Belfast Telegraph

No risk assessment carried out into RHI scheme, inquiry hears

Dermot Nolan
Dermot Nolan
Allan Preston

By Allan Preston

The regulator who ran the Renewable Heat Incentive never carried out a risk assessment, a public inquiry heard.

Dermot Nolan is the head of the energy regulator Ofgem who administered RHI on behalf of the Department for Enterprise (Deti).

In his second appearance before the inquiry, he said Ofgem never carried out a risk assessment before the flawed green energy scheme opened in Northern Ireland in late 2012.

Panel member Dr Keith MacLean said trying to save money this way was a "false economy".

Mr Nolan said they could only work within their budget but admitted they never told Deti they needed more money for a risk assessment.

Inquiry chair Sir Patrick Coghlin added that Deti should have known the consequences of failing to provide a proper budget.

In the summer of 2012, Ofgem officials had circulated emails warning of how the RHI scheme could be abused by burning excessive fuel and that cost controls would be needed.

Mr Nolan said the warning should have been officially passed on to Deti, but said Stormont officials had been given a sense of the risk.

The problem, he said, was that "they were determined to go ahead come what may".

Sir Patrick agreed, saying Deti officials were focused on delivery over cost controls.

Mr Nolan said Ofgem and Deti failed to work properly together to stop claimants exploiting loopholes. This had meant some were able to burn heat around the clock just to get more RHI subsidies.

Sir Patrick said that although the rules were clear that claimants should not burn heat just to make money, he didn't see any evidence that Ofgem was monitoring the behaviour of beneficiaries.

The abuse that followed included 'gaming,' where applicants would install multiple smaller  99kw boilers instead of a larger and more efficient boiler.

Sir Patrick said Ofgem should have seen these "clearly obvious examples".

Inquiry counsel Jospeh Aiken said nearly three-quarters of applicants wanted to install multiple small boilers.

This did not mean all users were exploiting the scheme.

An external consultancy firm compiled the figures last year and said the top 10% of claimants collected 42% of the total subsidies paid up until February 2017.

A total of 2,128 boilers were registered on RHI, of them 97% were in the most lucrative category and many had multiple boilers.

Mr Aiken said this added a significant cost to RHI and would have shocked Deti.

They didn't know because Ofgem, being independent from government, didn't share the details of all the beneficiaries and their registered heating systems.

Mr Nolan accepted Ofgem failed to grasp the significance of many claimants taking on multiple boilers.

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