This week saw an important milestone in the biomethane industry throughout Ireland with the announcement that DHL Supply Chain has agreed an €80M deal with Stream bioenergy which will fuel a fleet of up to 150 trucks for 10 years using biomethane as a source fuel.  DHL has teamed up with Tesco Ireland in the structure which involves 92 locally fuelled biomethane trucks for the retailer.

The news is important not just from the perspective of a major transport and logistics business outlining its intent to take a lead on decarbonising transport, but equally for a much-needed boost to the biomethane sector in Ireland. The Climate Action Plan (CAP) currently targets a 5.7TWh p.a. target in 2030 from an industry which is establishing itself from a relative standing start.

Figure 1: Pictured from L-R; Brian Kennedy (Head of Client Origination, ElectroRoute), Mick Kelly (Operations Excellence DIrector, DHL Supply Chain Ireland), Caoimhe GIblin (Commercial Director, ElectroRoute) [Conor McCabe Photography]

ElectroRoute’s Role

ElectroRoute is thrilled to have partnered with DHL in its journey to decarbonise its road transport fleet by providing a cross-border biomethane shipping and certificate management service which utilises our ISCC-certified European gas platform.

Through this cross-border biomethane shipping service, ElectroRoute has enabled DHL to immediately operate renewable-fueled trucks in Ireland. It takes time to deliver high-quality Anaerobic Digestion (AD) plants through the consenting and construction phases, and this innovative structure serves to allow a ramp-up in the fleet in advance of the indigenous solutions.

Over the last number of years, ElectroRoute has developed a comprehensive European platform which now sees us registered and actively trading on 14 cross-border interconnection points and operational in 11 European markets.

Through 2022, ElectroRoute flowed more than 2TWh of gas across Europe.

Moreover, ElectroRoute is accredited by ISCC to handle and ship biofuels throughout Europe. This unique platform means that ElectroRoute is positioned to act as a strategic shipper to Irish, European and multinational organisations seeking to transport and supply biomethane from source to use while crucially maintaining the green credentials of the physical biomethane.

Figure 2: ElectroRoute’s Gas Hub activity

Importance to Biomethane Targets

The Irish Government, and many others throughout Europe have identified biomethane as a carbon-neutral fuel which will act as a major source of decarbonisation for hard to electrify industries.

While the Government’s target of 5.7TWh production in 2030 (and up to 1TWh by 2025) is of course challenging to achieve in the time permitted, it equally should not act as a ceiling for our longer-term ambitions on the use of renewable gas on the island of Ireland. Gas Network Ireland, in its Gas Forecast Statement 2022[1], indicates a gas demand in the Republic of Ireland of 52.4TWh (all island demand of 72.9TWh). With the right balance of incentive and obligation, it’s entirely possible to look to the likes of Denmark which will likely achieve 100% of demand supplied with renewable gas between 2030-2035.

Importance of Biomethane in Transport

It’s clear that the transport sector needs broad-based solutions to support its legal requirements under the CAP Carbon Budgets, and while much hope is placed on the electrification of the broader transport fleet, it is widely understood that this will not resolve all transport emissions challenges. With hydrogen still in its infancy and, in Ireland at least, requiring major success in the cost of floating offshore wind as an input fuel, there is a need to emphasise the possibilities in other sectors. In Carbon Budget 1 (2021-2025), Ireland has already utilised circa 42% of its allowable budget of 50Mt CO2eq. in the transport sector.

It is important to note that at the end of a Carbon Budget cycle, we don’t start again from scratch but instead absorb any emissions which have overrun from the last completed budget. It is therefore critically important in all carbon budgets that policymakers do not make the mistake that the emission reduction effort can be rear-loaded. Any such delay in action will only serve to make the subsequent Carbon Budget more challenging to achieve. In the graphic below, the horizontal lines represent the total Carbon Budget 1 and 2, reflected in annual average terms.

Figure 3:Source: EPA

Should there be a budget overrun in Carbon Budget 1, then Carbon Budget 2 will automatically be set at a lower limit to counteract this. Biomethane offers a realistic prospect of supporting the decarbonisation of the heavy goods fleet in particular and doing so immediately. Initially, at least, this will be from certified renewable biomethane and subsequently from indigenous sources.

Contact Us

If you want to get in contact about Biomethane offtake or support in procurement and/or shipping, please reach out to our team at clientservices@electroroute.com who can support you.

