome.

· Large high density mixed developments are desirable. The more customers connected the more predictable the heat requirement becomes from a statistical point of view. The more customers that can be connected for minimal capital outlay the better. Having a mix of customers helps to balance out any peaks/troughs in heat demand.

· Generally investor’s main priority is to achieve a good return on investment.

· One of the main investment risks is that customers may find alternative heat sources in the time it takes to develop a DH project. This makes it difficult to accurately assess the likely heat demand.

· Using heat only boilers to serve a DH system, particularly in a new build situation, is not generally cost effective because the revenue from heat sales is not sufficient to justify the capital investment. It is necessary to boost revenue by selling electricity. Therefore, it is likely that any future DH schemes in Ireland will only be commercially viable if the heat is supplied from a small CHP plant or is “free heat” from an appropriately sized power station co-located with the potential heat load.

Main Barriers

The main barriers to DHC in Ireland are:

Legislation

· The inability to trade surplus power from CHP plants. The Electricity Regulation Act 1999 effectively prevents the sale of electricity from CHP to multiple end users using a private wire network. This legislation prohibits the use of direct lines unless ESB has first refused permission for a connection to the national network and the CER has given its approval. This regulation provides a theoretical opportunity for the development of private wire networks, although, to-date, there has been no occurrence of any in Ireland as ESB have never refused permission for connection or the CER has never given permission.

· Lack of legislation on management and licensing issues for ESCOs.

· Lack of legislation and policy. There is no authority to regulate DHC.

· Planning permission for laying pipes – lack of clarity.

Other

· Understanding of the concept – solved by targeted communication, promotion and education by government agencies. Having successful case studies/demonstration projects.

· Lack of year round heat demand – solved by finding a summer demand for heat, perhaps to drive absorption chillers.

· Lack of joined up thinking between stakeholders.

· Economic reasons, high CapEx requirements – solved by providing financial support or tax incentives.

· Access to finance.

· Ireland’s high proportion of one-off houses and low density development – solved by planning for and building higher density developments.

· Access to cheap heat sources – solved partly by new WtE facilities.

· Assessment of potential heat demand.

Main Opportunities

The main opportunities for development of DHC in Ireland are:

· Using heat from Waste to Energy facilities. Ireland must divert waste from landfill hence there are a number of Waste to Energy plants in the pipeline.

· Using heat from combustion of biomass, i.e. wood chip, wood pellets and bio crops

· Using bio methane produced during anaerobic digestion of organic waste, i.e. municipal, industrial or agricultural.

· Using geothermal heat.

· Requirement to diversify energy sources. For security of supply issues Ireland needs to reduce dependence on imported fossil fuels.