New Legislation to Accelerate District Heating Rollout Across Ireland

The Government has approved revisions to legislation that will pave the way for district heating networks to expand across Ireland, with new consumer protections and a stronger regulatory framework for the sector.

Minister for Climate, Energy and the Environment Darragh O'Brien has secured Cabinet approval for updates to the General Scheme of the Heat (Networks and Miscellaneous Provisions) Bill 2024. The legislation is intended to support the decarbonisation of Ireland's heating sector and help 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. There are approximately 70 million district heating customers across the EU.

Research by Codema, Dublin's Energy Agency, has found 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 one 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 the Sustainable Energy Authority of Ireland (SEAI), found that district heating has the potential to supply a significant share of Ireland's future heating demand.

Ireland's first such scheme, the Tallaght District Heating Scheme, uses 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.

Welcoming the Cabinet 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."

The 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.

Two district heating projects have received Government support to date. The Tallaght District Heating Project, which is now operational, was developed by South Dublin County Council and received a total of €4.92 million from the Climate Action Fund. Dublin City Council is leading the development of the Dublin District Heating Project, which will use waste heat generated by the Dublin Waste to Energy plant in Poolbeg and has been allocated €50 million from the same fund.

A further €5 million from the Climate Action Fund was approved in July 2025 to support pre-construction of new district heating projects; following a competitive selection process, this is expected to support five to seven projects. As part of the Department's Sectoral Capital Plan for 2026 to 2030 under the National Development Plan, €50-100 million in Infrastructure, Climate and Nature Fund support has been allocated for district heating infrastructure. This scheme is at the design stage and will be administered through the District Heating Centre of Excellence in the SEAI, with grant support expected to be available from the start of 2027 until the end of 2030, up to a maximum of 50% of eligible costs.

Separately, 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 this is not technically or economically feasible after conducting a cost-best analysis. This will be binding in Irish law once the Energy Efficiency Directive is fully transposed.