Joint Committee on Environment and Climate Action debate -
Tuesday, 11 Oct 2022

Retrofitting Schemes: Sustainable Energy Authority of Ireland

Chairman

Apologies have been received from Deputy Alan Farrell and Senator Higgins. The purpose of today's meeting is to discuss the various retrofitting schemes available, as well as district heating, which has been raised here in the last number of weeks. On behalf of the committee, I welcome the following representatives from the Sustainable Energy Authority of Ireland, SEAI: Ms Margie McCarthy, director of research and policy insights; and Dr. Ciarán Byrne, director of national retrofit. Both witnesses are welcome back. We have met them before. Ms Kerrie Sheehan, head of research and technology, is new to this committee. She is very welcome. Joining us online are Mr. Brian O'Mahony, head of national retrofit and community department; and Mr. John Randles, head of delivery. They are also very welcome.

Before we begin, I will read a note on privilege. I remind our guests of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable, or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity.

If their statements are potentially defamatory in regard to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative they comply with any such direction. For witnesses attending remotely from outside the Leinster House campus, there are limitations to parliamentary privilege and as such they may not benefit from the same level of immunity from legal proceedings as witnesses physically present on the campus do.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses, or an official, either by name or in such a way as to make him or her identifiable. I remind members they may participate in this meeting only if they are physically located on the Leinster House campus. In this regard, I ask any member joining us online, prior to making his or her contribution, to confirm that he or she is on the grounds of the Leinster House campus.

I ask Ms McCarthy to make her opening statement.

Ms Margie McCarthy

I thank the Chair and members of the committee for the invitation to discuss a review of retrofitting schemes and district heating systems. I am joined, as the Chair said, by my colleagues Dr. Byrne, Ms Sheehan, Mr. O'Mahony and Mr. Randles. I thank the committee for affording me the opportunity to present our opening statement.

At the SEAI our purpose is to drive action in Ireland’s clean energy revolution. We are funded by the Government through the Department of the Environment, Climate, and Communications and the Department of Transport. We are catalysts for action through our data-driven actionable insights, our end user-focused grant and incentive programmes and through our capacity-building processes with and for citizens, communities, and the business and public sectors. In 2022 our budget allocation is more than €440 million. Of this, €267.2 million is allocated specifically to energy retrofits in homes and communities.

To set the context for the forthcoming discussion on retrofit and district heating, I note some figures from the national energy balance 2021 that was recently published by SEAI. While our national energy budgets set a reduction target of 4.8% CO2 emissions per annum up to 2025, our energy emissions increased by 5.4% in 2021 and our renewable energy share for heat remains at under 7%. Heat is responsible for a quarter of our emissions and its demand is 94% derived from fossil fuels. The national heat study provides evidence that the pathway to decarbonisation for the heat sector with the least cumulative emissions deploys electric technologies. This is critical to meeting our national targets. Essential to our pathway is the deployment of district heating and heat pumps at scale and the backbone is the achievement of our renewable energy targets for electricity. The EU and national legislation is clear that our net zero pathway is dependent on using less, namely, efficiency such as retrofit and using clean energy, meaning a shift to low carbon technologies such as district heating solutions. Unprecedented effort is required on both of these to succeed.

The national heat study found up to 50% of our heat demand nationally could be met through district heating. This is a proven technology that offers the benefit of decarbonisation and energy resilience. In many cases, our mainland European neighbours that use district heating at scale have not experienced the price fluctuations currently in play. We cannot afford to continue to support fossil fuel heating in our homes and businesses and a clear alternative must be prioritised to support this transition. The Department of the Environment, Climate, and Communications has established a working group on district heating that is due to report by the year end and the SEAI is closely supporting this work. Ireland’s challenge is to deliver this at a faster pace than experienced elsewhere but our opportunity is we can learn from well-established practices in district heating to do this well.

In February, the Minister, Deputy Eamon Ryan, announced the opening of the registration process for the new national home energy upgrade scheme, which offers substantially-increased grants for a typical B2 home energy upgrade, including enhanced grants for the installation of heat pumps. The scheme offers a hassle-free home energy upgrade with One Stop Shops providing an end-to-end service. To date, 12 suppliers have been registered and are active on the scheme and ten additional suppliers are at various stages in the registration process. All registered suppliers have reported strong pipelines of work and increased conversion rates of inquiries to commitments. Grant levels were also increased and harmonised across other SEAI retrofit schemes.

More than 36,000 applications have been received by the SEAI across our schemes and all are experiencing significant levels of demand from homeowners. This equates to approximately 28,800 homes being retrofitted. Typically, homeowners have a period of eight months to complete works once approval and there are constraints on delivery at the present time.

The warmer homes scheme is our main energy poverty scheme. It operates under different conditions and constraints from our other schemes. More than 3,200 homes have been delivered through the scheme to date in 2022.

As referenced when we met the committee in April, we are in unprecedented times and the national residential retrofit plan is experiencing many of the same challenges facing the wider economy, namely, inflation and supply chain constraints in terms of labour and materials. While anecdotal information suggests that the material supply-chain constraints experienced immediately post Covid-19 have eased in recent months, many suppliers report difficulties in securing appropriate labour supply. Also, the significant levels of inflation reported for some building products related to retrofit is a cause for concern. The SEAI is acutely aware of the potential to further inflate specific markets by simply increasing grant levels. Therefore, we have focused on attracting more contractors to participate in our schemes.

The SEAI is delivering significant climate action. Ireland’s carbon-free future is dependent on efficiency actions and our pathway to the elimination of fossil fuels. This task is not easy. Critical to its success is Government support for the solutions required. In the heat sector the key solutions have been identified and they marry approaches taken in other nations. It means building on the current significant investments and commitments from Government. We urgently need further actions and investments to support the widespread implementation of district heating, the necessary supports required to eliminate fossil fuels in our buildings and publication of a national heat policy approach. The SEAI recognises the challenges ahead but is ready to play its part in supporting this national ambition.

Finally, our thanks to our colleagues in the Department of the Environment, Climate and Communications for their continued support and close collaboration. I welcome discussion with the committee, and my colleagues and I are happy to answer any questions.

Chairman

I thank Ms McCarthy for her opening statement. Do members agree to allowing exactly seven minutes for a back and forth interaction with our guests? Agreed. I will ask a few short questions before going through the list of people who wish to ask questions.

The opening statement contains a strong message about labour supply. It is true that across the entire economy we have reached full employment. What does the SEAI propose will increase labour supply? Do we need to encourage people from overseas to work here in order to meet demand? Does Ms McCarthy have a sense of the solution?

Ms Margie McCarthy

Dr. Byrne will comment on the retrofit side.

Dr. Ciaran Byrne

I thank the Chair for his question. Labour supply is a common theme that has come from our contractors.

By way of context, our better energy homes scheme provides individual grants and we have more than 1,300 registered contractors. Due to the publication of retrofit schemes, and the clear policy direction and funding put in place by the Government an increasing number of contractors have come back to the scheme. Thus far to date this year an additional 328 contractors have joined the scheme relative to last year where we had 127. Also, in our one-stop shops, we have 12 registered and another ten in the pipeline. Other larger construction-type entities are looking into one-stop shops.

One of the areas that we will look to work on is apprenticeships. The Department of Further and Higher Education, Research, Innovation and Science has put in additional funding for apprenticeships and we will consider ways to customise apprenticeships slightly more. For example, to qualify as a plumber one must undertake a four-year apprenticeship where one studies the full spectrum of plumbing works. There is a lot of traction around the idea of having an apprenticeship specifically for a renewable installer. To be a heat-pump installer one needs some of the plumbing things but not all of them. We need to consider whether we can compact the apprenticeship into that space a bit more and we are starting to look into that and seeing that as an option.

In regard to going abroad, we have had discussions with our colleagues in the Construction Industry Federation who have experienced the same thing and CIF has deep experience of going to other countries.

They also have deep experience of going to other countries. Traditionally, we would have gone to eastern Europe but that is no longer available to us. A lot of people left during Covid and did not come back, and a lot of the countries that we would have gone to are doing similar programmes. We are talking about going further afield, if not quite into the Middle East, then further into eastern Europe, for example, Uzbekistan, Turkey and other places outside the EU. Some of the interesting constraints are, first, visas to get people here and, second, accommodation when they do come here. We are engaging with the Construction Industry Federation, CIF, because it has practical experience.

Deputy Darren O'Rourke

I have a number of questions and I will try to get through them as quickly as I can. On the warmer homes scheme, the target is 4,800 and Dr. Byrne said 3,200 homes had been done up to the end of September. How many of those are to B2 or B2 equivalent? I will ask Mr. Randles, our head of delivery, to address that question.

Mr. John Randles

The number of B2s in the year to date is 231.

Deputy Darren O'Rourke

That is 231 out of 3,200. Why is the number so low in that group?

Mr. John Randles

First, the intervention is not a B2 programme but rather a programme targeting energy poverty. The first thing is to go in and assess the house for what needs to be completed, and it may just be attic or cavity wall insulation that fits the bill. The new programme will definitely focus on the worst performing homes. It was launched in mid-February and has changed the programme and given priority to Es, Fs and Gs which were more than likely to come up during construction to B2.

Deputy Darren O'Rourke

Does Mr. Randles expect to hit the 4,800 figure at the end of December?

Mr. John Randles

We are ambitious that we will be in excess of 4,000.

Deputy Darren O'Rourke

In regard to the overall target, the Minister said at the end of August that the overall target is 27,800 for this year. Is that correct?

Dr. Ciaran Byrne

It is 26,900, just shy of 27,000.

Deputy Darren O'Rourke

At the end of August, there were 13,400. How many have been done up to the end of September?

Dr. Ciaran Byrne

At present, we have just over 16,000 homes delivered. We did a full re-profile of our targets and budgets in July, a kind of mid-year profile. On the basis of the information we had in July, we expect that we would get probably in the region of 25,000 homes done. What we have seen since July is very strong demand across the programmes in regard to homes. Our programmes are typically back in delivery in the sense that we will see a lot of programmes coming through in the last quarter of the year.

Deputy Darren O'Rourke

How many of those are B2 or B2 equivalent? Some 4,200 is the figure the Minister gave at the end of August.

Dr. Ciaran Byrne

The B2 target is 8,640. Going by the July profile, we expect to have in the region of 7,500 B2s done. It varies slightly because we have an assumption model built into this in terms of which homes deliver B2, so we are seeing very strong demand in our solar programme, which delivers some B2s as well.

Deputy Darren O'Rourke

How are the one-stop shops performing or delivering at this stage? I know there is high demand but are they delivering retrofits?

Dr. Ciaran Byrne

Yes, they are.

Deputy Darren O'Rourke

On what scale?

Dr. Ciaran Byrne

We have 12 registered and another ten in the pipeline. Of the 12 registered, we have delivered 1,270 home energy assessments and that has led to 637 works orders, which is increasing on a daily basis. I will check this with my colleague but I think we have approximately 84 of those works orders completed and paid. Mr. O'Mahony might confirm the number of works orders paid.

Mr. Brian O'Mahony

There are 89 works applications that are completed at this stage where they have done the retrofit to B2 or better. When the scheme started in March, we had to register the one-stop shops. The homeowner journey is that they first do a home energy assessment and once they have completed that, the pathway to upgrading their home to at least B2 or better is laid out, and they can then make the decision about the works applications. A way of looking at it is that there is a lag. A criticism directed at me continually is that the numbers are not delivered yet but it is actually about getting up to speed and now, as Dr. Byrne mentioned, what has happened is that nearly 1,300 home energy assessments are completed.

Homeowners have made applications and more than 600 homes are in the process of completion, with 100 of them finished. We expect that to continue into next year and beyond.

Deputy Darren O'Rourke

The level of inflation is a concern. What rate of inflation is currently being reported in this sector? Do the witnesses consider it to be a deterrent? I know people for whom it is a deterrent. They engaged but the cost of the work was beyond their expectation and their means. What level of inflation is being reported on these works?

Dr. Ciaran Byrne

I will answer the question in two parts. The first relates to the level of inflation in the wider construction sector. The Society of Chartered Surveyors Ireland estimates there was approximately 7% to 8% inflation for the first half of the year. The rate of inflation is indicated to be slowing down somewhat but we have not yet factored in energy costs in that regard. Labour cost inflation is running at 5% to 10% but overall inflation in the past year and a half has been heading for approximately 22%. Within the construction sector, the cost of certain products and materials has shot up way more than everything else but, on average, it is approximately 7% to 8% for the first half of the year. That is the inflationary piece. The other piece the Deputy asked about is the cost people are experiencing for retrofits. We have experience of that and are working closely with our one-stop shop, OSS, colleagues. Some of the learnings we have in that regard relate to the depth of retrofit that people are seeking. I will draw an analogy with buying a car. A person seeking to buy a premium brand car will expect to pay X but if the person is going for a mid-range saloon, he or she will expect to pay less than X. What we are seeing there is a piece of education in respect of BER ratings and retrofit. A B2 home is a perfectly energy-efficient home. It is very good. It is exactly where we want people to be and what we want them to achieve. One can also get to an A1 home, which costs a considerable amount more. We are getting that feedback from our OSS colleagues. People are asking for quotes for an A1 home and are then a little surprised when they see the quotes.

Deputy Darren O'Rourke

I thank Dr. Byrne. On the most recent occasion the witnesses appeared before the committee, they were conducting a study on whether heat pumps can be installed in homes with lower BERs. Has that study concluded or is it near conclusion?

Dr. Ciaran Byrne

The study has been started. I will ask my colleague, Ms McCarthy, to provide background on it.

Ms Margie McCarthy

As the Deputy is aware, the heat loss indicator, HLI, is the marker we use to define whether a person is grant eligible. That is in place to protect homeowners against high electricity bills when running a heat pump in a non-insulated or leaky home. The HLI study is to consider whether, with heat pump technology vastly improved and looking at varying home insulation, we could increase the HLI to allow a broader range of homes to go into it. The study has commenced but it has not read out yet. We have designed it to have readouts with milestones. As such, even though the completion of the study may be two years down the road, we will have readouts in one year's time so that we can start to help to inform decisions on the matter.

Deputy Richard Bruton

I thank the witnesses for their presentation. We are now in an emergency situation, both in terms of the SEAI recording that our carbon emissions went up in 2021 - which is not surprising as we were coming out of Covid but, nonetheless, we want to see steady progress - and we have a price emergency. In that context, should we be leaning all the schemes offered by the SEAI much more towards shallow work? It strikes me that, at best, we will get to 30,000 homes under all its initiatives, whereas there are 2 million homes in the country and many of them are in very low BER categories. Is this a time for focusing on shallow measures such as heat controls and cavity wall insulation? I presume the SEAI has a fairly detailed picture of where in the country cavity walls exist - on which estates and in which generation of houses - and how many of them have had work done. Could we make more of an impact quickly by using these more shallow methods? Could we get a very early win, so to speak, by looking at all the housing stock and targeting the worst of it with the cheapest opportunities, be that attic insulation, cavity wall insulation, heat controls or smart meters where they have gone in?

