The Minister for Climate, Energy and the Environment, Darragh O’Brien, announced on 30 September 2026 funding of €5 million from the Climate Action Fund for nine district heating projects at the Irish District Energy Association Annual Conference.
The public and private projects span seven counties. They are part of a district heating pilot scheme being delivered by the Sustainable Energy Authority of Ireland (SEAI) and the Department of Climate, Energy and the Environment (DCEE).
Funding Allocation and Government Support
The €5 million support package for the pre-construction costs is being used as a pilot fund to bridge the funding gap for district heating projects until significant capital funding is in place, and to ensure that district heating projects can avail of this future funding. This funding is in addition to the €50 million already allocated to support district heating infrastructure through the Department’s Sectoral Capital Plan.
The support package sits within the Infrastructure, Climate and Nature Fund (ICNF) established as part of Budget 2025 to manage windfall tax receipts and fund the climate transition by supporting designated projects from 2026 to 2030. A €500 million allocation for DCEE under the ICNF in the revised National Development Plan for 2026-2030 focuses on developing new markets to accelerate decarbonisation and diversification of Ireland’s energy sector. The Government has also supported funding for the now-operational Tallaght District Heating Project, developed by South Dublin County Council and the Dublin District Heating Project led by Dublin City Council.
It is considered that investments in early-phase infrastructure/construction for a National District Heating Market before 2030 will deliver key backbone elements, focusing first on larger anchor customers in the short term, and smaller heat loads in the medium-to-longer term.
SEAI’s Role
SEAI’s District Heating Centre of Excellence and the Department have worked to establish and implement this pilot programme. SEAI considers that this will create a pipeline of projects that could potentially heat a combined equivalent of over 25,000 homes when constructed.
District heating uses a centralised heat source to deliver thermal energy in the form of hot water through a network of highly insulated pipelines to heat multiple buildings and customers across a wide geographical area, such as across an entire village, town, or city, or for large energy users such as large industrial facilities, pharmaceutical companies or data centres.
Eligibility and location of pilot projects
Projects must be an efficient heating and cooling network and use at least 75% from renewable energy, 75% from waste heat, or 75% of a combination of both to supply heat to the network. The target audience for the Fund is public and private sector project sponsors looking to develop efficient district heating projects in Ireland who meet this eligibility criteria, and who are legal entities.
Following a competitive process, the following pilot projects have been selected for provisional support, subject to final verifications and clarifications, representing different locations, scales and delivery models.
| Location | Project Sponsor |
|---|---|
| Blanchardstown | Fingal County Council |
| Castletroy | Heatgrid Ireland |
| Drogheda | Louth County Council |
| Dundalk | Louth County Council |
| Galway | Heatgrid Ireland |
| Leixlip | Yuno Energy Heat |
| Monaghan | Monaghan County Council |
| Naas | Kildare County Council |
| Portlaoise | Heatgrid Ireland |
Legislative Backdrop
This investment at the pre-construction stage demonstrates the Government’s continuing commitment to district heating as a key element of Ireland’s decarbonisation pathway. It will also help build the knowledge, skills, and supply chain needed to develop a district heating sector. It sits within the overall evolving legislative framework. District heating is not currently regulated in Ireland, except for the assignment of functions under the European Union (Renewable Energy) Regulations 2022. The Climate Action Plans have also provided a wide range of policies and actions to tackle decarbonisation and climate change across Irish society, including specific measures directly related to district heating.
In early November 2024, the Government published the General Scheme of the Heat (Networks and Miscellaneous Provisions) Bill 2024 (Bill) to support the nationwide roll-out of district heating. The Bill seeks to address economic regulation, national oversight, infrastructure strategy, and consumer protection for the sector. The Bill is is yet to be enacted but has been identified for priority drafting in the Government’s Autumn 2026 legislative programme. See our article: Heating up Ireland: New bill prepares route map for district heating.
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