Mr. Samuel Geraghty:

I thank the committee for the privileged invitation to speak today. EHeat Ireland, EHI, is an industry-led member trade association established in 2021 to promote the acceleration of decarbonisation of heat through electrification. The association is an all-Ireland body led by industry experts committed to promoting the utilisation of renewable electricity to generate decarbonised heat as an economically viable alternative to fossil fuels and to lead to a significant overall reduction in total energy usage through the utilisation of highly efficient technologies.

To put it in context, Ireland is a world leader in the deployment of renewable electricity, with a sixfold increase in the share of renewable electricity generation seen between 2005 and 2020, from 7% to 39.1%, and with ambitious targets to increase renewable electricity share to 80% by 2030. Regrettably, this is currently not the case for renewable heat, with Ireland’s current renewable share in the heat sector at 6.8% in 2021 in comparison with the European Union average of 22%. Citing the Sustainable Energy Authority of Ireland, SEAI, national heat study commissioned in 2022, Ireland’s industrial heat demand is 40% of Ireland’s total heat demand at 17.5 TWh and is estimated to be responsible for nearly 5 million tonnes of CO₂emissions annually. Industry emissions accounted for 10.2% of Ireland’s total emissions in 2021. This is steadily increasing in line with economic trends and has grown annually since 2012.

EHI welcomes the recognition in the climate action plan 2023 of the role greater electrification of industrial heat combined with energy efficiency measures can contribute to carbon abatement, noting the requirement of policies and appropriate supports to facilitate industry investment in low-carbon processes. Specifically, the goal of electrifying 55% of low to medium grade heat in industry is a clear and realistic target to decarbonise industrial heat. Electrification of industrial heat is a vital underexploited tool in our decarbonisation efforts. The national heat study commissioned by SEAI looked at a variety of scenarios as to how to achieve net zero by 2050. The report notes:

Net-zero emission pathways with the lowest cumulative emissions use more electric heating technologies. Scenarios focused on a hydrogen gas grid have more cumulative emissions.

Therefore, EHI believes that focusing on the immediate opportunity of electrifying heat will give Ireland the most realistic pathway of staying within our legally mandated carbon budgets. The report also notes that approximately 50% of all industrial heat demand is low to medium grade, below 150C and identifies electrification and industrial-scale heat pumps as key technologies to achieve net zero for this heat demand. Additionally, the report identifies decarbonisation of the industrial sector as the most effective in terms of emissions impact and cost effectiveness, in comparison with the residential and commercial sectors. Thus, there is a concrete evidence base support the electrification of industrial heat in the context of technical suitability and emissions impact for investment employed. However, there are numerous barriers facing the sector in accelerating decarbonisation of heat through electrification.

Electrification and heat pump technology are an attractive option for industry heating in scenarios where the electricity price is low relative to the price of fossil fuels. In a European context, this price ratio varies significantly. In countries such as Norway, Finland and Sweden where there is a large uptake in electric heating technology this ratio is less than 2:1, while in Ireland it is typically above 4:1. This variation in electricity and gas prices can be a significant barrier to investment in these technologies.

For instance, applications which have a payback period of one year in Norway may have a payback period which exceeds five years in Ireland at current utility rates, noting that payback periods demanded by industry are typically in the range of three years. We welcome the recent update to the SEAI support scheme for renewable heat, SSRH, in March of this year, which offers an installation grant of up to 40%, up to a maximum of €1 million, linked to the efficiency of a given installation. Our members see this as a positive step forward to accelerating decarbonisation of industrial heat and hope to see this expanded in the future. We note that there is an existing mechanism for ongoing support for biomass and anaerobic digestion-based renewable heating, with a 15-year tariff. We feel that expanding this scheme to include a tariff for industrial heat has the potential to accelerate this decarbonisation effort and to increase uptake of this grant scheme by guaranteeing industry long-term support in its decarbonisation efforts.

Another barrier to industry uptake of electrified heat is the connections policy administered by ESB Networks. The installation of electrification technologies, in some instances, requires an increase in the maximum electricity demand level, known as maximum import capacity, MIC, to a given industrial facility. This process involves considerable negotiation with ESB Networks and requires considerable investment from the industrial user. It leads to an increase in the payback period of electrification applications and decreases the attractiveness of the uptake of this technology. One advantage of heat electrification technology, in comparison to traditional fossil fuel-based heating, is its flexibility in operation. There is potential to develop a flexible connections policy with ESB Networks where an operation can be scheduled in accordance with grid supply and demand, which will enable greater utilisation of intermittent renewable electricity at times of surplus generation and decreased stress on the electricity grid at times of high demand. This policy would lead to direct benefits in the context of carbon emissions related to industry and increased renewable electricity utilisation. We note the potential of this technology to abate 3 metric tonnes of carbon dioxide annually, avoiding up to €300 million in annual carbon taxes, decreasing annual fossil fuel imports by €470 million, increasing the utilisation of surplus renewable electricity, delivering an economic benefit of up to €200 million a year and greater utilisation of the electricity network, and generating an additional €50 million in revenue. These benefits, in tandem, could create an estimated 10,000 local jobs, increase air quality, health and well-being and decrease electricity costs for consumers through more efficient use of the electricity grid.

In summary, the acceleration of electrified heat for industrial users has several benefits in the context of economic development and mitigation of climate change. Accelerated adoption of this technology through a supportive policy framework will enable utilisation of indigenous renewable energy, facilitate the security of Ireland’s heat supply, increase the competitiveness of Irish industry in a global market, generate employment locally and make a sizeable contribution to Ireland’s decarbonisation efforts through lower emissions.