Dr. Ciaran Byrne

I will answer initially and then pass to my colleagues. It is a good point.

It is useful to tell the committee that we introduced grants of up to 80% for attics and cavities. We have seen an increase of 280% year on year in terms of the number of people applying for those grants.

By way of background, over the past ten years we would have put in place somewhere in the region of 260,000 attic grants and 220,000 grants for cavities. A significant amount, but not all, of the work has been done. We have been asked about the shallow measures under the warmer homes scheme and whether we can do things more quickly due to the emerging situation. Given the dynamics of the warmer homes scheme, approximately 30% of the applications are now suitable for shallow measures in terms of the surveys that have been done. I will ask Mr. O'Mahony to comment on the wider piece on what is out there regarding homes. Mr. Randles might comment on the warmer homes scheme and shallow measures.

Mr. Brian O'Mahony

In terms of the housing stock in Ireland, there are approximately 1.5 million homes in the country. Almost 1 million homes have ratings under the building energy regulation, BER, scheme. We are able to draw conclusions as to the building stock across the wider country. About 162,000 homes that are suitable have not had their cavity walls filled, that is, the shallow measure mentioned.

Deputy Richard Bruton

How many?

Mr. Brian O'Mahony

About 162,000. About 500,000 homes would be suitable for solid wall insulation. That would be regarded as a deeper intervention.

In terms of roofs, about half of the homes in Ireland would benefit from further attic insulation. The general rule of thumb would be that homes constructed from the early part of this century onwards are all modern and energy-efficient and homes constructed before that generally might need some improvement if that has not already been carried out. In our schemes we have individual measures schemes, such as the better energy homes and solar PV schemes. We have seen significant growth in the application rate for those scheme since March.

Deputy Richard Bruton

Those numbers are quite striking. There is low-level opportunity. If we know an area comprises homes built before 1960, we know where they are. Why not use contractors to target every home in poorer energy estates to install cavity wall and attic insulation? It would be very cheap to do and there could be a demonstration effect in older estates by doing a lot of work at one time. The ambition for the midlands scheme was to go in and gather up everything. I am worried that with a one-stop shop we are taking the best aggregators and putting them into the highest and most expensive realm of activity. Should we not put aggregators into cheaper and quicker early win stuff?

Mr. Brian O'Mahony

We have the consumer-facing individual energy grant scheme, namely, the better energy homes scheme. The homeowner can choose what he or she wants to do. He or she can choose to do one measure or many. At the other end of the spectrum is the one-stop shop we mentioned, under which we want homes to reach B2 or better. People have to carry out many measures to get to that uplift. We also have community schemes. We took the approach mentioned by the Deputy in the midlands scheme. We tried to work with local authorities to upgrade homes in an area-based or aggregated approach. The programme concludes this year. We have not completed the scheme, but at this stage we can say there were challenges during Covid in terms of completing the homes. There are also issues around getting into estates to generate interest with homeowners. The community energy grant scheme or the better energy community scheme-----

Deputy Richard Bruton

I am running out of time. The issue for me is scale. We can do shallow retrofits at scale if we reorganise a little to drive them. Most of the aggregators the SEAI is putting together will do very expensive long-term projects. I worry a bit about the balance in the midst of the crisis we are in.

Mr. Brian O'Mahony

The area-based approach is being delivered in the community energy grant scheme. We deliver that in partnership with project co-ordinators who are usually connected to sustainable energy communities and local authorities.

We have seen that recently in Cork, where two housing estates have been upgraded, with local authority homeowners who were energy poor and private homeowners all upgraded. In recent years, local authorities have been pushing all of those homeowners to go to B2 and the utilities are coming in to help bridge the gap for the homeowners to reach that B2 uplift. That is actually happening. What I am trying to explain is that we are doing everything. We cannot just do one and concentrate wholly on an area-based approach. We believe that is very important and that is why we are trialling different approaches, but we believe we need to be doing everything across the board, not only to deliver on our climate targets but also to help homeowners through this and future winters.

Deputy Jennifer Whitmore

I absolutely agree with Deputy Bruton and the approach he has taken. In a time of emergency, where resources are limited and there are constraints around the availability of construction workers to do this work, the focus must be on those homes where people are at risk of, or are already in, energy poverty and where the upgrades can be done quickly and efficiently. That is one of the reasons the Social Democrats spoke repeatedly throughout the budget about solar energy. Solar panels will see a reduction of 40% in energy usage, as will retrofitting, but it seems the focus is very much on the latter, which is much more expensive and takes an awful lot longer because it cannot be done as quickly.

On the warmer homes scheme, 3,200 homes have been delivered this year. How many are on the waiting list and how many have actually qualified? Some homes have already qualified for those grants but how many are on the list to be qualified and how long is the waiting list?

Dr. Ciaran Byrne

I will ask my colleague, Mr. John Randles, to answer those specific questions.

Mr. John Randles

Currently we have 11,254 applications. That figure was correct as of last night. Around 4,300 homes are a work in progress.

Deputy Jennifer Whitmore

How long is the waiting list? At one stage it was-----

Mr. John Randles

It is 28 months from application to closure of works. It is ten months to wait for a survey at the moment, which has gone down-----

Deputy Jennifer Whitmore

These are very much the homes where we are looking at attic insulation and so on. They are not the major retrofits. These should be the easiest and quickest homes to do.

Mr. John Randles

The programme is broken into two categories. A change to the programme was announced in the middle of February this year whereby the prioritisation was for E, F or G rated homes first. However, prior to that, we were heavily impacted by Covid so we have been clearing out the pre-Covid waiting list. We are now moving on to applications and conducting surveys of applications that were made this year, from February onwards. Overall, less than 30% of the homes are suitable for shallow measures such as cavity and wall insulation. The poorer performing the home, the deeper the retrofit that is required. It is the case that E, F or G rated homes tend to be in fairly bad condition and require a fair bit of intervention, possibly even a heating system.

Deputy Jennifer Whitmore

These are the homes of people who are in receipt of social welfare and, therefore, of people who are at the greatest risk. I just wanted to make that clear. It also feeds into the point about prioritising.

Mr. John Randles

Yes, social welfare would be a factor but there are other criteria such as receipt of the fuel allowance and so on, but yes, these are the people who are entitled to avail of the warmer homes programme.

Deputy Jennifer Whitmore

On another issue, a low-cost loan scheme was announced in February. When will that be made available? My understanding is the scheme would be worth €8 billion. According to the statistics provided in the opening statement, 36,000 applications have been made to the one-stop shop. How many of those are actually in progress and how many are waiting for information on a loan? I would imagine the availability of a loan would be a determining factor for many people who want to get their homes retrofitted.

Dr. Ciaran Byrne

Just to clarify, the 36,000 is across all schemes. There is no waiting list on the other schemes per se. We have a waiting list for the warmer homes scheme and the better energy homes scheme is an individual measures scheme. We expect the low-cost loan to be in place in the first quarter of 2023. We are working with our colleagues in the Department, the Strategic Banking Corporation of Ireland, SBCI, and the European Investment Bank, EIB, on the modelling and are providing the background statistics and analysis to allow the risk people to finalise the details around the loans.

We have been working very closely with the Department and we expect and understand it will be available to consumers by the first quarter of the year. The first tender or expression of interest has been done and there will be a second short-listing from which they will select the institutions that will be able to participate in the scheme.

Deputy Jennifer Whitmore

If I was doing a retrofit and I knew there were going to be low-cost loans coming out, I would not progress with it until I knew how much that loan was and whether I was going to be eligible for it. How can people progress through the one-stop shop in the absence of that loan?

Dr. Ciaran Byrne

The first thing is that not everyone will require a low-cost loan. That is number one. Number two-----

Deputy Jennifer Whitmore

What percentage of people are waiting for information on the loan?

Dr. Ciaran Byrne

We would not have that information available because we do not know who is waiting and who is not. We have done some behavioural analysis on this and we know that the low-cost loan will assist a lot of people to progress on their retrofit journey but we do not know who exactly is waiting at this point in time.

Deputy Jennifer Whitmore

Does Dr. Byrne have no oversight of who is coming in to the one-stop shops, how long they are on waiting lists, what they are looking for, or any of that information?

Dr. Ciaran Byrne

We have all of that information down to the nth degree. I can tell the Deputy everything about everything in terms of BERs, locations and measures - who is getting what by county and by time - with regard to the people on the one-stop shop scheme. Any delays on this scheme are to do with pipeline and capacity with the one-stop shops. They are building their pipelines. As I said before, it is bit like doing a home extension. It takes a period of time and they programme in so they are working through their pipelines.

Deputy Jennifer Whitmore

On the one-stop shops, how many people have applied and how many homes have started? How many have people working on them?

Dr. Ciaran Byrne

Some 637 works orders have been started under the one-stop shop scheme.

Deputy Jennifer Whitmore

And how many have applied?

Dr. Ciaran Byrne

Some 1,270 home energy assessments have been done. I wish to make it clear that a home energy assessment is a comprehensive review of the energy performance at home and it sets out the measures a person might undertake. You can get a home energy assessment and decide to go ahead or you can decide to stop or think about things so those are the figures.

Deputy Jennifer Whitmore

I note the figure of 637.

I have a comment to make on the district heating scheme. Dr. Byrne spoke about the importance of data centres and how they could play a large part in the scheme. Data centres will account for 30% of our electricity use by 2030 so they are a major part of the jigsaw. I found it really interesting in his district heating report that Dr. Byrne did not know when trying to model it where they were, how much energy they were using or what size they were. There were no locations available for him. As the entity is data driven, as he says, the lack of transparency with data centres and all these issues around them would really undermine his ability to plan and look at reducing energy in that sector. I want to make that comment because it is a major gap.

Chairman

Okay. We should give the witnesses a chance to respond to that as well.

Ms Margie McCarthy

It is very difficult to get information from the existing data centres. What is very important in capturing waste or surplus heat from data centres is that it is built into the design before a centre is constructed. We know there is potential in Ireland at the moment to add in with data centres. We have seen the success in Tallaght where this was built into the design right from the outset.

In terms of where we are at the moment, Ms Sheehan and I along with a number of others in the organisation are working very closely with the display energy certificate, DEC, on the working group. Out of the heat study, essentially we have produced candidate areas of heat demand which are largely urban or town population areas. The next step now is looking at where the key sources of heat are and where the anchor tenants are. They are usually public buildings or large services within those zones. That is the next stage. What is really important in measuring feasibility with those is a national commitment to district heating. I could not have said it more strongly than in the opening statement. We really need a commitment to district heating and then a movement through it like electrification, or like the pace with which we built out the gas network. That is how we will have to do it with district heating if we really want it to play a part.

Deputy Jennifer Whitmore

You are going to need to know where that energy use is.

Ms Margie McCarthy

That will come out in the feasibility study.

Chairman

I am going to move on to Deputy Devlin who is joining us from his office.

Deputy Cormac Devlin

I thank all the witnesses for attending the meeting and for their opening statements. I will stick with the last item, the district heating system. The witnesses mentioned that the Department has started a working group. I am not sure when that began, but they are hoping to report by the end of the year. It seems quite late to me to have begun such a process. Can the witnesses give a bit more information on the scope of that working group? I know they said the SEAI is working closely with them.

I am familiar with the report commissioned by Dublin City Council in August 2020 that looked to Poolbeg. Is Poolbeg constructed to facilitate and contribute to a district heating system in that area at this juncture? Will it also have to be retrofitted to supply the region with a district heating system?

Ms Margie McCarthy

The national heat study published in February identified that district heating could meet up to 50% of our national heat demand. Until that point there was an assumption that the cost-effectiveness of district heating was in areas of higher heat density such as very heavily populated cities with a large number of consumers in a small area. The heat study found the effective cost would allow us to use district heating in much smaller urban areas and towns throughout the country. The climate action plan had identified a target of 2.7 TWh per year. The impetus of the heat study was mentioned a number of times in the climate action plan as a key part of informing the next steps. On the basis of what the heat study is telling us, the working group formed by the Department is looking at the various implications of rolling out district heating at pace throughout the country. These implications are regulatory and financial and there is also the planning, research and innovation that will inform district heating zones. These all feed into the group that is charged with identifying an action plan for district heating that stretches ambition in terms of the terawatt-hour over the year for district heating between now and 2030. The SEAI is feeding into this with significant mapping information. We are also about to launch feasibility studies in certain candidate areas.

Deputy Cormac Devlin

I thank Ms McCarthy. Is the SEAI aware of whether Poolbeg, as it is constructed, can contribute to such a system?

Ms Margie McCarthy

We know the Covanta waste-to-energy site is ready to support being a heat source for a district heating network. South Dublin County Council has plans. It is in discussions with anchor tenants on design. This is with regard to becoming a signal for investment in district heating. We have spoken about the potential of district heating to be able to provide cost-effective decarbonised heat for the larger Georgian areas of Dublin that are extremely difficult to retrofit.

Deputy Cormac Devlin

They can be joined at a time in the near future, it is hoped.

Ms Margie McCarthy

To do it at the pace we are speaking about would require investment and a commitment to district heating as opposed to other networks.

Deputy Cormac Devlin

I appreciate that and I thank Ms McCarthy. The committee might follow up on the district heating system and the working group. I am sure we will discuss it again. I want to turn to the issue of deep retrofits. On the previous occasion the SEAI was before the committee, the target was 500,000 homes with 75,000 homes per annum. If I heard correctly, 25,000 homes have been done so far this year. Is this correct?

Dr. Ciaran Byrne

To clarify, the target in the climate action plan is to bring 500,000 homes to a B2 rating. This year our target is to bring 8,640 homes to a B2 rating. We will have done 25,000 homes but not all will achieve the B2 rating. The target is just shy of 27,000. We reckon we will get very close to it when we look at the projections, but not all of them will achieve a B2 rating.

Deputy Cormac Devlin

With regard to the one-stop shops, when we initially spoke, three suppliers had been earmarked, which was putting enormous pressure on the system. There are now 12 and ten are about to join. Even so, 22 is not sufficient to cover the country. What other methods are being deployed to try to encourage people to come into the one-stop shops? As I have asked previously, what are the biggest obstacles to getting suppliers into the one-stop shops?

Dr. Ciaran Byrne

We have had many more than ten inquiries about the one-stop shops. We have reached back to those who have inquired. We have a team in place that is developing relationships with prospective one-stop shops and reaching out to the wider sector.

I ask my colleague, Mr. O'Mahony, to talk about that in terms of the schemes.

Mr. Brian O'Mahony

There are 12 one-stop shops registered and we are in discussions with ten of them. Some of them have national reach and others have regional reach. There are some in Cork that mainly focus on the Cork-Kerry-Waterford-Tipperary region. There are other one-stop shops in Cork that do everywhere in the country.

We are also engaged with the CIF and the construction sector to try to bring in new entrants, such as the existing construction companies working in the commercial and residential space. We have the community energy programme where we have project co-ordinators who deliver a lot of upgrades in community projects and we are trying to bring in those key actors who are not in the one-stop shop or pure retrofit space.

Deputy Cormac Devlin

The 80% grant was met with much fanfare and significant interest was expressed in it. What impact is inflation having on the 80% grant, specifically in respect of attic and cavity wall insulation?

