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Firms face ruin after Stormont scraps energy initiative

By Yvette Shapiro

Published 10/02/2016

Poultry farmers are among those who may be affected after the RHI scheme was scrapped
Poultry farmers are among those who may be affected after the RHI scheme was scrapped
Patsy McGlone
Andrew McCormick, DETI chief

Enterprise Minister Jonathan Bell and his departmental officials have been accused of "incompetence on a huge scale" after a £30m overspend on a green energy scheme.

Mr Bell came under fire from companies, farmers and MLAs for suddenly pulling the plug on the Renewable Heat Incentive (RHI) scheme, which supported the installation of biomass energy systems in homes, farms, public buildings and businesses.

Engineering firms that manufacture and install the equipment claim they will lose millions of pounds, and that up to 2,000 jobs could go, while the Ulster Farmers' Union said that up to 50 poultry farmers could be left out of pocket with unfinished heating schemes that are now too late to qualify for funding.

In a potentially explosive revelation, the senior civil servant at the Department of Enterprise, Trade and Investment (DETI) told MLAs that the Office of the First Minister and Deputy First Minister had received "whistleblower allegations" which are now the subject of a full investigation.

Permanent secretary Dr Andrew McCormick told yesterday's meeting of the enterprise committee: "We have to be wary in case there's any risk of abuse, so we are seeking to make sure that there's adequate, appropriate and proportionate investigations to make sure that people are doing what they say they are doing and that there's not a breach of the obligations of the scheme."

Dr McCormick added that the UK-wide energy regulator Ofgem had been informed of the allegations along with DETI and an "independent body" would be carrying out around 200 audits.

Sinn Fein's Mairtin O Muilleoir challenged the DETI officials on the allegations. "There's a suggestion that some of these applications are not valid and that there's underhand activity," the South Belfast MLA said.

"I consider that a smear. I'm talking about hard-working family firms who are making these applications."

Dr McCormick replied: "The vast majority are honourable. There's no evidence at this point to back those allegations up."

The RHI scheme had received a total of 3,600 applications, split evenly between domestic and non-domestic installations, mainly for biomass pellet burners. The DETI officials revealed that the Enterprise Minister had been briefed as far back as last July that funding for the programme was under pressure and changes were made to the tariffs in November.

Committee chairman Patsy McGlone of the SDLP said many companies had embarked on biomass installations, taking bank loans for which they were now liable.

"Who will offset that debt?" he asked. "They acted in good faith that tariffs would be available until March 31. Now they've been walloped. Who picks up the tab for that? It's not their fault."

Dr McCormick confirmed there were currently no plans in place for a compensation scheme for affected companies.

He also revealed that last autumn, the scheme had received approximately 900 applications in a six-week period.

"There was a spectacular surge in demand where it proved necessary to move in the way the minister has," he said.

"There's a very significant financial risk which has come to pass and we now face a spending problem affecting the budget for 2017. It's an over-riding issue of finance."

Ulster Unionist Adrian Cochrane-Watson said: "It's incompetence on a huge scale. Is DETI going to brush this under the carpet, £30m? It will cause job losses. (This is) a department that is charged with creating jobs and stimulating investment."

Several companies involved in renewable heat projects attended the committee. Jamie Byrne of AJP Renewables in Newry said his company was facing collapse. "We knew the funding wouldn't be for ever, but by stopping it abruptly like this they have pulled down the shutters and cut our hands off," he said.

"Potentially, this could put us to the wall, along with other companies.

"We have 40 biomass boilers on order. The cost could amount to £200,000. We have jobs started that won't now go ahead and customers who won't want to pay. There's so much uncertainty."

Questioned in the Assembly yesterday, the Enterprise Minister Mr Bell said: "I'll examine ways in which I can help those who have been affected by my decision last week."

Belfast Telegraph

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