About ElectroRoute

ElectroRoute is an international, renewables-focused, energy trading and services company. The company has grown rapidly from its establishment in 2011 to now employing over 120 professionals based in Ireland, the UK, Europe, and Japan.

The company’s vision is to make net zero a reality by solving the commercial mechanics of a decarbonised energy system. Its team of traders trade and optimise over 1.8GW of renewable and storage assets on a 24*7 basis using its unique, tech-driven, AI-powered platform, ElectroRoute CORE.

ElectroRoute operates a gas operations desk which ships biomethane throughout Europe on behalf of its client base, flowing more than 2TWh of gas in 2022.

[1] https://www.gasnetworks.ie/docs/corporate/gas-regulation/GNI-2022-Gas-Forecast-Statement.pdf

The post ElectroRoute Provides Biomethane Services to DHL appeared first on ElectroRoute.

Energy storage is a critical enabler of our renewable energy transition, and its importance is starting to be recognised by stakeholders across the energy sector.

To date, the storage market in Ireland has been focused on short-duration lithium-ion batteries, that can provide the fast-acting backup needed to support the power system with growing levels of renewables. There are currently 670 MW of primarily short-duration batteries in operation on the island of Ireland.  These batteries contain frequency events by injecting power into the grid in milli-second timeframes. This has enabled EirGrid and SONI to reduce their reliance on fossil fuel spinning reserves allowing more space on the system for wind and solar generation.

The short-duration battery market is saturated at present so attention is turning to longer-duration batteries and other storage technologies that can provide additional benefits and capture other potential revenue streams such as energy arbitrage, peak shaving, capacity adequacy, congestion management etc. These longer-duration technologies will allow us to shift large amounts of renewable energy to help balance the system, reduce renewable dispatch down and provide an alternative to fossil fuels during times of low renewable output.

At ESI we carry out a pipeline survey of our members each year to understand how many energy storage projects are in development and what stage they are at. Our latest results as of the end of 2022 show there is a huge pipeline of just over 4,300 MW of battery projects in development with the majority already through the planning system and either in the grid connection process or awaiting the next grid connection round. These projects tend to be focused on durations of around 2 hours but the key benefit of storage is that it is flexible and can adapt to system needs and new business cases as markets develop.

How much energy storage will we need?

The battery storage deployed today is enough to meet Ireland’s short-term reserve requirements, but we are going to need a lot more energy storage from a variety of technologies with different capabilities by 2030. This will be essential to manage the large volumes of renewable generation necessary to meet our climate action targets.

In 2022, ESI carried out a piece of work with energy consultants Baringa to try and estimate how much energy storage might be needed by 2030 and what benefits it can bring to the power system and consumers. The output ‘Game Changer’ shows that energy storage can provide several major benefits besides providing zero-carbon reserve services.

Baringa modelled a 2030 Irish power system with high levels of wind and solar and compared a base case with no additional storage buildout than what is already connected today against multiple scenarios with an additional 2 GW of storage of different durations from 2 hours out to 100 hours.

The results show that the longest-duration energy storage technologies can reduce power sector emissions by up to 50% in 2030. This is particularly important because at this stage these residual emissions are the hardest to abate so energy storage plays a critical role in soaking up renewable oversupply and displacing fossil fuels at times of low renewable generation.

The study also showed that medium-duration storage (i.e. 2-6 hours duration) can play an essential role in providing quick-to-deploy peaking capacity solutions to alleviate short-term periods of congestion and system stress. These can help mitigate against volatile wholesale prices, particularly during winter periods.

Longer durations of 24 hours plus are particularly important for solving generation constraints and for absorbing renewable energy that would otherwise be dispatched down. These storage technologies can reduce dispatch down due to renewable oversupply by approximately 55% in 2030.

Finally, Baringa estimated that each of the storage scenarios would deliver a net economic benefit for consumers when taking into account the locational value of energy storage. This ranged from €30 million up to €85 million per annum in the longer duration storage scenario.

Baringa’s assumption of an additional 2 GW of energy storage by 2030 should be seen as the minimum we will need. More will very likely be required, mainly as we aim towards net zero. Putting the right market frameworks in place will be essential to ensuring investment in the quantities and types of energy storage that will deliver the best value to the system and to consumers.

Challenges and Opportunities

Delivering the volumes of energy storage we will need for 2030 and beyond will require coordinated policy action and specific market incentives to drive investment.

