Let’s Talk About Heat: Affordable, Secure and Cleaner Heat in Ireland

In December last year the Sustainable Energy Authority of Ireland (SEAI) released their Annual Report which reports on progress and energy usage for 2020.  As usual, the report contains a good deal of useful information and insight.  Perhaps most importantly, there is an update on the targets set for 2020 and the performance against those targets.  The scorecard was a mixed bag of news.

Targets versus actuals for 2020 for Ireland’s energy decarbonization ambitions. Source: SEAI

Good news was meeting the 10% use of renewable energy in transport and just being off on renewable electricity.  Bad news was being off on the Overall RES target – and this was down to the very bad news of only getting to the half-way mark on Renewable Heat target.  This bad miss underscores that Heat is perhaps a more difficult sector to address, or at least it has not received the attention it deserves.

Fossil fuel heat consumption by sector in 2020. Source: SEAI, Causeway Energies

Because of the current dominance of fossil fuels in providing heat in Ireland, most of which are imported, Heat is also an exemplar of our energy trilemma – the need to consider affordability and security as well as the environment.  These issues have been rudely brought to the public’s attention only just recently with soaring prices of both oil and natural gas as these global commodities range through a new super-cycle of demand growth overlapping with tightening of supply.

Dissecting the problem

While we have blogged about this topic before, both from an overall energy systems point of view and specifically on how geothermal can play a big role in addressing the challenge, we thought it would be worth using SEAI’s updated dataset to restate the problem.

The chart above assumes that the fossil fuels used by the various sectors provides all the heating to buildings and processes.  This assumption is a little flawed as there is some electricity and a little non-fossil energy used for heating (and cooling), but the error is small (4%).  Nevertheless, the analysis makes it clear where the problem lies with the ranked order of share from Residential, through Industry, Commercial and Public Services (for example large offices, hospitals), to Agriculture & Fisheries.

Approximate split of heat demand across the key heat sectors and suggested clean(er) heat solutions. Source: SEAI, Causeway Energies

This next chart dissects the problem and starts to highlight some opportunities to solve it.  There is currently poor data available on specific temperature of heat demand in industry in Ireland, although the SEAI are progressing a heat study at present to help addresss this.  So we’ve assumed that for each industrial sector the temperature spectrum of heat demand is similar to other countries for which we have data on the split.  That leads to the important insight that three quarters of Ireland’s heat is relatively low temperature, or less than 80 ºC.

The Solutions Roster: Certainties, Probables and Possibles

We’ve pointed out before how our thermal energy systems, whether generating electricity, or heating homes or industry, are really inefficient.

As much as two thirds of the final energy consumed is wasted as losses.

While that sinks in, let us illustrate the opportunity that presents.  As is often said, the cheapest energy is the energy that you don’t buy to waste.  So, improving heat efficiency is our first choice on our team of heat solutions.

Take a home with a Building Efficiency Rating (BER) of F/G.  A 2019 study reported that about 15% of Irish homes have this rating, they cost €3,600 and 10.2 tonnes per year of emissions to heat.  Say, as per the 2021 Climate Action Plan, we spend €40,000 upgrading such a home to B rating, then over the next twenty years we save €53,200 with the upfront costs being paid back in 15 years and a return of 3% on the capital.  In addition, 152 tonnes of CO2 emissions are avoided.  That’s a good investment for both energy frugality and climate action.

Heat Pumps

Next up on our roster of solutions are heat pumps.  We’ve explained before how we love this technology and see them as a certainty to help with all of the sectors in some way.  The Climate Action Plan calls for the installation of 400,000 heat pumps in existing homes and 250,000-280,000 in new homes by 2030.  Heat pumps are high efficiency and low carbon ways of heating homes.  Economic sensitivities we have run to compare a ground source heat pump (GSHP) to a gas boiler and an oil boiler indicate that despite the higher up front capital costs, the GSHP is cheaper than oil in Levelised Cost of Heat (LCOH) terms.  Only a 14% reduction in Irish electricity prices (2021) in  makes the GSHP competitive with a gas boiler.  Alternatively, delivering a very achievable Seasonal Performance Factor of 3.5 for the heat pump also allows the GSHP to beat the gas boiler.  Meanwhile, the GSHP only emits about 10% of the GHG emissions of its fossil-fuel predecessors.

Also, in the Climate Action Plan there’s a target for 50,000-55,000 commercial buildings to be installed with zero-emission heating and the public services sector is not to be left out with a target to reduce buildings emissions by 50%.  There’s a range of heat pump technologies, drawing heat from the air, ground (aka shallow geothermal), rivers, canals and lakes, and even sewers.  Also, in the mix is heat that would otherwise be wasted, from higher temperature industries and from data centres.  This surplus heat can either be usefully recycled or “cascaded” to nearby consumers.  Because electricity is used to drive the heat pumps which have an efficiency of 300% or more, the emissions avoidance can be as much as 90% of the fossil-fuel equivalent.  With a reasonable balance of electricity to natural gas costs, heat pumps outperform their fossil fuel boiler predecessors on costs too.

We like geothermal heat pumps particularly because the efficiency is higher than the other common type, air source, however they have higher installation costs.  Shallow geothermal (or ground source) heat pumps are the centerpiece of our “80º Solution” which we are taking to market in 2022.  We are also working on a higher temperature version, an “earth source” heat pump, extracting heat from deeper in the earth.

Moving into higher temperature heat, above 100ºC, is a probable application for industrial heat pumps recycling fossil heat that would otherwise be wasted as well as our deeper “earth sourced” heat.

Harder to abate

As we move across the temperature spectrum in industry, we consider possible options such as biofuels, biogas, biomass and hydrogen.  We take the view that trying to use Ireland’s gas network, which only connects just less than one third of homes with gas, is a waste of a resource that would be better applied to the hardest to abate industrial sectors.

There are also efficiency and engineering reasons why blending hydrogen into the gas network is not a good idea.  Aiming green hydrogen squarely at the replacement of the grey type in ammonia production (part of the fertilizer production chain) appears to be the right place for using any surplus green electrons that aren’t being used in the other electrification options discussed earlier.

Conclusion and next steps

The failure to deliver on the 2020 Renewable Heat target is a big disappointment for Ireland.  The good news is that there is a whole lot of immediate opportunity to reverse this miss, and Causeway Energies is going to play our part.  For geothermal more generally, there is a great and timely opportunity to accelerate deployment by putting in place a best-in-class policy.  The Irish government released a draft policy for geothermal in the circular economy late last year and a consultation process has been launched.  In one of our next blogs we’ll offer some thoughts on what needs to be put in place to accelerate the geothermal decade in Ireland.