Dr. Ciaran Byrne

We reckon the overall rate of inflation in construction was 7% to 8% for the first half of the year. I ask my colleague, Mr. John Randles, to comment on the question of inflation in the context of those grants.

Mr. John Randles

Applications are up 262% for attic insulation and 284% for cavity wall insulation in 2022. There is huge demand for them. We are doing analysis on an ongoing basis and there has been much inflation in the cost of materials and labour this year. In the context of these measures, we have observed inflation of between 30% and 39% in those areas in terms of cost increases.

Deputy Cormac Devlin

Mr. Randles or one of the other witnesses may be able to answer this-----

Chairman

The Deputy is out of time, but I will bring him in later. I have to stick to the rules.

Deputy Bríd Smith

I thank our guests for coming in and for their presentation. I want to refer back to district heating because we discovered last week as part of the energy and cost-of-living crises that the existing district heating schemes are not regulated by the CRU. Did the SEAI know that?

Ms Margie McCarthy

I refer to the definition of "district heating" and "communal heating" to begin with. The regulatory position, which is part of what the working group is working on now, is the long-term situation and how regulation will play out as part of that discussion.

Deputy Bríd Smith

So Ms McCarthy was aware that district heating schemes are not regulated by CRU. The cost to the individual homeowner is about three times the cost she or I would pay, plus they cannot go to bonkers.ie and move to another supplier because they are tied in. Was she aware of all of that?

Ms Margie McCarthy

To differentiate between a district heating network and communal heating, communal heating is where a heat source and the supply to the consumer is within the boundary of one property whereas district heating is an energy hub that feeds into a range of estates and properties. That is where the district heating piece is coming into play. We are aware of commercial rates being applied within certain communal heating schemes and we are involved in a feasibility study around protecting one such scheme, about which I ask my colleague, Ms Sheehan, to address.

Deputy Bríd Smith

Because we are all stuck for time, I want to make the point that the definition of one versus the other should be clarified because thousands of people, particularly those living in apartments, are being subjected to punitive rates of energy costs and they do not have the option to go to bonkers.ie and move supplier, which is serious. If the SEAI can make any progress in developing that, it would be very useful.

The other aspect I am intrigued by is the target number of retrofitted homes. I am aware other members have asked about this. To achieve the target of 500,000 homes retrofitted by 2030, it would mean 60,000 to 70,000 homes would have to be retrofitted per year, and we are falling short of that. In addition, we are coming up against the problem of contractors and labour not being available. I will describe the situation as I see it as someone who represents a constituency of mixed types of incomes within it. The one-stop shop is great if a person has a hefty income to be able to pay upfront for deep retrofitting and can apply for all the grants.

To avail of it, however, a person has to be well-off financially and able to pay the money upfront.

The warmer homes scheme is great if one is on fuel allowance and gets one's house done for free by the State or through the SEAI. I found out recently that the waiting time for those on the list was two years but the witnesses have told us it is more than that; it is 28 months. In the budget, the Government extended fuel allowance to thousands more people, including the over-70s. They are going to be applying to the warmer homes scheme and that will push up the waiting time. Those people are over 70 already and it will be two or three years before they get a sniff at the scheme. Problems are being piled on top of problems.

Another problem I see coming down the tracks is that of individual energy upgrades. A contractor has written to us to say that it can currently apply directly to the SEAI for a grant to carry out attic insulation, wall cavity insulation, external wall insulation, internal wall insulation, ventilation or the installation of mechanical fans if the applicant signs a form consenting to the contractor making the application. From 1 January, that will change. Contractors will no longer be able to apply for the grant; the individual seeking to have the work done will have to do so. That leaves a cohort of people in the middle who account for the vast majority of homes. Median earners - those who are not very wealthy or very poor but work for an average industrial wage - will need to have €4,000 or €5,000 upfront before being entitled to anything at all. This is ridiculously punitive and unhelpful. Obviously, we are in a cost-of-living crisis and those people do not have those sums of money. Their energy costs are spiralling out of control, yet from 1 January the SEAI will make it more difficult for them to do something about that. I am dealing with people in that situation. For example, there is a lone parent with two children who lives in a corner house on Ballyfermot Parade and earns €35,000 a year. The one-stop shop is no good to her as she does not have the money to go to it. The warmer homes scheme is not available to her. She is stuck in the middle and she does not have €3,000, €4,000 or €5,000 to pay upfront to have work done to her home. She is typical of many people. What is the rationale for that decision? Is it that the SEAI does not really want people to access the scheme because it does not have enough people to work on it and does not have an apprenticeship scheme set up? An apprenticeship scheme should have been set up years ago.

Chairman

We might leave some time for the witnesses to respond. There is only a minute and a half left in the Deputy's slot.

Deputy Bríd Smith

Yes. I am baffled by the decision of the SEAI in that regard.

Dr. Ciaran Byrne

As regards the warmer homes scheme, we are fully alert to the waiting list and we are working with the Department to consider alternative pathways to delivery to expedite the wait. We are also fully alert to the changes made in the budget and the impact they may have.

The other issue raised by the Deputy relates to the energy efficiency obligation scheme and it is a change in policy in terms of moving towards deeper measures. It has been well flagged to the industry for the past year and a half to two years. The Deputy described the potential local impact of that. I will ask Mr. Randles to provide more detail in respect of the Deputy's query.

Mr. John Randles

What the Deputy referenced in terms of the contractors is that some of the energy suppliers under the energy efficiency obligation scheme, EEOS, contract contractors directly. The energy supplier applies on behalf of the homeowner to the better energy homes programme. That makes it less cumbersome for and potentially more attractive to the homeowner because the contractor or energy supplier is doing all the work. The homeowner just pays the net price, less the grant and any discount leveraged by the EEOS, directly to the contractor. The energy supplier applies for the grant and we submit the grant to the energy supplier which, in turn, pays the contractor. Unfortunately, a group of contractors that works for a particular energy supplier has decided it will no longer participate in this from 1 January. That is what the Deputy is referencing. Other energy suppliers will continue but she is referencing a particular contractor that works directly for an energy supplier and has decided to cease working on smaller measures. That is what happened there.

Deputy Bríd Smith

That is not what I am referencing. This contractor has been informed by the SEAI - I have this in writing here in front of me - that changes to the individual energy upgrade grants to come into effect on 1 January 2023 will mean that the homeowner is liable for the full cost of the works upfront.

That is what I am referencing.

Mr. John Randles

Homeowners are always liable upfront for the works done through any particular programme. How they do that depends on the avenue they choose. We know this affects a particular energy supplier because in the case of all of the other contractors most of the homeowners work directly with the SEAI and claim grants through it.

Deputy Bríd Smith

I can send Mr. Randles a copy of this letter. It clearly states that changes to the scheme are forcing this contractor to refuse to apply for the grant on behalf of homeowners.

Dr. Ciaran Byrne

We have the letter and have engaged with the contracting body. The parties are fully aware of the issue. We have a version of the Deputy's letter already.

Chairman

I am mindful of time.

Deputy Bríd Smith

I have to go. I thank the witnesses.

Chairman

I have some questions. I refer to the delay in low-cost loans. We expected them in quarter 3 this year. Is the delay due to the banks or the SEAI?

Dr. Ciaran Byrne

It is not with us. It is on the European end of things. We are working as hard as we can, and the EIB is doing its due diligence in the way it does. We support that. Representatives from the bank came over a number of weeks ago and we have done all of the demand analysis on all of the various calculations, projections and so on. We have given over what is needed.

Chairman

I thank Dr. Byrne. Deputy O'Sullivan is not able to be here. He asked me to ask a question on his behalf. He wants to know in the case of a hypothetical old stone cottage in, I presume, west Cork, which does not have cavity walls and has a small attic and oil boiler, the measures available to retrofit that type of house besides the limited attic insulation scheme. I ask the witnesses to be brief because I have more questions.

Mr. Brian O'Mahony

I will ask Mr. O'Mahony to address that.

Mr. Brian O'Mahony

In essence, somebody who had a cottage like that should get a home energy assessment done because that would give the person a pathway to get to B2, whether that involves single measures or taking things in one step. We are probably talking about a traditional or heritage build. There may be issues around the type of materials that can be used. They would not be the same as the materials that can be used in a building constructed from concrete or timber. I would advise to get a home energy assessment and understand the pathway to upgrading, and options will be presented to the homeowner.

Chairman

Okay. I thank Mr. O'Mahony. We do not talk about windows enough when we discuss energy upgrades. Windows are where most of the heat in any home escapes. The U-value for a window in a typical older construction is about 2 W per sq. m Kelvin. Even the very best windows perform much more poorly than the best worst performing walls. Is there SEAI support for stripping out old windows and installing windows with a much lower U-value?

Dr. Ciaran Byrne

We have significant grants under the one-stop shop scheme for windows. The window replacement is part of the overall fabric package to get a homeowner to a B2 level. I do not want to teach the Chair how to suck eggs, but most of the heat is lost through the roof of a house, followed by the walls and then, to a much lesser extent, the windows and doors. We have included windows and doors as part of the overall package for B2 measures. There are significant grants available for window replacement.

Chairman

Per unit area more heat is lost through windows. I accept Dr. Byrne's point that there are more walls and roofs than windows, which conduct heat.

Dr. Ciaran Byrne

Windows might be less than 20 years old, even though the U-value might not be that good. It is typically walls that are performing worse and to do windows in isolation means homeowners end up with fantastic windows, but it is like putting a Porsche engine into a Mini. If the windows are replaced without insulating the wall, the necessary impact is not achieved.

Chairman

The only supports are the full retrofit. There are not more piecemeal measures for windows.

Dr. Ciaran Byrne

Exactly. They are not included in the individual measures.

Chairman

In the remaining time, I want to talk about district heating. I want to give Ms McCarthy and Ms Sheehan more time because they did not have much time earlier.

I am interested in the distinction between communal and district heating, on which they were clear. This is something we do not talk about. I will let Ms McCarthy and Ms Sheehan talk more about it. I am interested in the opportunities we have in that regard. Ms McCarthy might also refer to the heat study published this year.

Ms Margie McCarthy

Perhaps Ms Sheehan will talk about the feasibility work after me. The hypothetical stone cottage in west Cork is a good entry point. The heat study recommends and highlights the two key solutions to decarbonising our heat sector for homes in Ireland. The installation of heat pumps is likely to occur in detached, rural, oil-fuelled homes and district heating is more for homes in towns, villages and cities. The heat study looked at the costs. I spoke about heat density and we were at a much higher figure in that quite a big population demand was needed in a small area for it to be cost effective. What the heat study did was show us that we can actually cover much larger and less densely populated areas quite effectively with district heating. We can see this is being done really well across Scandinavian and Nordic countries.

To address some of the questions asked earlier, what is really important is that district heating is agnostic to the fuel type. We are not necessarily talking about being tied into any specific fuel. The advantage we have, and what we are seeing in Europe, is that district heating networks are not being affected by price fluctuations in the same way as we are being affected by being tied into various fossil fuel sources. That is a really important piece for us to learn from because we are starting out with district heating.

As Deputy Bríd Smith mentioned, we have some communal heating pieces. We do not have district heating at a large scale. We are just about to launch two new schemes in Tallaght and, I hope, Dublin city centre. These will show us how effective it can be to have decarbonised fuel sources in them.

What we have done in the heat study is use the information we had initially. We are now identifying how many candidate areas are available to us to get to the target of 2.7 TWh per year. That is our next step. If we think about it, that is a 2-D map. What we then need to do is look at the feasibility study, which involves considering whether there are rivers to cross and mountains to get over or whether there are real financial issues with a particular area. I will hand over to Ms Sheehan to speak about how we are supporting that feasibility work.

Ms Kerrie Sheehan

In tandem with the fundamentals of regulating planning and finance, this is also looking at how we will do this. We have to do it very fast and we have to get roll-out to get our targets and decarbonised heat, in which Ireland is a laggard at the moment.

From a practical point of view, the national heat study showed that just over 50% of heat could be achieved through district heating. Ireland currently has 1% through district heating. That was assuming all things were equal, however. Building on that and challenging each of the assumptions of that particular calculation, we have done further work to identify candidate areas around Ireland. It is basically a heat map, if one were to look at it. Again, there are assumptions with any of these things. This then informs us on where to delve further. If we think of the darker colour of where there is higher density of demand or load, then we need to get to those individual areas. That is where the feasibility comes into this.

We have a few prongs on this. One is what Deputy Bríd Smith spoke about, which is a particular site that is using gas for the communal heating system. We are looking at the feasibility of decarbonising that. At the same time, we are looking into parameters for a scheme, or enhancing a scheme, to fund feasibility studies into the future. Then, to inform that, we are conducting our own three-sample feasibility studies. What these are looking at when they go down is-----

Chairman

We are out of time and I want to be fair to other members. That is very helpful, however. We will probably have time to come back to this discussion. I call Senator Boylan.

Senator Lynn Boylan

I want to pick up on a couple of issues previous speakers asked about. Deputy O'Rourke spoke about the attic insulation figures, and Deputies Bruton and Whitmore spoke about the idea of shallow retrofitting.

Is it not true that attic insulation really fell off a cliff from 2011 to 2019? What was the rationale for that? Was it Government policy? Was it a change in the grants that were available? We have figures to the effect that 51,577 attics were insulated in 2011 whereas in 2019, it was 7,562. What explains that significant cliff edge? Was it Government policy? Was it a change in behavioural attitudes?

Dr. Ciaran Byrne

I am looking at the same figures because we gave the committee those figures. It is quite significant. There are two parts to this. At that time, the schemes opened when we were in a recessionary period. A home renovation incentive was also put in place. From looking at the figures, it has decreased over a period. There has been no significant change in Government policy that would impact attic insulation in that way. Grant levels had remained static for quite a number of years prior to their uplift earlier in the year. It is not, therefore, entirely clear to us.

I will ask my colleague, Mr. O'Mahony, to give some insight into why that may be. As the Senator said, however, there may be a behavioural element to this. People were focused elsewhere, particularly during the earlier part of it. Significant work was done during the recession but it tapered off at the tailback of the recession when the construction industry definitely shrank in size.

Senator Lynn Boylan

I will ask one question before Mr. O'Mahony comes in. The SEAI noticed that this was happening and there was this drop-off in interest. Was anything being done at an SEAI level to ask whether we need to encourage people to continue to do this? If we had continued on the trajectory we were on in 2011, a significant number of emissions would have been saved had people continued to get their attics insulated.

Mr. Brian O'Mahony

When we look back over the previous decade, as the Senator said, we would have seen a drop-off. A number of changes were made to the scheme whereby some of the grants were adjusted. As the Senator said, it was a very successful initial two-year period of what I believe at the time was called the home energy saving scheme.

What happened over time, as Dr. Byrne mentioned, is that people's perspectives and viewpoints changed coming out of the recession. There was, therefore, a behavioural aspect to this. In the last number of years, we have changed our focus to try to go to the Department of Public Expenditure and Reform. A discussion is happening today about shallow versus deep retrofitting. However, we are not only focused on this winter but on those in ten years' time or in 2050, by which time we want to have zero emissions in our residential sector.

