RHI wipes £2m off 2018 block grant, but cap sees use of boilers nose-dive
An Audit Office report has found that the Renewable Heat Incentive (RHI) scheme cost £2m from Northern Ireland's Westminster block grant this year.
The report, which is published today, shows that the reduced tariffs and the cap on heat output has led to a significant fall in boiler use.
It suggests that the ending of higher subsidy rates meant there was no longer an incentive for applicants to generate heat.
The Ulster Unionists described the report as "damning if not entirely unexpected".
South Antrim MLA Steve Aiken said: "It confirms once and for all that the original RHI scheme not only incentivised the burning of material, but unquestionably resulted in the generation of additional and unnecessary heat.
"Many people will be shocked that in the space of only a year the amount of heat being generated has plunged by a third.
"It is perverse that a Government-promoted and subsidised scheme, which was meant to act as a policy instrument to increase uptake in renewable energy, actually saw the generation of so much superfluous heat. Instead of a green scheme, it was disastrous for our environment."
Mr Aiken also expressed deep concern at the findings so far from the Department for the Economy's new inspection process, which has involved 33 sites and 65 installations.
"It is incredible that not a single one of these installations were deemed to be good - instead nearly 90% have been found to be either weak or unsatisfactory when measured against the scheme regulations and guidance," he said.
"The fact that Ofgem also carried out audits on a further 30 installations and identified issues in 24 of them shows systemic flaws with the installations and how the scheme has been operating to date."
Mr Aiken said problems with the scheme could have been identified and rectified early on.
"The ongoing RHI Inquiry has already exposed fundamental failures at the heart of government and identified matters of grave public concern regarding the activities of individuals at the centre of the RHI scheme.
"I suspect there will be much more to come in the autumn."
Responding to the report, Sinn Fein MLA Mairtin O Muilleoir said: "Last year the DUP Economy Minister belatedly introduced temporary cost controls on the controversial RHI scheme.
"This Audit Office report confirms that RHI remains a drain on the block grant, costing £2m this year. Of course, there are also the costs to the public purse arising from the inquiry which had to be set out to get to the truth of this scandal.
"This report points out that although inspection of all RHI sites was an essential cost control measure, it will be three years before all sites are inspected. Proposals on how to properly deal with the mess created by the RHI scheme are now out for consultation."
The report by Comptroller and Auditor General Kieran Donnelly found that the new tiered rate from last April had reduced the total cost of the RHI scheme from £45m in 2016-17 to £24m this year.
The cost to the Northern Ireland block grant fell from £27m last year to £2m this year.
The report noted: "The change in tariffs appears to have been the main reason for a substantial change in the overall heat generated under non-domestic RHI.
"The total heat generated has fallen by over 33% in 2017-18 compared to the previous year. This reduction is particularly marked in the forestry/wood sector which would typically have been engaged in generating heat for wood drying."
The report stated that the behaviour of applicants appears to have "changed significantly" following the introduction of the new tiered rate and cap on heat output from April 2017.
It noted: "This may have been because applicants were no longer able to avail of the higher subsidy rates and as a result there was no longer any incentive to generate heat if this was only being done in order to claim additional subsidies."
Mr Donnelly expressed concern "at the slow rate of progress" made by the Department for the Economy in inspecting all sites.
But he added: "I acknowledge that there is an intention to inspect all sites within the next three years.
"It is important that these inspections progress at a faster pace and where problems are found proper enforcement is carried out."