There are several existing market policies and systems which were designed around conventional generation and need to be updated to accommodate energy storage. For instance, the TSOs’ market systems are undergoing needed upgrades so they can more effectively utilise operational storage assets in the energy market.

Grid policy also needs to be updated to allow storage projects to connect to the system quicker and make use of their full operational capability. We are seeing that storage can face restrictions in terms of its ability to export or import at certain times. This needs more appropriate policy from the Regulators and System Operators to recognise the value storage can bring to the system as a flexible asset.

Right now there is no long-term investment signal for energy storage. The energy market is focused on short-term price signals and optimising the dispatch of generation and the DS3 market is moving this way too with the coming introduction of short-term auctions. The capacity market is the only market where storage can access long-term contracts, but storage is disadvantaged here due to de-rating factors and price caps designed around the costs of new gas generators.

Storage shares many of the same characteristics as renewable generation in terms of being a high capex/low opex technology but does not currently enjoy the benefits of having long-term investment support that is available through the RESS scheme in Ireland and the anticipated CfD scheme in Northern Ireland.

Things may be about to change with the ongoing EU market design reforms and the expected publication of the first national policy for electricity storage in Ireland later this year. In addition, we expect further progress on Northern Ireland’s Energy Strategy including a new route to market for renewables and supporting technologies.

This could see the introduction of new market frameworks for energy storage that allow multiple storage technologies to compete for long-term price support. ESI has produced a position paper on how this procurement framework might work including how different technologies could be valued for their contribution to the system.[1]

Ireland can continue to be a world leader in renewable integration by putting in place investment signals for longer duration energy storage as we increase our wind and solar energy and strive towards our carbon reduction targets.

Guest Blog is written by Bobby Smith, Head of ESI,

Energy Storage Ireland (ESI) is an industry representative association comprised of members who are active in the development of energy storage in Ireland and Northern Ireland. Our aims are to promote the benefits of energy storage in meeting our future decarbonisation goals and to work with policymakers in facilitating the development of energy storage on the island of Ireland. We represent over 55 member companies from across the energy storage supply chain. You can find out more about ESI by visiting www.energystorageireland.com or by contacting info@energystorageireland.com

[1] https://www.energystorageireland.com/wp-content/uploads/2022/11/ESI-Position-Paper-on-a-Procurement-Framework-for-Long-Duration-Energy-Storage.pdf

The post Guest Blog: The Potential for Energy Storage in Ireland appeared first on ElectroRoute.

Since our last update in 2020, there has been huge change – and even some history made – in the Irish offshore wind sector, with momentum only continuing to build. This updated insight provides an overview of recent developments.

Passage of the Maritime Area Planning Act 2021

The Maritime Area Planning Act 2021 (the MAP Act) was signed into law on 23 December 2021. It provides new consenting processes for foreshore licences, foreshore leases and, importantly, planning permissions for various marine projects including offshore renewable energy infrastructure. It also creates a new regulatory authority and a regime for designating marine protected areas.  In particular, this ambitious legislation provides a “fit for purpose” mechanism for the consenting of offshore renewable energy projects in a way that complies with European environmental assessment obligations, facilitates Aarhus Convention-compliant public participation, and gives Ireland a realistic chance of delivering new renewable energy sources allowing it to meet its 2030 climate change targets. Some of the key changes are highlighted below:-

The Maritime Area Regulatory Authority

The MAP Act establishes the Maritime Area Regulatory Authority (MARA). MARA will have the power to grant Maritime Area Consents (MACs), discussed below and will take over responsibility from the Minister for Housing, Local Government and Heritage for the issuing of licences to conduct surveys in the marine environment (currently termed foreshore licences in Ireland). It will also have various enforcement functions. The MARA is currently set to be established on 17 July 2023. This will be a key step in the transition to the new maritime consenting regime and will be a key enabler in delivering Ireland’s ambitions for the Offshore Renewable Energy sector.

Maritime Spatial Planning and Designated Maritime Area Plans

The MAP Act expands on the existing regime for maritime spatial planning required under the European Union Maritime Spatial Planning Directive. The Government issued the first such spatial plan – the National Marine Planning Framework (the NMPF) – in the summer of 2021. The NMPF sets out various objectives and policies to guide activities and development in the offshore area. The MAP Act requires a review of the NMPF no later than six years following the publication of the first NMPF.