There was a change approximately ten years ago. Since just before Covid-19 happened, however, we saw the numbers start to build again. There was a pause during Covid-19 but it has recovered rapidly this year. When we look into the supply chain, we see that the supply chain is responding and doing a really good job. There is a lag between when a homeowner is interested and when the supply chain can respond, but suppliers are doing that. We are now seeing capacity starting to be added.

Senator Lynn Boylan

The other issue I wish to raise concerns the changes to the energy efficiency obligation scheme. There is a move to these more complex, deep measures rather than looking at the more shallow measures. The hub controller is one measure that was brought to my attention. My understanding is that this is smart technology that actively integrates with the boiler. Two different analyses on the hub controller, one of which was carried by the SEAI, found a decrease of between 30% and 36% on household bills. Some 12,000 household have this hub controller fitted. It is quite cheap at a cost €300 or €400. The company was installing it for free in households and it was then getting that grant back. Is it true that this sort of measure will now no longer be eligible for the energy efficiency obligation scheme? Households will, therefore, be losing out. It seems to me that if we can reduce household bills by 36% for something so cheap, we should extend that measure for a little while when we are in a cost-of-living crisis.

Dr. Ciaran Byrne

I will answer at a high level and then bring in my colleague, Mr. O'Mahony. The Senator referenced the energy efficiency obligation scheme. We looked at that and at the underpinning policies around it, which are shifting towards deeper measures and bigger packages of measures. Again, the eye is not on the immediate future but on 2030 to 2050.

What has happened in a broader sense is that we are in a particular environment right now that is kind of mature. We look at policy and the length of time it takes with the energy efficiency obligation scheme and the consultation and that entire process. Events then catch up with us, as they say.

We are in the middle of an energy crisis. People would not have predicted at the start and the changes to the energy efficiency obligation scheme, EEOS, policy and obligations. We are in a switch towards deeper measures. I refer to Deputy Smith's comments. One of the contractors was doing shallower measures. A commercial decision made by one of the energy partners to move into deeper measures has led to that.

Senator Lynn Boylan

I understand we want to get the deep retrofit but we are where we are, to use that awful phrase. People are really struggling to pay their bills. If there is a system that can reduce people's bills by 36% and it costs €300 or €400, and if we want to shift the energy efficiency obligation scheme away from that, are there short-term measures where we can ensure these households get these types of short-term measures which could make a very significant difference to their bills?

Dr. Ciaran Byrne

That is a very good point. We have obviously dealt with the situation referenced by Deputy Smith and we are aware of the contractors. We are looking at that ourselves and are asking how we can package up our grants. We have a menu of grants. How can we incentivise those grants in slightly different ways to ensure the people doing those works can continue in as close a fashion as possible? Some of the energy partners are moving to those deeper measures. Those are commercial decisions they are making in looking at the long-term market. At the SEAI level, we are asking how we can change things from our side of it to make it more attractive to keep implementing these measures. We have had engagement in terms of looking at the likes of heating controls and at whether we can get another package of grants to help people to understand their energy usage better and things like that. It is almost a bit like Ryanair where you pull things together and you might give a different grant if you get a certain measure but aiming at the shallower measures.

I might ask Mr. O'Mahony to comment at this point.

Mr. Brian O'Mahony

I was not directly involved in that study on the hub. My understanding is focused not on the energy-poor sector but those heating controls are still eligible for support today. I refer to the better energy homes and the individual measures. Home owners can do just one measure if they wish. That is really important. We are still focusing on that. We are also pivoting our programmes to look to the future.

Regarding those shallow measures, there has been discussion today about cavity and attic insulation and heating controls. I will take the example of attic and cavity insulation. If you take a typical terrace or end of terrace home that needs an upgrade for attic and cavity, it would cost in the range of about €2,500 to €3000 to do both of those measures. The grant is about €2,000 to €2,500, depending on the house type. Often somebody needs to find up to €1,000 and that can be a challenge for some people at the moment. We recognise that. We do not have the loan scheme in place but if you go to the credit union and borrow €500 at 7% to do one measure, over one year it would cost about €43 per month to pay for that upgrade. However, the energy savings you would see this winter and next winter would be about half of that. You would get about €25 to €40 per month benefit. There are options available for people. We recognise that and we need to respond and help them. That is why when you look at the individual measure scheme or the better energy homes, you will see the supports are much higher for those shallow measures. We are still trying to support that sector. As my colleague, Mr. Randles, mentioned, we have seen almost a tripling of the activity in that sector. That sector has grown tremendously this year and we expect that next year, it will grow tremendously as well. However, we need to be realistic. The sector is not going to grow by ten times overnight. It will take a couple of months to get there but we are growing and we are on that pathway to grow for both the shallow measures and the deeper measures.

Deputy Réada Cronin

I wanted to ask a couple of questions around district heating because it sounds very promising. I am thinking about people in my own constituency who are worried about the little district in their own home and they cannot put the heat on in the kitchen and the sitting room at the same time or they have to deal with cold bedrooms. I know there is a pilot scheme in Tallaght running off a data centre. I would not like district heating to be some kind of a ruse to get more data centres. However, I would like to ask the witnesses how they are communicating with communities that might be looked upon favourably for district heating. What can we do to make sure they are not wasting their time and money applying for heat pumps, upgrading homes or whatever?

The last time the witnesses were before the committee, they said they were working on an energy security emergency group, ESEG, and working on vulnerable household schemes. I would like to hear about how that is progressing. The SEAI also hosts energy clinics where people can drop in if they have queries. I would like to get feedback about that as well, because the communication and messaging has not been great. Many people who are financially vulnerable as well might look upon these things and say they cannot afford it and there is no point in even applying for it. I would be interested in the outreach on that.

Ms Margie McCarthy

It might be remiss of us not to mention the Reduce Your Use campaign. The Deputy mentioned people struggling at the moment in their homes. Some homes have already adopted a number of the measures recommended through Reduce Your Use. We recognise that some are living with 19°C heat already and struggling with that. We take that on board. The Reduce Your Use campaign is very focused on behavioural changes that can be made that could allow savings of between 10 to 15% on energy costs. If some measures around heat controls or servicing a fossil fuel boiler are added in, these are all things that can add up to a 20% saving. Getting that message out has been a key part of what the SEAI is doing. The Deputy mentioned communications with communities. A lot of what we are doing is speaking to people on the ground through the sustainable energy communities, SECs. Even our phone calls are up significantly. I think Mr. Randles can give us a number if we want one, but they are up by significant multiples. Much of that advice is what can be done behaviourally before ever taking a penny out of your purse to try to make a retrofit change.

Deputy Réada Cronin

Where are the clinics held?

Ms Margie McCarthy

It is through all of our community work, even through the call centres that come through to us. The Reduce Your Use campaign is live, there is an advertising and marketing campaign for that, and we have all of those resources on our website. The advice is simple things like when to use wet appliances, as they are the highest energy users, and how to use them during peak times. Other advice is bringing the temperature down to 19°C if you can and your health allows it. Similarly, we are doing work across the public sector to try to help support that and businesses. That is on the communications and that piece. In terms of-----

Deputy Réada Cronin

Has the SEAI thought about conducting anything like that in libraries, where people who are vulnerable might be going to get heat during the day?

Ms Margie McCarthy

We have worked closely with libraries in the past and even have a home energy kit available where users can measure the efficiency of their homes and the insulation in their homes. It is certainly part of the overall campaign in terms of Reduce Your Use to get the message to as many people as possible, recognising that affordability is the next step. If a person wants to take another step and invest, the next step would be the attic and walls and going into deeper-----

Deputy Réada Cronin

How is the SEAI deciding what areas might be eligible for district heating and making sure people are not wasting their time and money by applying for heat pumps?

Ms Margie McCarthy

The Deputy mentioned data centres - I made a comment earlier about it being agnostic district heating. It is about finding the most cost-effective heat source in any particular zone. What we have done is identify zones where there is good heat density. The next step is to start to identify where the best heat sources are. That could be anything, for example, geothermal, biomass, heat pumps or industry waste heat like that from data centres. The Deputy mentioned, for example, that has been really effective in Tallaght. Already, we can see they are adopting thermal storage on that site, which allows for greater flexibility in the system. If we achieve district heating throughout the country and thermal storage within each of those energy hubs, we then start giving some flexibility back to the grid. All of that plays its part. As to the Deputy's question, we do recognise the issue around communications. Some of the fundamental-----

Deputy Réada Cronin

Sorry, but I am watching the clock. Has the SEAI worked with NGOs like Age Action or the Society of St. Vincent de Paul to target the people most in need when it comes to the warmer homes scheme and that? Some people might not know about the scheme.

Mr. John Randles

Yes, we do engage with the Society of St. Vincent de Paul and various other NGOs promoting the programme. For example, the Society of St. Vincent de Paul would consult us on its budget submission.

Deputy Réada Cronin

Has SEAI engaged with Age Action?

Mr. John Randles

As far as I know, yes.

Dr. Ciaran Byrne

We are on the energy security emergency group, which I mentioned in my opening statement. MABS is an active participant as is the Department of Social Protection. MABS is an NGO-type organisation which we work with on that group.

Deputy Réada Cronin

Last time SEAI was before the committee, it said it was going out to tender on a process of community-based social marketing. Is that up and running?

Dr. Ciaran Byrne

Yes. It is not running yet but the tender process is in train. It was scheduled to go out in July, I think but was delayed by about a month. We are in the process of closing on that tender. We will put specific community-based social marketing activities in place in certain communities. There is a community element and also a research element including understanding behavioural change as a result of the marketing that we do in the communities.

Chairman

Deputy Ó Murchú is a guest of the committee. He is very welcome.

Deputy Ruairí Ó Murchú

Go raibh maith agat, a Chathaoirleach. It is great to be made to feel welcome. I also welcome the guests. This has been very useful. I will talk about Carlinn Hall, a community heating system in Dundalk. It includes 200-odd houses. Initially it was biomass. There have been many twists and turns but it was replaced by gas when gas was cheap and gas is no longer cheap so that is a disaster scenario. It is not a good environmental situation either. There has been a fair amount of engagement between myself, the management company, Frontline which provides the heat which buys from Energia. There have been some dealings with the likes of the eco village in Cloughjordan to try to come up with efficiencies. That is all good stuff. The only real long-term solution is switching to some type of biomass, perhaps woodchip, or geothermal. The SEAI was talking about a feasibility study. I assume that is where it is. Can we get into some detail about that? I am interested too in specifics about the grant structure that would pay for it. The way I see this working in the short term, unless something changes, is that while Frontline was happy enough to buy heat from anyone to a degree, the only way it would be feasible would be for a company to come in and do it and a management company, which was really the residents, would have to come to a deal with them. They would be on the hook financially and they would basically be signing in blood. That might be the only way to deliver a solution. I am taking up time that SEAI could be filling with information.

Ms Kerrie Sheehan

We have started a feasibility study which is really to look at all those factors and come up with a plan. We are not at the point where I could give the Deputy a solution now but we have started it. We are also working directly with the related people. We are looking at it from the geothermal aspect. We might have to do more subsequently but that is what the study is now.

Deputy Ruairí Ó Murchú

The geothermal sounds incredibly interesting. Am I correct that there a similar project that has used geothermal? Could Ms Sheehan go into a bit of detail on that? My understanding is that for this to work you could be talking about going down 2.5 km. Once you go down that far it is free but I imagine there is a significant cost in doing that work.

Ms Kerrie Sheehan

It is not fully my area of expertise. It is site specific. They have to do the exploration to determine how far down they need to go. The heat study said further work was needed beyond 400 m to really understand Ireland's capacity to contribute from geothermal. We will be focusing on this site in particular to determine that.

Deputy Ruairí Ó Murchú

But there are other sites using geothermal.

Ms Margie McCarthy

There are industrial sites. I should have mentioned earlier in response to a question on district heating areas that Cloughjordan is a good example. That is to go back to the Deputy's comment on a good advisory to the particular situation in Carlinn Hall.

In terms of geothermal feeding into district, we are not aware of it currently but we can certainly check that. We have a team who are experts in terms of the geothermal side. The national heat study pointed to the fact that we did not have sufficient geothermal data yet to be able to fully realise its potential in the study and playing into district heating. The Geological Survey of Ireland has been doing additional work and would see significant potential for geothermal, and it could be very cost-effective, in particular in a larger district heating area in a very urbanised area.

Deputy Ruairí Ó Murchú

I suppose the difficulty for Carlinn Hall is that even if a solution comes into play it does not get people through this winter. The prices have gone up recently. I have been inundated with communications from people. In fairness, Frontline dropped its price around 14 June to 32.9 cent per kilowatt hour, which was a spectacularly high price at one stage, but at that time it was a reduction. From 12 October it is back up to 42 cent. Frontline is looking at billing monthly so there is even a slight increase in its standing charge. According to Frontline, it does not make any money from selling the heat but only from maintenance and in other areas. Two things need to come into play as a short-term mitigation. That is how we can get the electricity credits to those people in some way, shape of form, and then possibly by looking at Frontline from a business support point of view once the support funding for energy costs is passed on to the people who live in Carlinn Hall and equivalent estates.

Ms Margie McCarthy

At the moment, the focus of our support is how we can decarbonise energy in the longer term-----

Deputy Ruairí Ó Murchú

That is the only long-term solution.

Ms Margie McCarthy

-----so they are not subject to fluctuations.

Deputy Ruairí Ó Murchú

That is okay. In fairness, what I put on the record is what needs to happen in the short term. There will be engagement with various Departments to deliver this. We are all looking at what could be a very nasty winter, especially cost-wise.

I expect that Ms McCarthy is engaging with the task force on district and communal heating systems. Such systems only really happen in Britain and Ireland. The rules have been changed in Britain in order that this cannot happen. I imagine we are looking at planning regulations that would put a curb on this. My fear, which is based on what I have been told by Frontline, is that developers are continuing with these types of build. That is something we would need to get knocked on the head as soon as possible.

Ms Margie McCarthy

Sure. What the working group is looking at is planning, regulation, financial and research. They are the four key areas being looked at. It is about what is required in terms of regulation in the longer term to have an enduring system.

Ms Kerrie Sheehan

That is certainly on the radar and is being discussed to ensure there is protection.

Deputy Ruairí Ó Murchú

That is it. With the piece of work the SEAI is doing, we need a grant scheme that can take the hook off the residents from the point of view of trying to deliver some of these improved solutions. That is necessary. I get that there will be European state aid rules involved and there may need to be conversations with the Commission.

Ms Kerrie Sheehan

Absolutely. That is another aspect that we are actively examining at the moment.

Chairman

I thank Deputy Ó Murchú. He is very welcome to the committee any time. I look forward to further contributions from him in the future.

Deputy Richard Bruton

I would like to go back to the point Senator Boylan made about the hub controllers and their eligibility. Do the witnesses stand over the figure of a 36% for the reduction in heating need? That seems a very significant reduction for the very low cost that is involved. The witnesses referred to an 80% grant for attic and wall insulation, but if there is that sort of saving to be gleaned from heat controls at such a low price, it would seem justified to promote heat controls perhaps with the 80% support.

