Electricity costs could rise by 46 percent if homes across the country get heat pumps


A directive to install hundreds of thousands of electrically-powered heat pumps in homes across Ireland could increase electricity bills by up to 46 percent, research says.

As part of the 2021 Climate Action Plan, the government plans to replace oil and solid fuel boilers with heat pumps powered by renewable electricity, with a goal of installing 400,000 heat pumps in existing buildings by 2030.

The government is also aiming to retrofit around 500,000 buildings with insulation to a B2 equivalent rating by 2030.

A paper by the Economic and Social Research Institute entitled “Decarbonising Heat through Electricity: Costs, Benefits and Trade-offs for the Irish Power System” examined possible scenarios surrounding this policy.

The paper analyzed the impact of electrifying 20 per cent and 30 per cent of Ireland’s residential heat demand in different policy scenarios.

The results published in the journal energy policyshowed that the costs associated with upgrading homes to the B2 BER rating required to support a heat pump were “by far” the biggest cost driver.

The study found that the heat pump policy increased electricity system costs by 30 percent when 20 percent of the heating was electrified and by 46 percent when 30 percent of the heating was electrified.

dr Muireann Lynch, senior research officer and co-author of the paper, said the high cost of retrofitting “highlights the challenges associated with decarbonizing residential heating.”

“Our current heating decarbonization policy relies on retrofitting, heat pumps and renewable electricity, and it’s worth considering some contingency plans if all of these don’t necessarily come to fruition.”

The high cost of retrofitting and installing heat pumps is offset by a relatively small increase in electricity generation. The study found that the cost of investments in power generation — such as building battery storage, wind, solar and fossil-fuel power plants — increased by 2.5 percent and 5 percent, respectively.

Transmission costs – such as cables used to transport electricity – fell slightly by 1.5 percent and 1 percent, respectively.

“This could suggest that if you increase electricity demand by electrifying the heating sector, the heat will actually be distributed throughout the system,” said Dr. Lynch.

“And that could mean you can better balance supply and demand at a local level.”

The ESRI study also found that when the geographic location of the heat pump investment was chosen to impose the lowest cost on the electricity system, the cost was marginally reduced compared to a policy that placed heat pump investments evenly across the country.

The location of heat pumps has been determined by the location of heat demand, with large investments in heat pumps in the Dublin area. Electricity costs could rise by 46 percent if homes across the country get heat pumps

Fry Electronics Team

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