€5 million in pre-construction support from the Climate Action Fund has been approved for nine public and private district heating schemes across seven counties, aiming to accelerate a pipeline of projects ahead of larger capital investment.

Minister for Climate, Energy and the Environment Darragh O'Brien announced the funding at the Irish District Energy Association Annual Conference, confirming that the pilot scheme is being delivered by the Sustainable Energy Authority of Ireland (SEAI) in partnership with his Department. The selected schemes have been allocated pre-construction backing to progress design, planning and readiness for future build-out.

District heating captures heat generated centrally and distributes it as hot water via insulated pipes to homes and businesses. According to the Department, it can decarbonise both new and existing buildings at scale, with the potential to cost-effectively deliver up to 4.6 TWh of heat in Ireland compared with other renewable heating options.

Speaking at the conference, Minister O'Brien said: "I am delighted to announce this funding for the district heating pilot scheme, which is another step towards our energy and climate goals. District heating can make an important contribution to Ireland's energy security, climate ambitions and decarbonisation targets, and is firmly reflected in our government policy. The Climate Action Plans and the Programme for Government, both recognise the strategic role that district heating will play in delivering a more sustainable, secure and affordable energy future."

The €5 million package is intended to bridge the gap on early-stage costs until substantial capital streams are in place, ensuring efficient projects are well positioned to access forthcoming funding. Officials said this underscores the Government's ongoing commitment to district heating as a core part of Ireland's decarbonisation pathway.

Minister O'Brien added: "To date, over €266 million of support has been provided from the Climate Action Funding for over 1,500 projects to assist local communities, public bodies and drive innovation in climate action.

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"Through this latest investment, we are supporting a broad portfolio of projects that will help build knowledge, experience and capability within the sector. Critically, this will ensure that Ireland is well positioned to identify the approaches that deliver the best outcomes for our communities, our economy and our climate objectives over the long term.

"I thank the SEAI District Heating Centre of Excellence for their support and assistance to make this allocation available as soon as possible. I prioritised these investments because it was clear that the sector was reaching a pivotal point and that strategic Government support could help unlock its considerable potential. I look forward to seeing the progress of this industry, and this initial fund represents the first step in that journey."

Following a competitive process, nine efficient projects have been identified for provisional support, subject to final verification and clarification. They span a range of locations, scales and delivery models: Blanchardstown (Fingal County Council); Castletroy (Heatgrid Ireland); Drogheda (Louth County Council); Dundalk (Louth County Council); Galway (Heatgrid Ireland); Leixlip (Yuno Energy Heat); Monaghan (Monaghan County Council); Naas (Kildare County Council); and Portlaoise (Heatgrid Ireland).

The Department, with SEAI assistance, will work closely with the successful applicants to advance them to the Letter of Offer stage. A key goal of the pilot is to gather data and insights to inform future policy, investment and the wider deployment of district heating networks nationwide.

William Walsh, CEO of SEAI, said: "District heating, using waste and renewable heat and piping it into homes and businesses to keep them warm, works really well in other countries and it's something we need to do a lot more of here in Ireland. This pilot fund has the potential to be a real gamechanger. By financing these projects at a crucial stage, we are creating the pipeline of projects necessary to build an industry. We're also building the knowledge, skills and supply chain needed to develop at scale.

"Decoupling how we generate heat from fossil fuels has always been a major challenge and district heating has the potential to play a really important role in finding more secure and sustainable ways to heat our homes and buildings. SEAI is proud to have supported the Department in establishing this fund. The projects could potentially heat a combined equivalent of over 25,000 homes, when constructed. Congratulations to these nine successful projects on what is a really significant milestone."

National policy has recognised district heating's role in meeting Ireland's energy and climate goals, underpinned by SEAI's National Heat Study 2022, which identified the significant potential of low-carbon district heating in the transition to net zero. The District Heating Steering Group's July 2023 report set future policy direction and concluded that public investment will be needed throughout the full project lifecycle.

Looking ahead, the Infrastructure, Climate and Nature Fund (ICNF), established as part of Budget 2025 to manage windfall tax receipts, includes a €500 million allocation for Department of Climate, Energy and the Environment projects under the revised National Development Plan for 2026–2030. Over the five-year period, investment in early-phase infrastructure for a National District Heating Market is intended to deliver backbone elements before the end of the decade, decarbonising heat for larger anchor customers initially and enabling follow-on expansion to smaller heat loads. Building this core network by 2030 is expected to cut heat emissions from connected buildings and support more citizens, businesses and public bodies to decarbonise through the 2030s and beyond.