Mr. John Randles

The heating controls are about allowing homeowners to manage their heat. It also separates the water heating from the central heating. It is about heat management and resource management rather than about actually saving energy. It supports the behavioural aspect around heating, such as by having better thermostats in the home. That is what it is all about, but fundamentally the grants are still available for heating controls and they continue to be available.

Deputy Richard Bruton

I am sorry, but I do not understand the distinction between heat management and energy saving.

Mr. John Randles

I cannot comment. I do not think that there is an energy-saving component. It is about heat management. Heating controls are about system management - splitting water away from the actual energy system.

Deputy Richard Bruton

Either they do or do not cut energy use. If they are efficient at cutting energy use, surely there is a benefit for carbon, energy use and the whole nine yards.

Mr. John Randles

Fundamentally, we are still grant-supporting them and they are still a popular measure. They are still being grant supported.

Deputy Richard Bruton

Yes, I know, but if they were having that impact - and I do not have information on the capacity - they would certainly be in the 80% support. Only €250 would be 80% and if you could get that sort of saving, it would be a-----

Mr. Brian O'Mahony

If I could come in here-----

(Interruptions).

Mr. Brian O'Mahony

I am not directly connected with this study-----

Chairman

One at a time, please. If Mr. Randles is finished, I will bring in Dr. Byrne and then Mr. O'Mahony.

Dr. Ciaran Byrne

I have not seen the study Senator Boylan was referring to. We can take a look at that, understand exactly what it is referring to and we may revert on it. I know Mr. O'Mahony wants to come in.

Senator Lynn Boylan

I can give a bit of information, just to help Mr. Byrne. I understand it was a trial carried out by or run in association with the SEAI. It was one of the largest field trials ever conducted. That is the organisation that sells this product telling us that. However, it said the trial showed energy savings of 34.7%. That organisation got another economic evaluation which showed even higher savings, but the SEAI trial showed 34.7%.

Dr. Ciaran Byrne

I will reflect on the point and I thank Senator Boylan for those clarifications. I will ask Mr. O'Mahony to come in.

Mr. Brian O'Mahony

We can get the details of this particular study and revert to the committee on it. In regard to heating controls, typically what they do is help to manage the heat, as Mr. Randles mentioned. They can lead to energy efficiency savings. They are still an eligible measure and they have a place in helping people to save money. We completely agree with that, but one thing that can happen is that the level of savings depends completely on the starting point, the level of insulation and energy performance of the home. Many times with these types of controllers and measures people propose, they look at the energy savings from a theoretical perspective and they may see a BER improvement of 36% or an energy performance improvement of 36%. However, in programmes, we also take into account the comfort aspect and behavioural aspect. This is because what can happen is, when somebody does an intervention in their home, such as attic insulation, cavity wall insulation, retrofit or heating controls, they sometimes take some of those savings in improving the comfort of their home. Instead of their home being very cold, therefore, they may heat more of the rooms more frequently. We always have to take account of that when looking at the energy savings delivered.

Deputy Richard Bruton

Maybe the SEAI will come back on this. I did contact it before about this issue and I did not get to bottom it out satisfactorily, so I would appreciate a response on that. I presume that taking savings in comfort applies to everything.

Mr. Brian O'Mahony

Yes.

Deputy Richard Bruton

It could apply to every single scheme. If the SEAI is going to correct for that, it would be correcting for that right across all its saving predictions.

I would like to go back to the other issue the SEAI representatives raised, which was about these obligated entities. What exactly are their commitments now? I was surprised to hear the witnesses say these entities could decide for commercial reasons that they were moving out of one area and into another. I thought this was an obligation we put on them in lieu of their fossil fuel use, that they had a certain obligation. In that context, I would be interested to know if we can put obligations on, for example, generators such as wind generators, which are making very substantial windfall gains, to do something around demand management? How flexible is that tool of obligations?

We have seen significant changes in the relative cost of fuels, such as heating oil, which has gone up by 73% in the past 12 months. Solid fuels have gone up by 32%. Electricity is around the same at 38%. Natural gas has gone up by 60%. Is this having a noticeable effect on the choices that people make? In general, we would not like to see more people using solid fuels as a response to the energy crisis. Is that something that we should be aware of as a risk?

Dr. Ciaran Byrne

I will deal with the issue of energy efficient obligation scheme in the first instance. The key part of that is an obligation that is put on energy providers to help their customers to reduce their energy use. The key tenets of the scheme are that they have moved from shallower measures to deeper measures, so they now have to have a minimum of 100 kWh uplift. That is the crux of the issue, that the energy partner for each home has to have a minimum uplift in terms of the energy performance of the home-----

Deputy Richard Bruton

Is this decided by the SEAI or by the people who -----

Dr. Ciaran Byrne

It is set by the Government.

Deputy Richard Bruton

I see.

Dr. Ciaran Byrne

That is where the transition comes from. We talk about shallower measures, namely, attics, cavity walls and heating controls, and these typically do not achieve that 100 kWh uplift. As a result, the energy partners are moving their focus across to the package of deeper measures. The three I have mentioned are included in the package of deeper measures, but they must do more. That is where particular matters come back into play in terms of making decisions about how they will achieve their obligations. As I said, attics, cavity walls and the heat pumps were what they had done. They had received energy credits for each of those, but they now have to go into deeper measures. That is the context of the changes that are taking place. That was a policy decision and it would have been well discussed, put out to consultation, etc. It was flagged well in advance and will be implemented on 1 January.

I do not have visibility in respect of the flexibility of the energy efficiency obligations, but it is a reasonable proposition that the scope of energy providers is widened to include obligated parties. Ultimately, that will be a matter for the Government and the Department, as opposed to ourselves.

Chairman

I thank Deputy Bruton. Deputy Whitmore is next.

Deputy Jennifer Whitmore

There are a couple of issues I want to cove, the first of which is the scheme for solar installation for medically vulnerable users that was set up under the national energy security framework. That scheme was due to be in place by the second quarter but I am not sure if it is up and running yet. I do not think it is. Can the SEAI indicate when it will be up and running? Will batteries and inverters be included in that scheme in order that those homeowners can continue to use their stored electricity, even if there is a cut-off or a blackout? That is my first question.

Dr. Ciaran Byrne

I thank the Deputy. We are in progress with that scheme. We have submitted and completed a business case, we have worked with the Department on that and we are finalising the legal elements of the scheme with our partner providers. As soon as we have those bottomed out, we will be rolling it out and we will be putting pressure on. The quarter 2 timeline for deliverables was probably somewhat ambitious because this work is in addition to everybody's existing tasks. There are obligations on energy providers. This is not an obligation on them; it is a co-operative piece. That is why it has taken somewhat longer than we would have anticipated. We are close to rolling it out now.

On the second question, inverters are being included in the package. Batteries are not being included because of the cost relative to the benefits of involved.

Deputy Jennifer Whitmore

This question probably follows on from that. It is about the level of resources that the SEAI has and the new programmes that are being put in place. There was an announcement just before the budget in respect of Solar Schools. It was thought that all schools - primary and secondary - would get free solar panels. I had assumed that these would be rolled out through the SEAI because it already rolls out the pathfinder programme for schools. Has it done any work on programme? What timeframes are we looking at? Was there money allocated in the budget for the SEAI to do that?

Dr. Ciaran Byrne

My colleagues on the public sector side will have more detail on this, although I have significant experience regarding solar, microgeneration, etc. To the best, of my knowledge, we do not have full sight of exactly what is planned in terms of the budget allocation and when that might be rolled out. We will be integral in rolling out any programme because, as the Deputy said, we have experience in terms of the grants.

Deputy Jennifer Whitmore

Has there been any discussion between the SEAI and the Department in respect of this programme?

Dr. Ciaran Byrne

I cannot answer that question. I will have to revert to the committee on it because it would be the responsibility of the other part of the SEAI, the public sector business team. We can come back to the Deputy with an update on that.

Deputy Jennifer Whitmore

The pathfinder programme has done 41 schools to date. It has been running for a number of years and has done an average of nine schools per year, so putting solar panels on every single school in the country seems very ambitious. I presume the SEAI would need additional resources to run a major programme like that.

Dr. Ciaran Byrne

Yes, absolutely. Again, I do not have exact details but I understand there are somewhere in the region of 3,200 national schools and not quite as many secondary schools. We are talking about a significant number of buildings. Ultimately, we are leaning into a solar energy sector which, as my colleague, Mr. O'Mahony, said, is scaling up. When we launched the original domestic solar grants in 2012 or 2013 there were only seven or eight providers. We have about 130 solar providers at the moment and we would want to see a significant scaling up of that sector, which we are seeing at the present time. Obviously, additional resources would be required.

Deputy Jennifer Whitmore

If we are looking at outputs and outcomes in the context of energy use, as I said earlier there is quite a strong focus on retrofitting, but it is a lot more costly, more invasive and much slower than solar. One could install solar on a roof in a matter of one or two days and that can reduce energy use by up to 40%. In parallel, one could do a retrofit which could take months, cost an average of between €60,000 and €70,000 and only reduce energy use by 40%. Why is there such a focus on retrofitting? Should that focus be changed now so that there is more of an emphasis on solar? Solar technology has improved and the cost of installation has improved. Should we be seeing a switch in our focus? Dr. Byrne made reference to €240 million for retrofitting this year. My understanding is that the budget for solar is €14 million. Is that correct?

Dr. Ciaran Byrne

Yes, approximately €14 million.

Deputy Jennifer Whitmore

There is a huge disparity there. We seem to be putting a lot of investment into the slower and more resource-heavy end of things, rather than in solar which would give us a quicker win.

Dr. Ciaran Byrne

Just a quick point on that. In the retrofit programme, we have a fabric-first approach which involves getting the fabric structure of the home correct so that whatever the source of heat, less is being used because the fabric of the home has been improved. When we get to that point, we then move to the use of renewable technologies, including heat pumps and solar. Solar power will provide electricity and hot water but it will do nothing for the heating of the home. Approximately 80% of energy usage in the home is for heating the water and the space. We do not want to conflate the two issues. The SEAI is very keen to ensure that people follow through and focus on the retrofit because while we are in an immediate crisis now, we must also look to 2030 and 2050. We want to make sure that the overarching fabric of people's homes is correct. I will ask my colleague Mr. O'Mahony-----

Deputy Jennifer Whitmore

Can I just say something on that? I do not know whether my thinking is correct here but if one is generating one's own electricity and one's own energy through solar, even if one is wasting some of it because one's home has a B or C BER, from an emissions perspective that does not matter. One is generating one's own electricity while not adding to our carbon emissions. In that context, is our focus wrong? Should we not be saying to people that they can generate their own emissions-free solar energy, greatly reduce their energy costs and do so more quickly and more cheaply? If it is cheaper for the State to help them to do that, should that not be our focus?

Ms Margie McCarthy

I will respond to that and my colleague, Mr. O'Mahony, might like to respond too. It is definitely a question of balance. The heat study spoke to the shift in focus to decarbonisation in buildings, leading to the elimination of fossil fuels. We talked earlier about the heat loss indicator playing its part in the installation of heat pumps and getting that to the right level so that houses can still run their heating systems cost effectively. It comes down to what part solar can play in terms of its effect on energy use. As Dr. Byrne mentioned, it will not play as big a part in heating which is a big energy use in the home. What we are trying to do, on the back of the heat study and in the context of a cost-optimal approach, is to encourage people to get their homes to a fabric level that allows them to decarbonise to non-fossil-fuel use. Does Mr. O'Mahony want to come in on the solar piece?

Mr. Brian O'Mahony

Solar PV is a fantastic technology and we have seen the market in Ireland grow from 13 companies to over 150 now. We are seeing solar panels in many homes, businesses and communities in Ireland. We support solar technology in individual schemes, community energy grant schemes and the business scheme that we have now. It has a part to play. When one looks at a typical home, as was mentioned, approximately three quarters of the energy used is for heat and one quarter is for electricity. When one looks at that from a cost perspective at the moment, with electricity, oil and gas prices increasing, anywhere from one third to one half of someone's overall energy bill may be for electricity. Solar PV can potentially contribute in the region of one third of that. It can seem like this is what we should be putting all of our efforts into and scaling up. What is actually happening is that the solar market is growing really quickly. We have seen more than 40% growth year on year. That is essentially down to home owners who see what we call its kerb-side appeal. The solar market has a role to play but the harder effort is to get people to insulate their homes. The insulation in walls, in attics and in the boilers that people look at once a year, at most, are much more difficult and are the areas where we have to support home owners, businesses and communities to transition. Solar PV definitely has a place but it does not lead to the same decarbonisation or energy bill reduction that a retrofit provides. It definitely has a place and that is why it is part of our schemes. We see it as way of bringing people to the SEAI and putting them on the road to decarbonising their homes. The same applies with schools. Solar PV has a role to play in schools and through the community energy grant scheme we have supported some schools to install solar PV, along with energy monitoring, so that we can engage with both the schools and the students.

Ms Margie McCarthy

Can I come back in quickly on district heating? District heating is really where that question comes into play because fabric efficiency is not so essential in the context of a district heating network source. Fabric efficiency becomes much more about the comfort and well-being in the home as opposed to decarbonisation. If we can roll that out in a quicker way, it will answer that question.

Deputy Jennifer Whitmore

The issue is speed. Solar is not perfect, and people would also need to do retrofitting. If, however, we are trying to help people this winter and next, the quickest way to do that is through pushing the solar option, particularly for those who cannot afford it. I refer to people who would be eligible for the warmer homes scheme. That scheme does not include solar which is a missed opportunity. That scheme should be providing free solar for those homes as well. People need to feel the benefit in their pocket and solar is a really quick way of doing that.

Chairman

I thank Deputy Whitmore. I want to jump in on the last point Ms McCarthy made. Surely energy efficiency still matters when it comes to district heating. Did I hear her incorrectly?

Ms Margie McCarthy

Yes, it does matter. One cannot say that district heating is plug and play because the infrastructural requirements are so large in terms of the main transmission lines but for the homeowner, the oil or gas boiler could be replaced with a heat exchanger. That pumps heat into the home. The demand continues to increase if one does not have an efficient home, so it is important to have efficiency. In terms of getting the homeowner on a route to decarbonisation, a simple connection into the home is required once the network is in place. The homeowner is no longer using fossil fuels for what is a significant energy use in the home.

Chairman

Yes, but the waste stream from a data centre or large heat producer will go further if the stock is more energy efficient.

Ms Margie McCarthy

Yes. The more efficient the network and the buildings within it, the more it can be expanded and be extended.

Chairman

I thank Ms McCarthy. Deputy O'Rourke is next.

Deputy Darren O'Rourke

I have a number of quick questions for our guests. We are aiming for 6,600 solar roof installations by the end of the year and 7,500 retrofits to a rating of B2. Do we know how many of the 7,500 retrofits to B2 standard will be achieved by the installation of solar panels alone?

How many of the retrofits to a B2 standard were, or will be, achieved by solar panels alone?