In addition, the MAP Act allows for the establishment of “Designated Maritime Area Plans” (DMAPs). DMAPs are specific parts of the maritime area that will be designated for particular “maritime usages”. On 10 March 2023, the Government published a policy decision entitled ‘Accelerating Ireland’s Offshore Energy Programme: Policy Statement on the Framework for Phase Two Offshore Wind’. This Phase 2 Policy Statement introduces a requirement that all future offshore wind farms must be built in DMAPs, which have yet to be identified. The approach to Phase 2 projects is discussed in more detail below.

Maritime Area Consent (MAC) regime

A MAC is a new “State consent” to allow for the occupation of a specified part of the maritime area. The previous equivalent was a “foreshore lease” and it is equivalent to a Crown Estate Lease in England. Such occupation may be on an exclusive or non-exclusive basis. Once established, MARA will be the authority responsible for determining MAC applications. Until then, the relevant Minister (the Minister for the Environment, Climate and Communications) has exercised MARA’s functions and powers in relation to the assessment of MACs. A MAC serves as the “gateway” into the development consent system. Developers are required to hold a MAC before they can apply to An Bord Pleanála for development permission.

The first seven MACs were issued by the Minister to the six Phase 1 offshore windfarm projects on 23 December 2022:-

• Oriel Wind Park
• Arklow Bank II
• Dublin Array (comprising Bray Bank and Kish Bank MACs)
• North Irish Sea Array
• Codling Wind Park (Codling I and Codling II)
• Skerd Rocks

This significant milestone for these six projects enabled all Phase One projects to begin their pre-planning application engagement with An Bord Pleanála which formally commenced in June 2023. The award of a MAC also enabled Phase One projects to participate in ORESS 1, the first auction for offshore wind under the Renewable Electricity Support Scheme (RESS) (see more details below).

Development Consent

The MAP Act requires specified categories of marine development, including, in particular, offshore renewable energy projects, to obtain planning permission under the existing planning legislation as amended by the MAP Act for that purpose.

An Bord Pleanála will be the decision-maker for offshore renewable energy project applications. The consenting regime is closely modelled on the existing consenting regime for onshore strategic infrastructure development, for which applications are also made directly to An Bord Pleanála.

Route to Market: ORESS 1 Auction Results

History was recently made with the running of the first Offshore Auction under the Government’s Renewable Electricity Support Scheme (ORESS 1). On 11 May 2023, EirGrid announced the following four projects as being provisionally successful under ORESS 1:

The final results were issued on 14 June 2023 and there was no change to the provisional results above. Therefore, around 3.1GW of capacity has been awarded. As such, additional offshore projects will be needed to meet the 5GW target of installed capacity by 2030. This transition from Phase 1 to the longer-term enduring offshore regime is referred as Phase 2.

Policy Statement on the Framework for Phase Two Offshore Wind

On 10 March 2023, the Government published its Policy Statement on the Framework for Phase Two Offshore Wind (the Phase 2 Policy Statement) which commits Ireland to meet its target of delivering 5GW of offshore wind capacity by 2030. The Phase 2 Policy Statement also notes that:

• The development of Phase 2 projects will be dictated in large part by the availability of onshore grid connections. EirGrid analysis highlights the current availability of onshore grid capacity for further connection of offshore renewables of approximately 700MW in total off the south coast of Ireland.
• This additional offshore wind capacity is intended to be split into two connections of 350MW each at two onshore locations along the south coast (this approach is stated to be subject to further clarification).
• So, the first auction to take place under Phase 2 – ORESS 2 – will consist of 700MW off the south coast. However, recent statements from the Department of Environment, Climate and Communications suggest that the 700MW capacity available for Phase 2 Projects is likely to be increased to 900MW.
• The location of offshore wind and offshore transmission system infrastructure for Phase 2 projects will be identified through forward spatial planning through the DMAP process. This is an important change from the developer-led approach adopted for the Phase 1 projects and will apply to ORESS 2 and all subsequent ORESS auctions. For the avoidance of doubt, all Phase 2 auctions will exclusively seek to procure offshore wind capacity located within offshore renewable DMAPs.

The Climate Action Plan 2023

On 21 December 2022, the Irish Government published its Climate Action Plan 2023 (CAP 2023), which is the second annual update to Ireland’s Climate Action Plan 2019. CAP 2023 is the first plan to be prepared since the enactment of the Climate Action and Low Carbon Development (Amendment) Act 2021 which places a legally binding objective on the State to pursue and achieve the transition to a climate-resilient, biodiversity-rich, environmentally sustainable and climate neutral economy by 2050.

