Belfast Telegraph

RHI industry in Northern Ireland is now dead, inquiry told

Company director says trust has totally broken down after Stormont broke ‘cast iron guarantee’ by cutting RHI payments

By Allan Preston

A businessman has told a public inquiry that "renewable heat in Northern Ireland is dead".

Alan Hegan is director at Hegan Biomass Ltd in Dungannon, which has been installing biomass boilers since the early 2000s.

He told the RHI Inquiry yesterday of a complete breakdown of trust between the wider business community and the Stormont department responsible for the flawed green energy scheme.

Mr Hegan said the bad Press the scandal had generated had been hugely damaging to the renewables industry.

In cutting RHI payments, he also said Stormont had broken a "cast iron guarantee" that "shattered" the cash flow of businesses.

The fallout, he added, had caused at least one of his competitors to close their doors this week.

He also told the probe his company had all but collapsed, and may fold within nine months.

"It's totally shambolic, the industry is destroyed," he said.

"I see a negative campaign of attrition by the Department for the Economy (DfE) at the moment. In Northern Ireland we currently have a grant scheme to get an oil boiler, in Germany it's illegal to even install an oil boiler.

"That's really where we're at and, as long as that continues, I don't see there is a future for renewables in Northern Ireland."

Earlier in his evidence Mr Hegan said he believed RHI had been deliberately geared towards profit instead of energy efficiency. When the scheme opened in 2012 he expected a spike in demand for his larger and more energy efficient boilers, but this never happened.

He said it became much more lucrative to use multiple smaller boilers at 99kw or under.

Mr Hegan said this made the choice of a larger boiler economically unviable. Asked why it took so long for Deti, the department in charge at the time, to realise that tariffs were far too generous, he replied: "I believe they knew."

He said the motive was to encourage a rapid uptake of the new scheme but the high subsidies weren't reduced over time.

"I don't believe the scheme would have been what I or anyone in the industry would have designed," he added. Despite raising these concerns with Deti at the time he said that "nobody wanted to hear it, nobody cared".

The panel asked Mr Hegan if there was a "conspiracy of silence" between the department and energy industry, in that they knew the price of wood pellets was substantially less than the subsidy on offer.

Mr Hegan dismissed this, saying it was widely known. For a government scheme costing hundreds of millions, he said: "I'm astounded the department didn't know the cost of fuel. It's like saying: 'We don't know what price diesel or petrol is'.

"This was seen as a certified, upright government scheme.

"I was under the illusion there were people a lot more qualified and intelligent that had made these decisions. We were out there as a business to implement the policy."

Mr Hegan said plans in 2013 to reduce subsidies for smaller boilers were left to gather dust.

In his written evidence, he criticised the energy regulator Ofgem, which had been contracted by Deti to administer the RHI scheme here.

He said the majority of Ofgem energy officials were admin staff who "have never seen a biomass boiler".

Mr Hegan alleged Ofgem "suffered from DfE interference whilst processing applications in the NI scheme" and described audits as "a total mess".

He added: "When DfE pass them (audits) onto Ofgem it is clear they are providing incorrect information."

Belfast Telegraph

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