Dr. Ciaran Byrne

I might ask my colleague, Mr. Randles, to comment on that. He may have a figure to hand. We have that information but the question is whether we have the figure to hand.

Chairman

Mr. Randles might know.

Dr. Ciaran Byrne

Mr. Randles might comment.

Chairman

Does Mr. Randles want to come in?

Mr. John Randles

I do not know. I will have to come back to the committee on that.

Deputy Darren O'Rourke

Does anyone have that figure?

Mr. John Randles

The figure is 2,650.

Deputy Darren O'Rourke

I thank Mr. Randles. I have been contacted by people who are engaging with the better energy communities scheme, particularly for businesses that want to use solar energy to reduce their energy bills. There are questions about what they see as shifting goalposts in respect of the guidelines that are coming in. Are the witnesses aware of that issue? Has it been resolved? Has there been a good uptake on the scheme for businesses and others this year?

Dr. Ciaran Byrne

The short answer is that we are aware of the issue. For any sort of a policy change, when we come closer to the time of implementation, changes are made. Those changes relate to the level of solar grant support under the better energy communities scheme. We have a number of projects in and we are looking favourably on projects that have solar in their application and can be completed this year. We have been working with the Department and taking a fairly flexible approach. I will ask my colleague, Mr. O'Mahony, to give the Deputy a tiny bit more detail.

Mr. Brian O'Mahony

There has been no changing of the goalposts. The guidelines specifically state that solar photovoltaic, PV, panels must be installed by the end of the year. The original intent in that respect was that the small-scale generation scheme would be deployed. There is not going to be an overlap between the two schemes and there is going to be a gap. The Department is considering that at the moment and updating the guidelines.

From the perspective of the industry, the second point relates to planning. The planning guidelines were changed last week to allow for more rapid installation. We have approximately 10 MW of solar PV supported through the communities energy grant scheme. We are aware of another 10 MW that we are assessing at the moment. We expect to provide offers and support in that respect. It returns to the previous point. The solar PV sector is important in Ireland now and we want to ensure it is a sustainable sector, going forward, and will be here for decades. When we talk to the companies working in the sector, they have the same perspective and view as us. Some of the earliest companies were here before the start of the schemes and are going to be here after the schemes are given direct government support. It is important that the supports we give to the sector are clearly signalled and those in the sector know when they are going to end and what the supports are.

Deputy Darren O'Rourke

Okay.

Mr. Brian O'Mahony

If there is a gap, such as will exist in 2023, we need to fill it. It is important that many people are employed throughout the counties and constituencies.

Deputy Darren O'Rourke

I thank Mr. O'Mahony. I have his point.

Mr. Brian O'Mahony

It is very important that we support the sector.

Deputy Darren O'Rourke

I am tight for time but I have Mr. O'Mahony's point. What is the total number of households in the private rental sector that have availed of SEAI retrofit grants this year? I expect that there are particular challenges for the private rented sector. What is that figure? Are there plans to improve on it?

Dr. Ciaran Byrne

I do not have that figure to hand. My colleague, Mr. Randles, may have it to hand.

Mr. John Randles

We do not measure if tenants apply. Landlords are eligible to apply for all the demand-led programmes but we do not track how many of those homes are rented.

Deputy Darren O'Rourke

I see that as a problem in and of itself. Since the introduction of these schemes, one of the concerns has been that renters will be left behind. Dr. Byrne mentioned earlier that SEAI has every level of detail. That is fundamental information that would need to be captured in applications.

I see a number of themes in the questions asked by both the Government and the Opposition. Some of them are fundamental. Mr. O'Mahony said we have to do it all and pointed to an area-led approach on the community energy grant schemes.

We see commercial decisions moving to the Department of Public Expenditure and Reform. It is not surprising, given the incentives and plans involved, but there have been a paltry number of deep retrofits or retrofits to a B2 standard in 2022. We have sectoral emissions ceilings reports which state we need to be delivering in excess of 60,000 retrofits a year from 2022. We will deliver 7,500 this year. It strikes me that there is a plan that will deliver B2 homes in new-builds, in the homes of people who can afford it and in already warm homes that get solar panels. At the same time, people living in poverty, energy poverty and colder homes are being left behind on long lists. There is the low-hanging fruit of shallow retrofits and technologies. The change is not happening at the pace and scale we need it to, particularly at a time of energy crisis. What do our guests have to say to that charge? It has been said on both sides.

Chairman

The Deputy should give them more than 20 seconds to reply.

Dr. Ciaran Byrne

The Deputy referred to a "charge". The answer is that every journey starts with the first step. It is important to reiterate that we started on this particular part of the journey on 8 February when we announced the launch of the one-stop shops and the re-profiling of all the grant schemes. We are absolutely in the capacity-building phase. We are looking to the targets that the Deputy and others have referenced and what we need to achieve towards the end of the decade. However, we must build the foundations. We have seen solarcoasters in other jurisdictions, with solar panels going up and down. We have seen changes having dramatic impacts on the insulation industry. We are trying to build a steady, stable platform that is accessible across the schemes and across the country. We are focused on 2030 but the long game will ultimately run to 2050. We are at the early part of that journey. I would like the opportunity to come back before the committee at whatever regular interval it wishes to report on how we are progressing on that journey. However, as we have referenced a few times, we are pushing into a sector. As the Chairman mentioned, we are close to economic full employment at the moment. We are pushing into a construction sector that is seeing constraints. There are constraints too around the education and health sectors, and any other sector one cares to name. We are working in that frame.

Deputy Darren O'Rourke

The question is about the targeting of the resource and delivering efficiently and effectively. The point has been repeatedly made about the low-hanging fruit of shallow retrofits. All the incentives are to move into deeper retrofits that are incredibly slow.

Dr. Ciaran Byrne

In fairness, we have delivered 260,000 roofs, with 220,000 in cavity grants delivered over the past ten years. There has been significant delivery in that respect. Since the warmer homes programme was established in 2009, 143,000 homes have been tackled. We are not starting from a standing start. A significant volume of work has been done. As we have referenced in the course of the meeting, the year-on-year growth in respect of attic and cavity grants this year alone is heading towards 300%. We are pushing forward.

Senator Lynn Boylan

I will come back to attic insulation spending, the hub controller and pick up on the point that the SEAI does not collect data in respect of tenants. I know that in the spending review of the Department of Public Expenditure and Reform in 2020 and the social impact assessment, the Department flagged the fact that we are not collecting those types of data so we do not know whether we are reducing energy poverty as well as reducing our emissions. Are there any plans to collect those kinds of data around the demographics of households? Has that been happening since that Department report can out? Is SEAI doing that at all? I know our guests said it was not collecting those data in respect of tenants. Are any data being collected about households?

Mr. Brian O'Mahony

For the warmer homes scheme, we have a suite of eligibility criteria that allow access to the scheme. We would collect those data.

Senator Lynn Boylan

Yes.

Mr. Brian O'Mahony

We must be prescriptive in respect of the other schemes, which are demand-led so people come to us.

Senator Lynn Boylan

If we are shifting a considerable amount of public money to a demand-led scheme, we have information on those who are eligible. We are giving away public money in the form of grants. Are we collecting any data about the demographic of those households or their expenditure on energy?

Dr. Ciaran Byrne

We would not do it in a systemic way in terms of per-grant applications. We work a lot with our research colleagues. We have a behavioural research unit that does much of that type of analysis but not on an individual home level. If you apply as an individual for a better energy home grant we do not profile you or look for data from you, because I do not think we can, concerning your particular demographic. Through our behavioural unit we look at where the money is spent, what is happening and what the various trends are there.

Senator Lynn Boylan

If we are giving public money to households surely we can ask them what the household income is and what their expenditure is on energy? We are giving them public money.

Dr. Ciaran Byrne

I do not want to get into the ins and outs of it but we are quite constrained in what we can ask by the GDPR and the lawful basis on which you can do so. I do not want to give the Senator a definitive answer here but we have hit up against that speed bump a few times.

Senator Lynn Boylan

Okay. The other question goes back to the attic insulation again. It is that same spending report. I think in 2011, €78.1 million was spent on energy efficiency and in 2015 it was €43 million, which is a 45% decrease based on my back-of-the-envelope figures. Mr. O'Mahony mentioned policy changes ten years ago. Was that a policy change to reduce the amount of expenditure on energy efficiency or was it that it was an underspend? In other words that 45% reduction spent by the SEAI on energy efficiency was because of the behavioural changes and people not opting for those schemes. Am I making sense?

Dr. Ciaran Byrne

I think so. I might-----

Senator Lynn Boylan

We do not have a breakdown of what the authority spent the energy efficiency funds on. If the officials do have that, how much of the expenditure between 2011 and 2019 was on attic insulation? There was a 45% decrease and I am asking if it was a decrease in the allocation given to the authority by the Department or a decrease due to an underspend because people had shifted and gone in different directions?

Dr. Ciaran Byrne

I might ask Mr. O'Mahony to comment at a high level of detail on what we have been doing. The Senator has asked a very specific question-----

Senator Lynn Boylan

Yes.

Dr. Ciaran Byrne

-----so we will come back to her with a very specific answer outside the committee because I do not have that information to hand.

Senator Lynn Boylan

I understand that.

Dr. Ciaran Byrne

Mr. O'Mahony might be able to comment more generally.

Mr. Brian O'Mahony

We will revert on the specifics of the questions and we can explain for each year from 2010 onwards what we believed happened in the market and how it reacted to the changes we made to the schemes. The data I think we provide on our website with regard to this only go back to 2015 but we can revert in specific detail on the changes throughout those years.

Senator Lynn Boylan

Brilliant. That would be great.

I return to the hub controller because I am not clear on it. I think it was Mr. O'Mahony who was very categorical in saying the likes of the hub controller is still something people can opt for and they can still get funding provided to have these installed in their houses. However, when I met the organisation that provides these it said with the changes to the energy efficiency obligation scheme, it is no longer going to by funded by the SEAI to put the hub controllers into people's households, so maybe there is just-----

Dr. Ciaran Byrne

There is a bit of confusion there. It is around the energy credits piece. You can get a grant today or tomorrow for a heating control to go in your home. That is there and has not changed.

Senator Lynn Boylan

Okay.

Dr. Ciaran Byrne

The grant is €700 which is a significant contribution towards the cost of that. Where the piece comes from the providers is that there would have been additional credits that incentivise them to put in these heating controls. They are no longer going to be available because the credits are going to the deeper measures but a private individual can apply in the morning and get a grant for a heating control and it is €700.

Senator Lynn Boylan

Okay, and that will continue beyond 2023.

Dr. Ciaran Byrne

That will continue.

Senator Lynn Boylan

That is great.

Dr. Ciaran Byrne

That will continue as part of the wider grants.

Senator Lynn Boylan

Great. I thank the officials.

Deputy Richard Bruton

One of the groups I am interested in is small enterprises and how they are taking up opportunities. There was recent publicity about the fact not having a fridge door on your fridge means you could halve your energy use by simply retrofitting a door to it. Is that sort of initiative by a small business open to support? I am aware of the EXEED scheme and so on but they sound like much bigger types of scheme. Is there support for such a retrofitting activity or can small enterprises get accelerated capital allowances?

When the loan scheme comes, and I appreciate it is not quite there yet, is the SEAI planning to confine that just to the one-stop shop people who do the big lot together? Alternatively, and to take Mr. O'Mahony's point, is the authority going to get the loans to the smaller people who do a few measures and might otherwise struggle with the funding of the 50% that falls to them?

Dr. Ciaran Byrne

I will start with the second piece. The loan scheme is going to be run through high street and pillar institutions so it will be open to individuals and non-commercial landlords to just go in and apply as you would go into a bank or post office to get a loan. There will obviously be criteria and we are lining up the eligibility criteria with the criteria around the schemes as well because you do not want a situation where your criteria for the schemes are X and your criteria for the loans are Y. They will be open to anybody to apply for as a private individual.

The Deputy raised the small energy grants scheme and the other situation with the small enterprises. Mr. O'Mahony may give more detail on this but under the community energy grant scheme we go into small businesses and community centres and look at the full suite of options that are available to a small business to improve its energy performance. Some of that is to do with the electrical costs around refrigeration and things like that. Mr. O'Mahony may want to comment on that.

Deputy Richard Bruton

Do they have to be part of an area group scheme or can they do it individually?

Dr. Ciaran Byrne

They are individual in the sense a project co-ordinator comes in and brings a number of strands together to form a larger project but they will go into individual-----

Deputy Richard Bruton

A sector could therefore target fridge doors in retail or something, or fishmongers.

Dr. Ciaran Byrne

It is not targeted in that way. At this point in time to the best of my knowledge there is nobody exactly taking that particular one and doing a grant programme for putting fridge doors in retail establishments or garages or anything like that. As part of the wider work, when you go into a small business and look at the energy provider the project co-ordinator will get an energy audit and look at the measures available to that business. Normally, what the Deputy has just described is one of a suite of measures you would be recommending and we would fund that package for a small business through the community energy grant scheme.

Deputy Jennifer Whitmore

I want to get down to the numbers and talk about the B2 and the target of 500,000 by 2030. The last time the authority was in I asked for a projection on the numbers, and I think Deputy O'Rourke did too, of how many B2s the authority expects to have installed by 2030. The question is whether that target will be met. I have not seen that projection, though the authority may have sent it and I missed it. If the SEAI has not sent it I would really appreciate it. How many B2s have been done to date? It was mentioned earlier.

Dr. Ciaran Byrne

This year the target was 8,640 and we have 5,500 or thereabouts done this year.

Deputy Jennifer Whitmore

It is 5,500 this year. How many have been done to date in total?

Dr. Ciaran Byrne

I do not have that figure to hand. Mr. Randles might be able to give me a hand on that specific figure of B2s to date. We do not have it. I will revert to the Deputy on that specific figure.

Deputy Jennifer Whitmore

The officials do not have it. There is a target of 500,000 and a B2 is quite an intensive retrofit. There will be a ramp-up and we know the SEAI is in a capacity-building phase, so what happens next year will be much more than this year and it is to be hoped we see that progression.

Mr. John Randles

Apologies but if I can come in, I had to run the report. The figure is 16,000 B2s.

Deputy Jennifer Whitmore

That is to date.

Mr. John Randles

To date.

Deputy Jennifer Whitmore

That therefore includes the figure Dr. Byrne just gave me there.

Mr. John Randles

Yes, it includes everything.

Deputy Jennifer Whitmore

The figure is 16,000. That leaves 484,000 to be done in eight years, which is a considerable number. In order that we can walk away from this meeting comforted the 500,000 target will be met, we need to see what the target is for next year. I assume the authority has projected this out on an annual or even a quarter-by-quarter basis. It needs to know what number it needs to be hitting between now and 2030 to ensure the 500,000 target is met. We cannot afford to come to 2028 and realise that is way out of reach. Can the officials provide that to us? I assume the authority has modelled and projected this information. Will the officials provide that to the committee because it would be really useful?

Dr. Ciaran Byrne

Yes.

Deputy Jennifer Whitmore

Okay. I thank Dr. Byrne.

