Dr. David Connolly:

We have never done the analysis. It is a very good point. It is a piece of work that we would like to do, as we presented at our AGM last week, so, hopefully, in the near future, we will be able to give the committee actual numbers. Off the top of my head, I can give some that would be indicative or at least analogous to what I think the likely outcomes of such a study would be.

The first point is the heat density in our urban areas. This is the magic word. Some of the largest district heating areas in Europe are in Milan, Brescia and Zagreb, all very warm places, and all because of heat density and how close buildings are put together. If we look at our heat density, that is the metric that SEAI and the University of Flensburg used to say that Irish buildings could convert about half of the building stock to district heating. In those areas, I would be astonished if district heating is not a magnitude cheaper than the cost of everyone putting in their own individual heat pump. Off the top of my head, I would say that we should be getting something like a 50% reduction in installation costs when comparing one to the other. When calculating the cost of building the network, building the heat facilities and connecting buildings to one another versus every single building putting in its own heat pump, the district heating network should come out at something like half the cost.

The reason is this. If we imagine that we all put in a diesel generator to produce electricity in each of our homes versus building and sharing a power plant, the cost of us all having an individual diesel generator means that we all need enough capacity to cover peak demand every day of the year. It is the exact same concept with district heating. We could put a large heat pump on a district heating network and have much lower investment costs than having an individual heat pump in every single building because we are effectively all sharing the cost of a very large heat pump. I am not sure if these numbers would be specific to Ireland but from seeing it in other places and with people having done projects, it has typically been somewhere in the region of half when people shared a network and shared the generation capacity versus doing it all on their own.

The other big factor in all of this is the price of generating heat. If I had been asked this question two years ago, I would have given a bunch of modelling results. What Professor Mathiesen showed the committee is the real world that everyone was trying to model for the last 20 years, which was that while we were all seeing gas prices double, triple and quadruple because we were basing our heat supply and district heating on waste heat streams and locally available renewable heat, they kept the price of district heating stable. Off the top of my head, I would say that it could have saved us some €500 million to €1 billion on fuel costs last year if we had magically had district heating in our cities instead of natural gas. It was for that reason that, as Professor Mathiesen said, even though Denmark has the highest share of district heating in Europe, it had record installation levels throughout all of last year. I was astonished when I heard the numbers because I know how many homes Denmark has converted, but that is the underlying driver of all of that.