CAP 2023 targets at least 5GW of offshore wind by 2030, and an additional 2GW of offshore wind for green hydrogen production.

What is to come?

The Phase 2 Policy Statement commits to a new Phase 3 which targets 2GW of floating offshore wind capacity to be in development by 2030. The longer-term ‘Enduring Regime’ for ORE will, according to the Phase 2 Policy Statement, involve greater State involvement in the sustainable development of the ORE sector, through:

• further designation of maritime areas within which offshore projects will be developed;
• the timing of future development; and
• determining the optimum offshore renewable energy technology mix.

More information will be contained in the Offshore Renewable Energy Development Plan II (OREDP II) which is currently being developed by the Government, with public consultation having recently closed.

Offshore wind continues to represent an opportunity to not only be instrumental in Ireland achieving its 2030 target, but also to continue to send positive investment signals to the Irish market.

For more information please contact Kristen Read, senior associate on A & L Goodbody’s Environmental & Planning team or John Dallas, partner on A & L Goodbody’s Energy, Infrastructure & Natural Resources team.

Authors

The post Guest Blog: Recent Developments in Irish Offshore Wind appeared first on ElectroRoute.

Recent Gas Market Volatility

The volatility of the market was demonstrated by the spike in natural gas prices in June, rising by more than 50% after a period of decline. This price surge serves as a troubling reminder of last year’s energy crisis and highlights the vulnerabilities in the region’s energy market. The spike in NBP Futures prices for Winter 2023 and 2024 is shown in the graph below.

At TTF, the main European gas trading exchange, front-month futures prices surged by 78% at the beginning of June, peaking at 41 €/MWh. Analysts attribute this reversal to longer-than-expected maintenance outages at crucial gas plants in Norway.

While European natural gas prices are still lower compared to last summer’s levels, the rapid increase in prices this month underscores the region’s vulnerability to supply disruptions following a decline in imports from Russia.

Gassco, Norway’s gas network operator, announced on its website that a planned shutdown at one of its gas processing plants has been extended until July 15, originally scheduled to come back online on June 21. Additionally, two other gas plants will remain offline indefinitely due to process problems. Norway replaced Russia as the largest source of natural gas imports in the European Union last year, supplying over 24% of the market.

Furthermore, reports of the Netherlands planning to permanently shut down its Groningen gas field in October, earlier than previously considered, have further fuelled the price spike. This field, once a major gas supplier for Europe, has been gradually reducing production over the past decade due to earthquake risks. Although the field now accounts for only a fraction of Europe’s gas supply, the possibility of its closure in October has unsettled traders, resulting in gas futures reaching an intra-day high of nearly 50 €/MWh.

Similar price increases were noted in Asian markets, even with record levels of storage in Japan and Korea. This is important for European markets given the new role that LNG plays in the system. Spiking prices in Asian markets can mean that floating LNG ships divert to Asia, leading to lower injections in the European market and a potential for prices to rise further.

The gas price spike in June underscores the continuing precarious nature of Europe’s energy market. It serves as a stark reminder that while efforts have been made to diversify gas sources and reduce dependence on specific regions, vulnerabilities still exist, and supply disruptions and geopolitical incidents can have a profound impact on gas prices.

Lingering Irish System Security of Supply Issues

There are still concerns around the security of supply in Ireland, highlighted by the Amber Alert that was issued midday on 12^th June. The event occurred due to low wind generation, a large increase in power demand relative to previous weeks and a couple of large plant outages. At the day-ahead stage on 11^th June, a minimum of around 1GW of net margin was forecasted, but the drop in system-wide wind generation and an additional unplanned outage caused additional shortness within the system resulting in the alert. Although it was lifted by 18:34 on the same day, the IDA3 price during the evening peak was twice as high as the DA price, at approximately 300 €/MWh, and the imbalance price reached almost 500 €/MWh, shown in the chart below.

New planned interconnectors to GB (Greenlink, expected Q4 2024) and France (Celtic, expected Q4 2026) and increased storage and fast response generation (including 700MW of planned TEG) will in time hopefully help to ease security of supply concerns in Ireland, but in the short-term, the outlook still looks uncertain.

