Demand for electric heating, driven by an increased use of heat pumps, will see generation costs rise by as much as 46%, a new study by the ESRI has found.

As part of the Government's Climate Action Plan, there is a commitment to install 600,000 heat pumps in homes by 2030, to help offset energy-related CO2 emissions.

Demand for heat in Ireland makes up around 40% of energy usage, with residential home heating accounting for 25% of energy-related CO2 emissions.

The study from the Economic and Social Research Institute has for the first time examined what the likely impact of this increased electrification on our heating systems will mean.

Muireann Lynch, Senior Research Officer with the ESRI and co-author of the paper, said there are many costs associated with installing heat pumps in homes.

Speaking on RTÉ's Morning Ireland, she said: "You also have to factor in the cost of doing the retrofit in the home and that's also pretty high.

"For most households that would be prohibitive and that is why you can get grants from the Sustainable Energy Authority of Ireland, but that doesn’t cover the whole cost."

Air source heat pumps can cost between €12,000 and €18,000.

"It's certainly not cheap but it might still be the cheapest. Heat is very difficult to decarbonise. The alternatives for decarbonising heat would rely on technology such as biomethane.

"This is where we don't retrofit our houses, we continue to burn gas in our boilers, but that gas comes from biological sources and therefore doesn't have a net increase in emissions associated with it," Dr Lynch added.

"One of the main things about a heat pump is the heat is what we call low grade. In order for a heat pump to get your house to a comfortable temperature your house has to be of a good energy efficiency standard.

"That’s why retrofitting houses to a B2 BER rating is part of the policy that we considered here. It’s not enough to stick a heat pump onto an existing house.

"What we found was there was an increase in electricity generation technology required. We didn't actually see an increase in the transmission investment required, but the largest component of the cost of this policy, by far, was the cost of retrofitting the houses up to a B2 BER level and the cost of installing the heat pumps themselves," Dr Lynch explained.