Ms Yvonne Murphy:

Obviously, heat pumps are an incredibly important part of decarbonisation and the journey that we are on, but there is a critical mass that could potentially be lost if we move too prolifically across to heat pumps in areas that would be very effectively served by district energy. This is where the high-level strategy and planning are needed to make sure we identify where the heat demand and heat loads are, so we are able to say that these would be preferable for district energy rather than individual heat pumps, and we can then deploy the two technologies in a complementary way where it is most useful and efficient. We need to get out ahead of that.

One of the areas that is quite obvious is that there is no equalisation in terms of the financial incentive for individuals connecting and thinking about their own plans for how they are going to heat their homes, but also even in terms of the infrastructural load. That is where the grants come in. Dr. Connolly spoke about the UK. There are three areas of investment that are needed for a district heat network: one is the heat generation side, one is the consumer side and the other is the network side in-between, which requires significant capital expenditure, capex. It is a very high level, front-loaded investment but that investment serves needs for 50 years or thereabouts. As a result, it is significant in terms of what we are looking to achieve and put in the ground for future generations.

It is fairly well acknowledged and recognised that the State has a role in that. The UK is looking at 40% of support for capex, which sounds very large and daunting. If we look at the numbers in the Irish context, however, our overall target for 2030 is to achieve 2.7 TWh of district energy. If we translate that across, it would be a capex support of between €500 million and €1 billion. When we put that in the context of the retrofitting budget, for example, and the range of different things we are investing in, it is important that we see this for what it is, and that is the long-term investment that it represents but also the kick-start that the industry needs.

To go back to what Deputy O'Rourke and Dr. Connolly have said, it is really about market certainty and de-risking these projects. If we want to unlock the private sector investment that can introduce agility and that kind of capital injection that is needed for this kind of infrastructure to be developed, what we need is that de-risking. The market signal that this would send is that Ireland is open to this, that we are taking a partnership approach and that we understand that a leg-up is needed. It is not the case that we would envision that level of support in perpetuity, but, rather, that it be leveraged for the kick-start to which I refer, and it could then be tapered off as we get the sector off the ground.