Dr. Ciaran Byrne

Our target next year is approximately 12,200 but it is about where you are starting from and where you are getting to. That is the current target.

As part of the journey we mentioned, we are trying to refine the schemes and drive them further. We are starting at 12,200 next year, but we want to increase that. We would call it the floor target.

Deputy Jennifer Whitmore

It has changed. In the programme for Government, it was 500,000 B2s. Now it is 500,000 B2 equivalents. There could be two B3 homes that make up the B2 equivalent.

Dr. Ciaran Byrne

The Deputy is touching on an important point. I will bring in my colleague, Ms McCarthy, the district heating evangelist. The target is not B2s per se. Rather, it is CO2 emissions reduction. When we looked at the best way of reaching that target, we looked at B2s. In terms of energy savings on an individual home basis, though, taking a home from a G rating to a C rating probably saves more CO2 than taking a home from a B3 to a B2 rating. We will be examining the relative proportions of the package build-up in terms of how best to achieve CO2 emissions reductions. This is where district heating comes in. If we roll out district heating at a greater level than is currently the case, it will effect a greater reduction in CO2 emissions, which would impact on the other set of targets.

Deputy Jennifer Whitmore

Dr. Byrne made a point about district heating, but does it not also have to do with solar? If the ultimate target is emissions reductions and if we can cut a home's emissions by 30% within a day or two, should that not be where the focus lies? The figure for solar this year is €14 million, yet the figure for retrofitting is €250 million. It is way out of kilter. The focus is completely on retrofitting.

Dr. Ciaran Byrne

That leads back to the point Mr. O'Mahony made concerning energy usage in individual homes. Some 80% is for heating, but solar does not address that heating. Heating is carbonised-----

Deputy Jennifer Whitmore

We are not looking at energy. Rather, we need to be considering emissions.

Dr. Ciaran Byrne

Yes.

Deputy Jennifer Whitmore

If the metric is emissions and if we can reduce them quickly by 25% by spending two days installing something cheaply for €8,000 or whatever, should the focus not be on that?

Ms Margie McCarthy

There is a combination of the decarbonisation of the grid, the electrification of these technologies and the move to heat pumps. The majority of energy usage in the house is for heat. By installing a heat pump, someone is decarbonising that usage and reducing emissions immediately. We are examining the barriers to grants for heat pumps and trying to broaden them out to more homes, which will have a greater impact on emissions. If the electricity grid meets its own targets, it will get us to 80% renewables by 2030.

Deputy Jennifer Whitmore

Electric vehicles and heat pumps will represent 13% or 15% of our electricity use. If a home can produce that electricity itself and use the car as a battery, it will support the grid. There would not just be a benefit in terms of emissions reductions, but also a grid security benefit through this capacity. Does the SEAI have conversations with the CRU and EirGrid on these matters?

Ms Margie McCarthy

All of the time.

Dr. Ciaran Byrne

There is another perspective, one that Mr. O'Mahony mentioned. To use a phrase, it is "solar bling". I do not mean this is a pejorative sense. One of our concerns is that, while we know the importance of retrofitting and improving the fabric of the home, we also know that people have a limited amount of funds to do that. There is another phrase – "You can only spend your money once". If the homeowner puts money into solar, will it impact negatively on his or her ability to insulate the fabric of the home?

Deputy Jennifer Whitmore

Okay.

Dr. Ciaran Byrne

I take the Deputy's point about the installers coming in for what is only a half-day or day job and then leaving, but it is like when someone installs a gas boiler and is locked in for 15 years. When someone installs solar, that person spends money for fixing up his or her home on solar instead of retrofitting. There is a benefit, but there would have been a greater benefit from the fabric piece.

Deputy Jennifer Whitmore

Does that not mean that there is a greater incentive for the homeowner to retrofit, given that the grant is larger? There is no solar grant for people on lower incomes and the grants for solar are low compared with retrofitting. I see it as part of the package, but someone on a low income will not be able to afford solar even though it would reduce his or her energy costs by 30% or 40% immediately.

Dr. Ciaran Byrne

There are two elements to that, although I appreciate that they are blended.

If someone installs solar now, it will help with his or her electrical costs. We are in a crisis, so I take the Deputy's point in that regard and it is why we are looking at the issue. However, the fabric upgrade helps more in the longer term. It moves a home away from CO2 emissions and into renewables, decarbonising the home. These two elements – the shorter term and longer term – are blended together.

Deputy Jennifer Whitmore

I agree. The focus in the short term should be on installing solar panels on every low-income home free of charge before using the next eight years to retrofit and address the fabric issue.

Dr. Ciaran Byrne

There are also capacity constraints on the solar side. We have 150 or so manufacturers, all of which are busy. Solar is popular.

Deputy Réada Cronin

I wish to follow on from Deputy Whitmore's question on solar power for the medically vulnerable. What are the witnesses' opinions on the fact that storage batteries are not provided with panels? Is it not a waste not to have a battery provided at the same time, particularly for people who are medically vulnerable?

Dr. Ciaran Byrne

We considered this matter and examined the best combination of measures that we could put in place. It is about trying to stretch a limited budget as far as possible. The best combination of measures at this time is to put an inverter in place rather than a battery, given the relative cost of the battery.

Deputy Réada Cronin

What is the approximate cost?

Dr. Ciaran Byrne

It is €7,000 to €8,000 for a battery with a capacity that could make any useful difference. It is the same old story of having to balance things, in that you can do more of the less effective versions or do less of the more effective versions. That is the rationale.

Deputy Réada Cronin

There are not many people who fall into the medically vulnerable cohort.

Dr. Ciaran Byrne

We have approximately 10,000 on the list, give or take.

Deputy Réada Cronin

I wish to ask about the data that are available on income demographics as they relate to those homes that have availed of the SEAI's grants thus far. In response to Senator Boylan, it was stated that providing those data was not possible because of GDPR. The SEAI is a Government agency.

Dr. Ciaran Byrne

I would like to clarify that. I did not want to give Senator Boylan a prescriptive answer because I was not 100% sure. We have hit up against GDPR issues before in terms of what the information was being asked for, the lawful basis etc. I did not say what the Deputy said. It might be possible to provide the information, but we will have to take legal advice.

Deputy Réada Cronin

It might be possible to collect the data in an anonymous format; we do not need to know the names and addresses of the people in question. The SEAI is a Government agency. Has it spoken to the Minister, Deputy Eamon Ryan, about trying to push this?

Dr. Ciaran Byrne

We are a Government agency but, no less than anyone else, we are subject to the full rigours of the regulation on data protection.

Deputy Réada Cronin

Of course.

Dr. Ciaran Byrne

We have had significant interactions, for example, via the ESEG, and have tried to get information from the Department of Social Protection. Strong data sharing and data controller agreements have been put in place. I am not saying that what the Deputy is asking for is impossible, but we are focused on getting the delivery and demand schemes out. This is another area to consider, and we are happy to do so.

Deputy Réada Cronin

Would Dr. Byrne be willing to give his opinion to the Department that he believes this would be a worthwhile exercise?

Dr. Ciaran Byrne

Yes, it would be. We are anxious to use and understand the post-retrofit analysis. We are looking at that. There are also potential GDPR issues with it. This has to be built into the equation from the very start.

Deputy Réada Cronin

I thank Dr. Byrne.

Deputy Ruairí Ó Murchú

There has been a fair bit of repetition. What people want to see, and what the witnesses are looking for themselves on some level, is work on decarbonisation and what can be done to deal with the cost-of-living or energy crisis. We need a grant scheme that provides the best bang for our buck, particularly for those who cannot afford it but most need it. There is a general notion in this room about delivering that. There is a specific piece of work that needs to be done across the board.

As regards the heat loss indicator survey and that thing that was spoken about for a long time, an awful lot of people said that the only thing that really mattered for decarbonisation was not so much retrofitting but getting the cosy effect from the likes of heat pumps. I noticed prior to energy costs going through the roof when someone opened the door one when I was canvassing on a newly-built estate, I would be whacked by the heat coming out the house and the residents would speak about how great that situation was but I probably was not getting the environmental impact whatever about the cost savings and how comfortable the heat was. The issue is delivering that. It is finding the exact mix and what is needed to ensure a house is airtight enough that a heat pump will work.

It has been mentioned that the survey will take a number of years but information will be forthcoming fairly quickly. How quickly can we get an indication of a fit-for-purpose system that can do real business from the point of view of decarbonisation while ensuring that there are cost savings? I get the point that there is a particular way that people must operate heat pumps because at the moment electricity also costs a huge amount. It is wanting to be airtight versus getting a high BER rating, etc.

Ms Margie McCarthy

The heat loss indicator study should provide an initial review by summer of next year. We need a two-year process for us to get full results but there is another part to this. Like the Deputy said, the SEAI has a behavioural economics unit. The unit has done an awful lot of work examining the operation of heat pumps once installed. That issues are: what role does the heat pump installer have in driving those behaviours and how can we create better awareness among homeowners on how to operate this technology? Quite a central point of that is the installer. An installer should not just install the technology but spend a bit of time explaining to people how to use the system, which is an aspect on which the behavioural unit has done a good study. That aspect directly impacts on the efficiency of the pump, how that affects an electricity bill and the comfort of one's home. Like the Deputy mentioned, a heat pump creates a different type of heat as it is across the home as opposed to just being central points of heat.

The behavioural piece is about how to help people once a heat pump is installed and when it is being installed. The heat loss indicator survey is about whether we can get people and a grant level, and eligible for a grant, in a home that may be less efficient than is currently required for a grant. Next summer we will have an initial reading from the survey but we will not have the final study.

Deputy Ruairí Ó Murchú

I get that but next summer we will be in a better place to put in play a fit-for-purpose scheme and will know whatever changes need to happen.

Ms Margie McCarthy

Meanwhile, we have looked at homes about which we have information and data available to us. These homes that are pretty much heat pump ready but are currently oil fuelled and we are trying to market directly to them, increase awareness of heat pumps and what they can do, and of the grants system. In the meantime we are targeting those homes.

Deputy Ruairí Ó Murchú

Again, that is necessary work. People who are still using solid fuel and do not have much of an option at the minute remains an issue. We need to give them that option and it is necessary that this work be done.

Can I assume, regarding the information from the behavioural unit, that the SEAI has a set of instructions for best case delivery?

Ms Margie McCarthy

We are disseminating that through the various suppliers while working with the delivery teams, etc. We publish that information as well and are happy to share it with the committee as a follow-up if desired. We try to make the information as user-friendly as possible.

Deputy Ruairí Ó Murchú

I am only a visitor but I imagine that the committee would like to receive the information.

Ms Margie McCarthy

We bring the information from research level down to accessible pieces so that the learnings are usable by heat pump installers and homeowners.

Deputy Ruairí Ó Murchú

That is necessary because one can be shown something, yet two days later forget the information unless one has a simple set of instructions to hand. So as not to offend half of the country I confirm that I am speaking about myself and not about anybody else.

I am not sure if the following observation is fair or unfair. The owner of a middle-sized contracting company came to me and said that the problem at the minute is that the company is still doing pieces of work in homes and applying for the grants for people but the company cannot apply for the same sort of grants that are available to those that can go directly through the one-stop shop or whatever. He spoke about that being a difficulty for contractors. He also spoke of the one-stop shop being a closed shop in the way it operates and said he believed the qualifying criteria and capacities are not particularly reasonable. This all sounded reasonable to me and I look forward to hearing an answer from the delegation.

Dr. Ciaran Byrne

On whether the situation is fair or unfair, I am not sure and I just think that it is interesting. I can understand the dilemma where a contractor looks at these one-stop shops being treated like a favourite son, as it were. We have 12 places in the pipeline and ten more to go. We have relatively strict qualifying criteria because we want people to operate at scale. It is very difficult to retrofit a retrofit so we want to make sure we have a quality system base. A key driver in a one-stop shop is having those quality processes in place. Many of them, though not all of them, have got ISO 9000 certification and things like that so there is that piece in the market.

I reiterate that we are on a journey. Many individual contractors are working with one-stop shops presently. For example, some of the one-stop shops come from the construction sector where they are doing it themselves and some come from the project management side of things where they are contracting in very many individual contractors. I can understand people looking to get into it. If you are a medium-sized contractor, there are constraints in place. We have the community energy grants scheme where we encourage people to get involved in multiple projects, build up those skills, learn the lessons and then apply to become a one-stop shop. Nobody is excluded per se. It is about growing into it.

Deputy Ruairí Ó Murchú

If a homeowner goes directly to the contractor and the contractor applies for grants, is there stuff they can no longer avail of?

Dr. Ciaran Byrne

No. I suspect the Deputy is getting at the fact that the menu of options available for the full deeper retrofit is bigger than an individual home or steps. That is the case.

Deputy Ruairí Ó Murchú

That is fair enough.

Chairman

I have sympathy for our guests. Usually questions are spread among more guests. It feels like quite an interrogation. On the point about batteries made by Deputy Cronin a few minutes ago and, I think, by Deputy Whitmore earlier, correct me if I am wrong but the rationale for this scheme is not to protect medically vulnerable people from a power cut situation but to reduce their costs by providing solar panels and an inverter. Is that correct?

Dr. Ciaran Byrne

Yes. Typically, medically vulnerable people have no options to reduce their use. That is the whole point of it. The Chairman or I can switch off lights etc., but a person who must use a particular machine such as some sort of dialysis machine must keep that machine on. We have all seen on the news people with multiple types of machines and, therefore, with very significant energy costs they cannot avoid. That is the rationale behind this.

Chairman

I want to go back to the issue of district heating. Did the study primarily examine existing waste heat streams, potential future waste heat streams or both?

Ms Margie McCarthy

The study looked at heat densities, so it was more about the demand to begin with. We are now looking more at where are the potential heat sources because it will be seen from that heat study that a lot of the heat within district heating came from the likes of heat pumps and biomass as well as industrial waste heat. As referenced earlier, geothermal energy played a smaller part but data centres certainly were not a key feature or focus of meeting the demand. That is quite a local area. Now that we have identified about 80 candidate areas to meet the target of 2.7 TWh per year, it is about looking at those candidate areas, where are the anchor tenants and where are the base best heat sources.

Chairman

That is quite interesting. It is going the other way rather than saying we have this much heat and how can we use it, and we have this much demand and how can we now match the generation of heat.

Ms Margie McCarthy

That seems to be the way for a jurisdiction like Ireland where we do not have an established district heating network approach.

That is really where other countries like us are starting off. They are looking at where are the candidate areas and then doing the deep dives into those whereas our Scandinavian and Nordic neighbours have had a longer lead-in time. Some of those might have come from declaring they had waste heat here and agreeing to harness that into a network. Others may have come from having a large district or urban area that they really want to decarbonise and deciding to look at heat pumps etc. It has been more of an organic journey. Ours will have to be more focused on where is our best effort to get this up and running to have it established at a critical mass.

Ms Kerrie Sheehan

It is ultimately fuel displacement and the source is agnostic. It is what is best for that. The feasibility studies will determine what the best source is for that particular case.

