A policy to install hundreds of thousands of electrically-powered heat pumps in homes across Ireland could increase power costs by up to 46pc, a research paper has found.
As part of the Climate Action Plan 2021, the Government plans to replace oil and solid-fuel boilers with heat pumps powered by renewable electricity, with the aim of installing 400,000 heat pumps in existing buildings by 2030.
The Government also aims to retrofit around 500,000 buildings with insulation to a B2-equivalent rating by 2030.
An Economic and Social Research Institute paper titled Decarbonising heat through electricity: costs, benefits and trade-offs for the Irish power system, examined potential scenarios around this policy.
The paper analysed the affects of electrifying 20pc and 30pc of Irish residential heating demand under different policy scenarios.
The results, published in the academic journal Energy Policy, showed the cost associated with retrofitting dwellings to the B2 BER-rating needed to support a heat pump was “by far” the greatest cost driver.
The study found the heat pump policy increased power system costs by 30pc if 20pc of heating is electrified, and by 46pc if 30pc of heating is electrified.
Senior research officer and co-author of the paper Dr Muireann Lynch said the high cost of retrofitting “highlights the challenges associated with decarbonising residential heating”.
“Our current decarbonisation of heating policy relies on retrofitting and heat pumps and renewable electricity, and it’s worth considering some contingency plans if all of those don’t necessarily come to fruition.”
The high cost of retrofitting and installing heat pumps compares to the relatively low increase in electricity generation. The study found the costs of electricity generation investment – such as building battery storage as well as wind, solar and fossil fuel power plants – increased by 2.5pc and 5pc respectively.
The cost of transmission – such as wires to transport electricity – decreased slightly, by 1.5pc and 1pc respectively.
“What that might suggest is that if you increase electricity demand through electrifying the heating sector, then what’s happening there is we’re actually getting heat dispersed throughout the whole system,” Dr Lynch said.
“And that might mean you’re better able to balance supply and demand at a local level.”
The ESRI study also found when the geographical location of heat pump investment was chosen so it imposed the lowest cost on the power system, there was a small reduction in costs relative to a policy that saw heat pump investment at an even rate across the country.
The location of heat pumps was driven by the location of the heat demand, with large investments in heat pumps in the Dublin region.