7. ENERGY EFFICIENCY AND RESIDENTIAL HEATING

form of contracts, procurement guides and templates. The objective was to develop investment-ready projects to stimulate the market for energy services companies (ESCOs). An ESCO would enter into an EPC with a business unit and the stream of income from the cost savings would pay the ESCO for its services, instead of an upfront payment. All forms of EPCs are promoted through capital grants programmes.

However, the ESCO market did not take off as expected. Successful projects had a long preparatory period, of up to three years in some cases before the ESCOs were paid. Moreover, the level of technical competence along the chain of entities involved was not uniform and showed a large scope for capacity building. The government still sees potential in the EPC mechanism and is exploring opportunities for use of the EPC to achieve sector energy efficiency upgrades as a testing ground to refine the EPC and ESCO model.

Key opportunities to improve energy efficiency in the industrial and larger commercial sectors exist through the mandatory energy audits in compliance with the EU Energy Efficiency Directive. All concerned enterprises had to complete the first audit by December 2015 and have to renew it every four years. The government is considering extending the mandatory energy audits for the commercial sector beyond the obliged enterprises.

The government has launched the Excellence in Energy Efficient Design (EXEED) programme since the last in-depth review (IDR). This supports energy management certification, primarily for commercial energy users. It aims to provide new best practices by applying a standardised process in energy-efficient design management. The 38 EXEED projects funded under a pilot grant programme achieved energy savings averaging around 28% of the baseline energy consumption. The achievements have resulted in growing interest, in particular from SMEs. Funding of EUR 10 million was allocated for the EXEED in 2018 to respond to the increased interest.

Ireland is in the top 20 locations for data centres globally. There is therefore potential for electricity consumption of data centres to rise sharply. The electricity consumption of data centres in 2016 represented less than 2% of the overall yearly electricity consumption of Ireland. However, it may rise to 31% by 2027 (see Box 2.2 in Chapter 2 on “General energy policy” and Chapter 5 “Electricity and renewable electricity”). Some measures, such as the EXEED programme, already target this potential rise and aim to ensure a high energy efficiency of existing data centres, as well of those in their design stage.

Focus area: Decarbonisation of heat

Ireland’s buildings sector relies heavily on fossil fuels for heating. Residential space and water heating accounts for over 80% of the total energy consumption in the sector; most of that is supplied by fossil fuels. Ireland had the highest share of fossil fuels in residential space heating among IEA member countries in 2016 (Figure 7.9).

There are two ways to decarbonise heating in buildings: by reducing energy demand and by lowering carbon intensity per energy use. The first option relates to the energy efficiency in buildings and the development of the total buildings stock. The second option relates to switching from fossil fuels towards renewable energy sources in heat production.

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