European Geopolitics Driving Further Uncertainty

Recent events such as the decline in French nuclear availability, higher than normal European capacity storage, and the ongoing situation in Ukraine have highlighted the impact that geopolitical risks have on large demand users’ energy costs. These risks have created a complex and volatile environment, where energy prices are susceptible to sudden fluctuations and uncertainties.

Due to a milder-than-expected winter, storage levels reached record highs by the end of Europe’s heating season. This surplus of stored gas has led to a smaller-than-average volume required for refill this year. Consequently, futures prices have moved into contango, reflecting the need to cover storage costs. The combination of ample storage capacity and lower refill demand has contributed to the overall dynamics of the European gas market, adding another layer of complexity to energy pricing and market behaviour.

In 2022, France transitioned from being a net exporter of electricity to a net importer of electricity and so far in 2023, the country’s nuclear power output is 17.5% below the 2020/21 average. This decline can be attributed to various factors. First, most of France’s nuclear power plants were constructed around the same time, in response to the energy crisis that occurred in 1973. As a result, during the winter of 2022-2023, twenty-six out of fifty-six power plants underwent mandatory maintenance or repairs simultaneously. Since these plants were largely built to a single standard, any issues discovered in one plant necessitate repairs in others. Widespread industrial action in France, the result of government policy changes, including raising the retirement age by two years, has been causing delays to this mandatory maintenance on the EDF’s nuclear fleet.

A political decision made in 2012 by François Hollande to earn votes from the Green Party resulted in the shutdown of two reactors in Fessenheim and a commitment to reduce the proportion of nuclear energy generated by 50% by 2025. However, France is unlikely to follow through on this commitment, with the proportion of energy generated from nuclear currently at 70%.

The Ukraine war inevitably continues to dominate the geopolitical outlook in Europe, highlighted further this month by the announcement from Kyiv that Russian gas flows through the country was likely to be shut off at the end of 2024 when the current deal with Gazprom expires – understandably, the chances for renewing the five-year transit contract are slim.

How To Navigate Uncertain Times?

While we haven’t quite seen the level of market price fluctuation that Summer 2022 brought, this recent market price shock combined with the general geopolitical and energy system situation demonstrates that we are by no means out of the woods. Add in a lack of hedging options in Ireland with the suspension of Round 20 of Directed Contracts, high capital constraints on exchanges, persistently high inflation levels, and rising interest rates and it becomes very difficult for business to plan for this winter or beyond with any sort of certainty.

Consequently, ElectroRoute has developed a suite of energy risk-managed products to help businesses and large energy users navigate through these volatile times.

For further information please contact David McInerney (david.mcinerney@electroroute.com)

The post Navigating Uncertainty: Understanding and Managing Risks in Today’s Energy Markets appeared first on ElectroRoute.

The first reason heat will sink us is simply that it involves a greater amount of energy than electricity; Ireland’s electricity demand is around 30 TWh, while heat demand is 45 TWh.

Second, progress, or lack of it, is our next challenge. Ireland’s electricity sector can now boast delivery of one of the finest engineering achievements on the planet. In the space of 20 years, we have gone from a nearly fully carbon-reliant electricity system to one that supplies around 40% of annual output from variable renewable sources, mainly through onshore wind. The only country in Europe to exceed this is Denmark, the country which invented the wind turbine! In contrast, Ireland performs worse than all other EU countries when it comes to our heat sector. Our paltry 5% renewable heat share is left in the dust by best-in-class performers like Sweden and Denmark. Worse still, our failing effort is also shown up by some of the less obvious suspects like Estonia and Latvia, both of whom provide for over 50% of their heat demand using renewable sources, some ten times Ireland’s share.

Essential Drivers of Change

Given the slow start and low base, we started from, it seems extraordinary that Ireland is now at 40% renewable electricity. That’s even more notable considering we have not yet begun to tap the enormous potential of offshore wind off Irish coasts. But when we look closer, all the key elements are there for success. We have an ecosystem of people, companies, knowledge, and capacity to drive innovation, change, and rapidly evolving solutions to continue decarbonising the sector. In contrast, the Irish heating sector is still in startup mode, with the notable exception of building fabric retrofits and heat pumps in new builds. What we currently lack are those key drivers that will help us establish and ramp up the sort of ambitious projects needed to make headway in decarbonising the Irish heat sector.

