The Department of Environment, Climate and Communications has launched a consultation on the potential introduction of a Renewable Heat Obligation.
As Agriland reported earlier this month, such an obligation could require energy suppliers in the heat sector to ensure that a certain percentage of the energy supplied is renewable.
Ireland currently has 6.3% of its heat sector demand met by renewable energy like biomass and biogas, which is the lowest percentage of any country in Europe and well below the EU average of 22%.
While “some progress” is being made in terms of increasing renewable heat in Ireland, “more will need to be done”, according to the department.
Ireland did not meet its 2020 target of 16% for renewable energy and “performed poorly” in terms of renewable energy use in the heat sector.
Obligation in the heat sector
An obligation in the heat sector will “incentivise the use of renewable heat while spreading the obligation across all non-renewable fuel types”, according to the department.
The suppliers of fuels (including oil, LPG, natural gas, coal, and peat) will be subject to the obligation.
It is not proposed that district heating systems using waste heat/renewable heat would be subject to the obligation.
According to the department’s consultation document, it is expected that the level of obligation (the Heat Obligation Rate) would be “introduced as a low level and increased over the years ahead”.
“The initial Heat Obligation Rate could be set at 0.5%. Based on 2019 data, this would equate to circa 260GWh of renewable energy.
“The Heat Obligation Rate would then be increased over the decade to at least 3%. This would equate to at least 1.6TWh of renewable heat by 2030.”
Suppliers could be able to meet their obligation by “supplying renewable energy or trading with other suppliers of renewable energy in the heat sector”.
“For example, a supplier of oil might buy ‘credits’ generated by a supplier of renewable gas.
“This may provide a more cost-efficient way of meeting a supplier’s obligation.”
Renewable energy criteria
Only renewable energy that meets the sustainability criteria under the revised Renewable Energy Directive will be permitted to be used to meet the obligation, the department explained.
“This could include biogas/biomethane, bioliquid, biomass and green hydrogen [i.e. hydrogen produced from renewable electricity].
“While imported sustainable fuels will be accepted by the scheme [as long as they meet sustainability criteria], it is expected that indigenously produced renewable energy will have less challenges meeting the sustainability criteria due to lower emissions associated with transportation.”
In order to “specifically incentivise the uptake and use” of green hydroden, it is intended that where it is used to meet the obligation, a “multiplier would be applied” – for example, “each unit of renewable energy supplied via green hydrogen would count as double that of a similar unit of other renewable energy”.
First obligation period from 2023
To ensure there is “sufficient time to develop the supply of renewable energy and associated infrastructure”, it is proposed that the first obligation period will be over three years, 2023-2025.
“Compliance will be measured over the full three-year period as a whole,” the department said.
“No penalties will be issued for non-compliance during 2023 or 2024 but compliance must be achieved for the three-year period at the end of 2025.
“Following this initial period, compliance will be measured on an annual basis.”
The consultation is open until October 1.