Chairman

One could identify, or SEAI has identified, via the heat study that there are certain places that do not have a heat source but are suitable for district heating. We could take that result and put them in places where there are many heavy industrial plants that will have waste heat, which is ideal for district heating.

Ms Kerrie Sheehan

Or biomass or geothermal.

Chairman

Yes.

Ms Margie McCarthy

Currently, with the next stage of work from the study, we have identified in candidate areas where are the anchors. That is a key piece for public and private investment in the area. All part of the conversation currently is who will be the anchor tenants and is there good heat demands in the area, not only residential and smaller businesses but solid source anchor tenants. That is what one sees in most of the successful networks. They started off with key public buildings and maybe leisure centres, swimming pools, hotels and hospitals, which are the big high-heat demand buildings in a network that give a guarantee that one will have a certain amount of baseline demand before connecting other customers. That is a big part of the business model for it.

Chairman

Acknowledging that we are starting out on a long journey here with district heating, I am conscious that we want to push on as well. I am wondering what the next steps are. Obviously, that heat study is a foundation for our understanding of demand, but what happens next? We mentioned matching heat generation with demand. What kind of policy developments or reforms are needed going forward?

Ms Margie McCarthy

I will come in one issue on that and then hand over to Ms Sheehan, who is working closely with the working group.

One key aspect is a decision nationally that district heating is an option we want to drive home with. Ms Sheehan will speak to the various parts of the working group there. The second is getting in to local authorities, which are currently looking at their local renewable energy strategies and their climate action plans and at a local level are working with their climate action regional offices, CAROs, and literally explaining what district heating is, the opportunity it offers and showcasing what is about to happen in Tallaght. That is a capability that will have to build very fast across Ireland. When we talked about capability constraints, that is one that we will really have to look at because building that capability into Ireland to be able to deliver it at pace is probably one of our biggest challenges. The other is general acceptance and public knowledge and awareness of what the system offers.

Chairman

Before Ms Sheehan comes in, and I suspect I know the answer to this, is the capability not there at local authority level? Local authorities tend not to employ mechanical engineers. Am I correct that is the skillset that is needed there to understand energy and heat? Maybe some are better than others.

Ms Margie McCarthy

There are various models being considered currently through the district heating group. Without pre-empting what the output will be, what one will see from other jurisdictions is that local authorities or municipalities need some hand-holding in terms of expertise and guidance from a national level as to how to role out these projects. Certainly, there is lots of that knowledge available.

Chairman

They will understand their own area quite well but might not understand the opportunity that exists in their own area.

Ms Margie McCarthy

Exactly.

Ms Kerrie Sheehan

There are six prongs to what has to happen to get to where we need to go to. It is the national strategy, that Ms McCarthy was talking about, and then designating roles and responsibilities across the system to do it, from regulation, planning, finance, support, what local authorities do or do not do, and private or public decisions.

On funding, it will cost to build out at scale. There is that knowledge base about public perception and then all the different actors across the system. There are questions. For example, what is district heating and what does it mean for them? It is about building up that awareness and acceptance. On market development, we cannot do anything without the sector mobilised and having confidence to operate within in. Then there is skills and capacity. Everything comes back to that key component. There are skills but it will have to be adapted to district heating. Some of the skills are needed in other areas and that is another prospect.

Ms Margie McCarthy

We have done this before as a country. We have rolled out system-wide networks and we know how to do it. It is a different type of technology but the strategy technology is fairly simple. It is a matter of the acceptance and commitment to doing it and raising the finances. Whilst those decisions are being pulled together and recommendations are being considered for them, we at SEAI are trying to get in place this area mapping so that when those decisions are ready to be made we will be ready with the information to say across the country these are the highest candidate areas, and when we get to the next stage that these are the next candidate areas, as we roll out climate action plan targets over the period up to 2050.

Chairman

I am conscious that we plan on building hundreds of thousands of homes in the next few years but I wonder is there enough thinking around district heating. It is probably not for Ms McCarthy to answer. All this work is good but, separately, all those homes are being planned. Much of it is developer-led. It seems that a ball could be dropped here quite easily and opportunities missed.

Ms Kerrie Sheehan

We need joined-up thinking. The steering group is active and motivated.

Chairman

Is the Department of Housing, Local Government and Heritage on the group?

Ms Kerrie Sheehan

Yes, for the planning and the building regulations, and the regulator, the Department of the Environment, Climate and Communications and local authorities. It is active and mobilised. Our role is to provide the evidence base for those decisions.

Chairman

I thank Ms Sheehan.

Deputy Cormac Devlin

I thank the Chairman and appreciate him letting me come back in. Apologies, I had to attend another meeting.

Earlier I heard the figures relating to the warmer homes scheme. They stated that 3,200 homes had been delivered so far this year, 1,300 contractors were involved with 328 to join and there were 11,300 applications with 420 in progress. If my figures are incorrect, I ask for them to be corrected. There is a waiting time of 28 months with ten months for the survey delivery. Is there scope to improve those timeframes, particularly that ten-month delay? We are talking about people who are in dire need. Many of those houses have a low energy rating to begin with but they households also are on low income. How can that process be sped up?

My second question relates to the retrofitting. I have had a few queries where people are concerned that the basic retrofitting was not done to the correct standard a number of years ago. Does it automatically preclude them from the 80% grant if their house is not up to a certain specification? If the witnesses could answer those two questions, I would appreciate it.

Dr. Ciaran Byrne

I thank the Deputy. I will take those two questions. To clarify, on the warmer homes scheme, we have 33 contractors. It is a procured panel. The one with the 1,300 contracts is the better energy home scheme for individual measures and that is growing. A constraint to be aware of on warmer homes scheme is that it is a procured panel. There are 33 contractors on it and we have to work through those 33 contractors. On that scheme, the Deputy correctly identified that there is a significant period in terms of getting them done. We have discussed and developed proposals which we have now with our parent Department regarding how we expedite that and bring that waiting period down. That is one part of it, albeit a slightly larger one.

Within the scheme itself, there are also so-called "pain" points.

This is a phrase we use on the customer journey where we look at every single part of the journey, we ask how we can make that better, what are we doing here and what is adding value. It is that point of designing a constant iteration of improvement. Can we make marginal changes across multiple parts of the process to improve the cycle time? We are doing as much of that as we can. We are also trying to make it beneficial for contractors. For example, we have given them a 4% increase in the rates across all measures earlier in the year and we have just implemented a 75% stage payment, which improves the cash flow for contractors on that scheme.

On the second question which was specifically around retrofitting and eligibility, people are not eligible for a scheme where they cannot be funded twice for the same measure, if that makes sense.

Deputy Cormac Devlin

Okay.

Dr. Ciaran Byrne

On the one-stop-shop scheme, there is a minimum uplift requirement to get to a B2 or 100 kWh. For individual measure schemes, where one does such measures, there is no minimum uplift required. If one has availed of one type of measure a number of years ago and wants to do another one, that person is more than entitled to apply.

Deputy Cormac Devlin

I thank Dr. Byrne for his reply. If, for instance, a good few years ago - Dr. Byrne is correct in that this was under a certain scheme - somebody applied for attic insulation which did not bring the property up to a specific standard, due to fact they applied for it under the previous scheme, irrespective of how good or beneficial it was, is it correct to say that they cannot re-apply under the 80%?

Mr. John Randles

That is correct, yes, because that is only one measure.

Deputy Cormac Devlin

Okay, I thank our SEAI guest speakers.

Chairman

I thank Deputy Devlin and call Deputy O’Rourke.

Deputy Darren O'Rourke

I have a number of quick questions. The case has been made on delivery, picking up on a number of points already made, that if we got the plan-led approach in district heating on residential and commercial planning, that we could deliver homes more cheaply and more quickly. Industry has said that if it took that approach with district heating, homes could be delivered more cheaply, and 14 days more quickly. Is that something the Sustainable Energy Authority of Ireland, SEAI has heard of, concurs with or is familiar with?

Ms Margie McCarthy

I believe this question points to location targeting. Is that what the Deputy is referring to, namely, targeting where we would run incentives and how we would support various ways of decarbonising heat? District heating would play its part in the demand side unit, DSU, element of that.

Deputy Darren O'Rourke

This will also be in respect of delivering new homes and local area plans. If we employed district heating for the new homes to be built, they could then be delivered more cost effectively and in a quicker timeframe because one is then taking a plan-led approach as opposed to repeated individual connections.

Dr. Ciaran Byrne

If I may make a point, as a general rule of thumb, it is always easier, quicker and cheaper to do it the first time. As when we discussed the retrofitting piece, to go back and do something afterwards is going to cost more. As the Deputy has correctly pointed out, if we can plan this in, where we have discussed district heating areas, where we know we need homes and can layer those up, it is probably ultimately cheaper to do it right the first time than to have to go back in afterwards.

Deputy Darren O'Rourke

Returning again to that point of low-hanging fruit and achieving quick results, I am minded that both the Climate Change Advisory Council and others such as Friends of the Earth have said that at this point in time, we need to get attic and wall insulation, in particular, delivered at scale for this winter. They talked about the need to provide not 80% but 100% grants. Is that a case that the SEAI has heard from them and is it something that SEAI is considering or has considered? If it has considered it, what conclusions has it come to?

Dr. Ciaran Byrne

Yes, we have.

Deputy Darren O'Rourke

SEAI has heard from them then.

Dr. Ciaran Byrne

Unfortunately, one could not not hear it. We talked at the beginning of this meeting about inflation. Talking about 100% sounds great and that we will just pay for it. First, there was a scheme in England that did just that. One of the biggest limitations of the 100% grant was to get people to clear their attics. They set up a charity to help people clear their attics to go and get the thing done. The other thing about 100% grants is that it is highly likely that we will end up driving inflation in the scheme. While one talks about 100%, it sounds great in theory but it will end up just costing the taxpayer and the State more in terms of what is done.

There have been various ideas on how we build scale on our schemes and we are trying to balance out building the scale of the schemes with the governance requirements we have. We talked earlier in this meeting that we are spending significant amounts of Exchequer funding on giving grants to homeowners and we have to ensure that they are done at the right level and quality. These are issues we have to consider and they certainly impact on how one delivers at scale.

I will hand over to my colleague, Dr. Brian O'Mahony, who may want to make a comment on the 100% grant issue which he has looked into.

Mr. Brian O'Mahony

Earlier in the year we look specifically at the 100% rate grants and then at the different types of homes. Based on instruction from the Department, we looked across the stock of houses that we delivered over the previous two years to understand what the typical home is. Essentially, one has many homes now and, to use a broad categorisation, when one goes outside of urban areas, one finds that newer homes can be larger and in urban areas one can find homes that are smaller, albeit if one looks back through the housing statistics, one can see detached homes which are relatively small which need to be upgraded. Those types of homes are receiving higher than 80% funding because the 80% funding was set at the typical rate of homes. Larger performing homes do not get the 80% funding; it would be lower in the case of a significantly larger home than the 200 sq. m one. There are swings and roundabouts in delivering that and it would be very challenging to deliver a true 100% funded scheme given the different types and typologies of homes out there.

Deputy Darren O'Rourke

I thank Mr. O’Mahony for that answer. My final question is on the emissions reductions savings. That is what this is all about, as has been articulated by SEAI. Of the retrofits that have been carried out this year, particularly the ones to B2 level, has the SEAI an assessment of the emissions reductions savings that have been made on those? I believe that there will be 3,200 such homes in the warmer homes schemes, and I appreciate that they are not all B2 level homes. Does the SEAI have emissions reduction savings per scheme?

Dr. Ciaran Byrne

Yes, we do. I have the summary figure here for the moment and this figure for the year-to-date is 19.48 kilotonnes on the schemes. We have it broken down and we have a computer emission reduction calculation per scheme but that figure is the global total at the moment. I can get the Deputy figures per scheme also.

Deputy Darren O'Rourke

That would be helpful. On that point and in returning to earlier points, I note that there is not a scheme directly targeted at homes with solid fuel. Should there be one? We have had a conversation on turf and on the sector emission ceilings which specifically say that there should be a targeting of that cohort of people. Has the SEAI considered the quickest way to get the maximum amount of CO2 emissions reductions?

Dr. Ciaran Byrne

Yes, we have as we have many things. For fear of reiterating a point, we started in February and the job is like getting an aeroplane to take off, where we look at the various grant measures and the way in which we can bundle, package or incentivise those. We are relatively clear in that while we work very closely with our parent Department, we are all of the shared view that we are not going to have one scheme right out until 2030, but we will be targeting, just as Ms McCarthy has indicated earlier on, certain things in certain areas. Somebody, through our information and advice, who has a larger, detached, rural home which is run on oil could benefit. One starts then to pick the incentives apart. Effectively, we have to get towards market segmentation. We are talking about homeowners, which is not a homogenous group of people. We then start segmenting different schemes and incentives for different outcomes and groupings.

Deputy Darren O'Rourke

I thank Dr. Byrne and the Chairman.

Chairman

I thank the Deputy and call Deputy Ó Murchú now, please.

Deputy Ruairí Ó Murchú

On district or communal heating systems, dual location and geothermal may offer options which make complete sense and this can happen very fast. Has SEAI looked into in any way, shape or form at anything in that area? Poolbeg is obviously waste heat. I was in the regional development centre in Dundalk Institute of Technology, DkIT, and it looked at studies being done on excess heat that could be contained and moved via truck-type units. I was wondering what the viability was of such a scenario. Is SEAI aware of some of these ongoing research projects?

Ms Margie McCarthy

Are we talking about excess energy?

Deputy Ruairí Ó Murchú

Literally and I am almost thinking in cartoon terms of energy supplies. As presented to me, it was like heat waste, in the unit on the back of a truck and one could then move this and it would be significant. I nearly fell off the seat when I heard it and I need to find out more information, but I am hoping that SEAI have been engaged in this sort of conversation on this more than I have.

Ms Margie McCarthy

There is a range of choices there we could talk to. We will not get into energy production. Hydrogen production is an example, where you produce hydrogen by realising our resource and you move it effectively and store energy in that way. Similarly, this would be done - and I mention it a lot - even within the energy hub of a district heating site where you have thermal storage happening in the site. That can meet your heat requirement through the network when you have low, maybe very expensive, electricity and you are using heat pumps to provide your district heating. Instead you start using your thermal storage. This also allows for flexibility on the grid because you are not drawing down electricity at that specific time. If you have amber alerts or something like that, you have thermal storage instead. That is just one example.

Ms Kerrie Sheehan

Storage will be key to this.

Chairman

I am conscious of time and this is a conversation that could go on. I welcome the Deputy's interest and curiosity about the different solutions that might be out there but we are out of time. We are up to 2 o'clock so I will cut it there.

I thank our guests, especially those of you who have come in to Leinster House today to meet with us, but also to Mr. O'Mahony and Mr. Randles who joined us online. Their time was very much appreciated. It was a very thorough conversation and discussion. I think we went for three or four, or five rounds, even, of questions and that is very unusual for this committee. We appreciate all the information the guests have given us and look forward to having them back again as the various schemes develop. They will be keen I am sure, to report progress. I thank them all.

The joint committee adjourned at 2.14 p.m. until 12 noon on Wednesday, 12 October 2022.