We do have cause to hope though, because what we need to do has been done before. That’s right! Unlike how the Irish electricity sector had to break new ground by developing a world-leading power system operating with 40% variable power on it, our heat sector just has to do what others have been doing for decades. Countries like Sweden, Denmark, Estonia and Latvia have all achieved renewable heat shares of over 50%. Before outlining what they have done, we first need to understand the problem and for me, the easiest way to do this is by chopping up the heat sector into different parts.

Understanding the Challenge of Decarbonising Heat

To understand how the heat sector works and the extent of the decarbonisation challenge, it is important to understand that, unlike electricity, not all kWh’s of heat are equal. This helps to simplify discussions on decarbonising electricity, the focus just needs to be on how to produce clean electricity. That’s not the case for heat as a kWh used to produce hot water in your house is not the same as the kWh of heat used to make cement. For heat, it’s not just about how it’s produced, but who will use it and for what purpose. As that’s the case, when considering how to decarbonise the sector, it’s important to know what sort of demand we’re looking at.

First off, the full extent of heat demand in Ireland is approximately 45 TWh; about two-thirds of which is used for buildings and one-third for industry.

Second, the location of buildings is important when it comes to understanding the decarbonisation potential of the heating system. The urban-rural divide plays a role here as how we heat our buildings depends more on building density than building type. In simple terms, buildings in Irish cities are more likely to be connected to a gas grid (i.e., a network solution) while those located in the countryside tend to use stand-alone systems, predominantly oil-fired boilers (i.e. an individual solution). This matters when it comes to identifying the most appropriate types of low-carbon heating solutions needed to decarbonise the Irish building stock. For the purpose of assessing the viability of heat networks, about half of building heat demand is in urban areas where buildings are in close enough proximity to merit building a network solution.

Third, in contrast to the situation with our building stock, the most important factor for industry is not geographical location or density but temperature. Buildings usually require a maximum of 70-80°C for heating purposes, but industrial processes can require hundreds and even thousands of degrees Celsius.  The key threshold for me when it comes to industrial heat requirements is 200°C as there are totally different options available to produce heat above and below this number. So, our final category to identify before we start talking solutions is the amount of heat above and below this threshold, which conveniently is split at around 50%.

Summary of Irish Heat Demand:

The biggest challenge of the heat sector in my view is understanding the problem as it is only then you can start to define what you need to solve it.  For heat this is a complex matrix of whos and hows which are heavily linked to the solutions which are available to decarbonise each one, so let’s close with a brief summary of those.

Laundry List of Decarbonised Solutions

Here are what I believe are the solutions to decarbonise each of the segments of Ireland’s heat sector:

The wonderful part about this list is that except for hydrogen, all the solutions have been proven over a matter of decades elsewhere. Possibly the best established of these just happens to be the industry I work in day to day (funny that!), i.e., district heating, which I strongly believe has to be at the core of Ireland’s strategy to decarbonise heat.

Here Comes the Pitch!

The elevator pitch for district heating is that it involves a network of hot water in pipes ranging in diameter from ~40-800 mm that move heat from supplier to consumer. This is done in the same way that electricity, gas, or cold-water pipes move other utilities. Low-carbon district heating is achieved by using waste heat or a renewable heat producer.

Believe it or not, more heat is being wasted in Ireland today than is needed to heat all our urban areas combined[1]. In other words, if we had district heating networks in place in our cities, we could funnel heat that is currently being thrown away towards consumers, which would allow us to replace gas/oil for heating our buildings. In Copenhagen, where I lived for six years, district heating satisfied over 99% of the city’s heat demand, the central spine of which was over 100 km long. The SEAI concluded in its 2022 National Heat Study[2] that heat demand in 54% of Ireland’s buildings could be met using district heating. Shamefully, today less than 1% of heat demand is met this way, which the optimist in me chooses to see as a huge opportunity for carbon reduction, security of supply, and affordability.

While everyone in Ireland was feeling the pain of huge jumps in gas and oil prices in 2022, 90% of customers on district heating networks in Denmark saw no increase in their district heating prices[3]. Why? Because the price of the heat we throw away or of renewable energy doesn’t change in the way commodities like oil and gas do in relation to global markets. If we can supply the heat in our buildings with the heat, we currently waste, we are unlikely to experience the same shocks to consumer bills that come from depending on imported fossil fuels.

Here in 2023, I’m looking at Ireland’s heat sector hoping against hope that we meet our climate targets all the while knowing enough to understand it’s very unlikely, we’ll make it if we don’t accelerate the implementation of proven solutions very soon. For me, district heating is one of the critical solutions needed to unlock the decarbonisation of Irish heat and I’m determined to help deliver it in the months and years ahead.

