From:Department of Climate, Energy and the Environment

Legislation will accelerate the deployment of district heating, strengthen consumer protections and boost Ireland's energy security

Minister for Climate, Energy and the Environment Darragh O'Brien has secured Government approval for revisions to the General Scheme of the Heat (Networks and Miscellaneous Provisions) Bill 2024. This legislation will put a regulatory framework in place to enable the roll out of district heating, contributing to the decarbonisation of Ireland’s heating sector and helping to meet national climate targets.

District heating uses insulated water-pipe networks to deliver heated water from centralised heat sources – to networks of residential, commercial and public sector buildings.

Research by Codema (Dublin’s Energy Agency) has shown that, collectively, there are enough waste heat and renewable sources (for example, waste heat from data centres or pharmaceutical plants) in Dublin to heat over 1 million homes and that approximately 80% of heat demand in Dublin could be met by district heating by 2050. The National Heat Study published by SEAI (Sustainable Energy Authority of Ireland) found that district heating has the potential to supply a significant share of Ireland's future heating demand.

The Tallaght District Heating Scheme is Ireland's first district heating network using recovered waste heat from a data centre. Since 2023 it has generated almost 6,000 MWh of energy and is projected to generate around 270,000 MWh over its 30-year lifetime. This has helped to avoid approximately 1,265 tonnes of carbon dioxide emissions in 2024 alone. By efficiently re-using waste heat, the scheme reduces reliance on fossil fuels and optimises recyclable energy, establishing Tallaght and South Dublin County Council as leaders in local energy action.

Welcoming the decision, Minister O'Brien said:

"This step in the process represents another important milestone in delivering a cleaner, more resilient and more affordable energy future for Ireland.

"District heating has enormous potential to transform how we heat our homes, businesses and public buildings – by capturing energy that would otherwise be wasted, and putting it to productive use.

"This legislation will provide the certainty needed to attract investment, accelerate the development of district heating projects across the country and ensure that consumers are protected through robust regulation. This legislation will play an important part of strengthening Ireland's long-term energy security."

Consumer protections for district heating and communal heating customers

The Heat (Networks and Miscellaneous Provisions) Bill will introduce consumer protections for existing and new district heating and communal heating customers, through price regulation of supplier tariffs. The CRU (Commission for Regulation of Utilities) will have powers to regulate the sector to ensure that providers have regard to vulnerable customers and have appropriate customer complaints processes in place. The CRU will also be granted a range of sanctions to pursue heat undertakings that fail to comply with the conditions of their licence.

The revised General Scheme also provides greater policy and regulatory certainty to potential project sponsors and investors – to drive the growth of district heating in Ireland. This is in keeping with the recommendations of the District Heating Steering Group, which have been adopted under the Climate Action Plan.

Accelerating the development of district heating is a key commitment in the Programme for Government. It forms part of the Government's wider ambition to future-proof Ireland's built environment, while delivering cleaner, more efficient energy solutions for communities across the country.

Government-supported district heating projects in Ireland

To date Government has supported two district heating projects in Ireland. The Tallaght District Heating Project, which is now operational, was developed by South Dublin County Council and received a total of €4.92 million funding from the Climate Action Fund (CAF).

Dublin City Council is leading the development of the Dublin District Hearing Project. The CAF has allocated €50 million funding to the Dublin District Heating Project, which will use waste heat generated by the Dublin Waste to Energy plant in Poolbeg.

In July 2025, the Minister approved a further €5 million from the CAF to support pre-construction of new district heating projects and as part of the Department's Sectoral Capital Plan for 2026-2030 under the National Development Plan. €50-100 million of ICNF (Infrastructure, Climate and Nature Fund) funding was allocated to support the construction of district heating projects.

District heating uses insulated water-pipe networks to deliver heated water from centralised heat sources to networks of residential, commercial and public sector buildings. There are approximately 70 million district heating customers across the EU. Similar but smaller heat networks supplying heated water to single buildings or complexes are commonly described as “communal networks”.

Key revisions to the General Scheme:

Minister O’Brien brought several revisions to the General Scheme to Cabinet this week, which were approved. These included:

Climate Action Fund (CAF) support for the pre-construction of district heating projects:

In July 2025, Minister O’Brien approved €5 million from the Climate Action Fund (CAF) to support pre-construction of district heating projects. Following a competitive selection process, it is expected to support 5-7 district heating projects.

As part of the Department's Sectoral Capital Plan for 2026-2030 under the National Development Plan, €50-100 million of CNF (Infrastructure, Climate and Nature Fund) funding was allocated for district heating infrastructure. The scheme is at the design stage and will be administered through the District Heating Centre of Excellence in the SEAI (Sustainable Energy Authority of Ireland). It is expected that the grant support will be available from the start of 2027 until the end of 2030, up to a maximum of 50% of eligible costs.

Requirement for data centres to connect to district heating networks:

Article 26 of the Energy Efficiency Directive requires data centres with a total rated energy input exceeding 1 MW to either repurpose their waste heat within a district heating network, or adopt an alternative waste heat recovery application, unless they can show that it is not technically or economically feasible after conducting a cost-best analysis. This will be binding in Irish law as soon as the Energy Efficiency Directive is fully transposed.