As winter and cooler temperatures arrive, gas-fired central heating systems around the country are being cranked up after their summer break. Householders take gas central heating for granted, and it’s the only indigenous fossil fuel energy source that Ireland has.

It wasn’t always that way. Not so long ago, central heating depended on heating oil, but then gas entered the heating mainstream when it started to flow from under the seabed off Kinsale.

That resource is depleted and now the indigenous gas source is the Corrib field off Mayo. To meet demand, gas is imported too, though if the government has its way later this century, children will be reading about domestic gas central heating in history books.

To cut Ireland’s carbon emissions, government has decreed that gas-fired boilers will be banned for new homes after 2025. Oil boilers in new builds are set for the chop from 2022. In their place, householders will have rely for heat on either electricity or heat pumps, which extract heat from ambient air within the dwelling. For these to work, the structure has be very well insulated and ventilated.

As a result of the Climate Action Plan, Bord Gáis Energy, which has 45% share of the domestic gas market, may find it tougher to grow its business in Ireland in a decade’s time. In the meantime though, the business is doing well, growing turnover in 2018 to €1,020m from €930m the year before. Besides supplying gas to domestic and business customers, BGE is also an electricity supplier and owns the Whitegate generating plant in Cork.

In Association with

Bord Gáis Energy is owned by UK energy giant Centrica plc, which bought the business in 2014. Managing director Catherine O’Kelly took charge of the Irish business in September 2018. A PPE graduate from Oxford, O’Kelly joined Centrica in 2011 and was in charge of the British Gas smart metering programme before assuming her current role.

Competitive Market

BGE is a minnow in the Centrica scheme of things: 350 staff out of a group total of 31,780. However, O’Kelly learned quickly that small markets can be just as challenging as large ones. “It's a very competitive retail energy market out there,” she says. “Ireland has among the highest rates of switching in Europe and customers are ever more demanding of us. They are asking for an excellent customer experience and they want to be rewarded for loyalty.

“Our business strategy is to broaden and deepen our relationships with customers in their homes and in their businesses with an expanding set of relevant offers, products and services. What we are trying to create is a market where our customers choose to stay with us.

"When I say 'broaden our relationship', what I mean is that customers aren’t just seeing us as the provider of an energy commodity. They are also with us because we're providing a boiler servicing offer or connected home products such as Hive.”

With the Hive system, people can control their home heating from their mobile phone. “Then the conversation with a customer can move quite quickly to: 'Now I've got used to having this level of control with my heating, what can you offer me for other energy consuming products, like connected light bulbs?'” O’Kelly adds.

In O’Kelly’s view, the government’s measures surrounding home heating are being driven from the bottom up. “There's a huge appetite among customers to do something about sustainability, but they don't know where to start,” she says. “When we put in front of our customers an offer that involves Hive active heating or Hive connected light bulb, they pick that up.”

O’Kelly adds that business customers are also demanding more control over their energy usage. With the Centrica connection, Bord Gáis Energy is assisting customers such as Croke Park stadium to install energy sensors.

“These sensors help you to monitor your energy estate, and for big energy users that's going to give them valuable insights. For example, putting sensors on your energy consuming equipment can show you that water pumps have been running more than you anticipated, maybe wasting water as well as the associated energy.”

For BGE and O’Kelly, digital products like Hive result in more customer interaction. “They see it as part of helping them to run their home. Allied to our Rewards Club loyalty programme, the result is we have among the lowest rate of churn in the industry. We would like to keep it like that and see it improving.”

Whatever happens with domestic gas-fired boilers, O’Kelly believes that gas has a role to play as part of the transition to a low-carbon economy. “You have renewables coming onto the power system, but by their nature wind and solar are intermittent,” she says.

“To balance the system, you need an efficient and effective energy source. In the longer term, that would be gas, complemented by carbon capture and storage technology. The resilience that's offered by having gas to manage the intermittency will be critical.”

O’Kelly adds: “There is a cost to be incurred in moving the system to achieve the energy balance the government wants. I think it's really important that there is an honest and open debate about how Ireland should go about doing it. That includes being transparent about what people call the energy trilemma: balancing sustainability with affordability and security.

"Given the technologies and the natural resources available, there needs to be a conversation about the most suitable transition path.”

Photo: Bord Gáis Energy MD Catherine O'Kelly