Guest Blog is written by David Connolly PhD,

Chairperson Irish District Energy Association

Please visit https://districtenergy.ie/ to find out more.

[1]https://renewableenergyireland.ie/wp-content/uploads/2021/05/Renewable-Energy-Ireland_Renewable-Heat-Plan_-Final.pdf

[2]https://www.seai.ie/data-and-insights/national-heat-study/

[3]https://installator.dk/fjernvarmepriserne-er-ikke-p%C3%A5-himmelflugt

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When built, ElectroRoute estimates these windfarms will abate circa 5m tonnes of carbon dioxide, representing 8% of Ireland’s 2021 carbon emissions[2], and will provide enough clean, green energy to power over 2.5 million homes each year[3].

History of Offshore in Ireland 

In the early 2000s, Ireland’s first offshore wind farm emerged on the Arklow coast, featuring seven pioneering turbines. These structures demonstrated a potentially monumental industry that could be delivered on the nation’s coastal waters.  With its expansive coastline and abundant wind resources, Ireland’s geographical advantage relative to other jurisdictions, positions it as a prime contender for harnessing the immense potential of offshore wind power. Unfortunately, despite this early promise, Ireland has undergone a period of stagnation while neighbouring countries such as the United Kingdom and Northern European nations embarked on ambitious offshore wind programs, creating numerous jobs and economic value. 

Significant Policy Development 

Fortunately, Ireland is now awakening to the immense promise that lies in offshore wind energy, with government plans and policies now providing clarity to the sector. The Climate Action Plan [4] underpins the government’s commitment, setting out ambitious renewable energy targets, with offshore wind intended to play a pivotal role in Ireland’s decarbonisation aspirations. The plan aims to achieve 5GW of offshore wind by 2030 and an impressive 37GW of offshore wind capacity by 2050, aligning with the North Seas Energy Cooperation’s goal to move Europe towards energy independence[5].

Whilst it is clear that significant challenges remain in realising the potential for the offshore wind sector, recent years have seen significant progress including the introduction of marine planning legislation to establish a streamlined consenting process for offshore wind projects. In addition, the Minister for Enterprise, Trade, and Employment, Simon Coveney TD, recently unveiled plans to develop a National Industrial Strategy for Offshore Wind. This strategic blueprint will provide Ireland with a roadmap to seize the economic opportunities that arise from the production of offshore wind energy[6].

Offshore Renewable Electricity Support Scheme 

Today’s ORESS announcement marks a significant turning point in Ireland’s renewable energy landscape. In total, four projects were awarded long-term contracts as shown in the table below.  

The ORESS contracts guarantee each project a stable revenue stream based on the Strike Price it submitted into the ORESS Auction.   By providing financial certainty and stability, ORESS incentivises equity and debt investment in the construction and operation of these large-scale projects. 

Furthermore, these awards offer remarkable value for the energy consumer. With a weighted average strike price of €86.05/MWh, the power generated by these wind farms will not only be clean but also affordable and importantly will provide much-needed energy security as we transition away from fossil fuels.  

Conclusion

Ireland’s offshore wind potential is no longer a dormant promise but a living, breathing reality. While challenges still remain to meet the delivery date of 2030, the time has come for Ireland to fully embrace renewable energy as the cornerstone to securing energy independence and cutting carbon emissions. 

If you would like to speak to ElectroRoute about our services, please email us at info@electroroute.com 

[1] EirGrid announcement ORESS-1-Provisional-Auction-Results-2023-(OR1PAR).pdf (eirgridgroup.com)

[2] Calculated based on the intensity of Ireland’s power sector emissions in 2021 of 389 grams of carbon dioxide per kilowatt-hour of electricity generated. https://www.statista.com/statistics/1290237/carbon-intensity-power-sector-ireland/

[3] Based on statistics published by the Commission of Regulated Utilities (CRU) showing the average Irish household consumes 4,200KWh of electricity per annum.

[4] gov.ie – Climate Action Plan 2023 (www.gov.ie)

[5] Joint Statement on the North Seas Energy Cooperation – 12 Sept 2022 – 220912_NSEC_Joint_Statement_Dublin_Ministerial.pdf (europa.eu)

[6] https://enterprise.gov.ie/en/news-and-events/department-news/2023/may/202305092.html

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