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The future of energy-efficiency support in Ireland

Ross O'Dwyer Naturgy

Ross O'Dwyer

Energy Efficiency Executive
18/08/2020
Energy efficiency Obligation Schemes

Background

The Irish Government launched the Energy Efficiency Obligation Scheme (EEOS) in 2014 to help meet European energy-reduction targets. The scheme requires large energy suppliers, such as Naturgy Ireland, to support energy-efficiency projects in homes and businesses across the country. This support has consisted mostly of financial contributions and the provision of engineering resources to measure and verify energy savings.

 The current scheme terminates at the end of 2020. The government, however, is legally required to transpose the European Commission’s amended 2018 Energy Efficiency Directive (EED), which requires further energy savings through the period 2021-2030. The Department of Communications, Climate Action and the Environment (DCCAE) issued a high-level decision paper in June 2019 indicating that a new Energy Efficiency Obligation Scheme would come into effect in January 2021. The new scheme is anticipated to bring important changes for Irish energy users.

Obligation Schemes, Old and New

The main change expected in the new scheme is a different method of measuring energy savings. To understand this, it is important to distinguish between two ways of expressing energy consumption: Final Energy (FE) and Primary Energy Equivalent (PEE).

Consider the example of using one kilowatt-hour (kWh) of electricity to power an electric heater. This represents one-kilowatt hour of Final Energy consumption. However, there are inherent inefficiencies in the generation, transmission, and distribution of electricity. This means that more than one kilowatt-hour was required upstream, to provide the single kilowatt-hour of electricity to its end-user. The Sustainable Energy Authority of Ireland (SEAI) uses a PEE conversion factor of 2.5 in the current scheme. This has meant that every kilowatt-hour of electricity saved corresponds to a Primary Energy saving of 2.5 kWh (equivalent to 2.5 “energy credits”).

On the other hand, using one kilowatt-hour of gas in your boiler is almost the same whether measured in Final or Primary Energy: one kilowatt hour. This is because all of the Primary Energy in the gas is converted to heat onsite, unlike the example of the electric heater.

In the new scheme, savings will be measured in Final Energy, rather than Primary Energy Equivalent.

What does this mean for Large Energy Users?

The switch to Final Energy could mean less support for projects involving electrical savings. LED lighting upgrades have contributed greatly to the current scheme’s success, but these may be phased out eventually in the new scheme. Even if allowed, lighting projects will no longer enjoy the current Primary Energy multiplier, so they will be smaller in value.

Thermal energy savings, such as those from boiler upgrades, will be of the same value when measured in Final Energy. Therefore, support for these projects can be expected to continue. Some projects aimed at electrification of a thermal load, e.g. replacing a boiler with a heat pump, will qualify for larger grants under the new scheme.

Naturgy is continuing to support energy-efficiency improvements under the current scheme until the end of 2020. If you would like more information on energy-efficiency support, please contact your account manager, or Naturgy’s Head of Energy Services, Ciaran Gahan (ciaran.gahan@naturgy.ie).

Naturgy’s full range of Energy-Efficiency services is displayed on our website:

https://naturgy.ie/products-and-services/energy-efficiency/   

Further information on the current scheme can be found on the SEAI’s website:

https://www.seai.ie/business-and-public-sector/business-grants-and-supports/energy-efficiency-obligation-scheme/