Belfast Telegraph

RHI boiler owners 'getting a raw deal' on scheme costings

Simon Hoare MP chairs the NI Affairs Committee
Simon Hoare MP chairs the NI Affairs Committee

By David Young

The chairman of Westminster's influential Northern Ireland Affairs Committee yesterday criticised Stormont officials over their handling of the controversial Renewable Heat Incentive (RHI) scheme.

Simon Hoare MP said the Department for the Economy had "missed an opportunity" to remove some of the unfairness in the scheme - and called for senior officials there to bring it into line with a parallel scheme in Great Britain.

While recognising that the department had made some welcome progress on reforming the structure of RHI payments, the Conservative MP said his committee's central recommendation - that the wider investment decisions taken by boiler owners should be accounted for in the revised payments - had not been accepted by the department.

Earlier this year, the NI Affairs Committee said some participants in Stormont's botched Renewable Heat Incentive stood to lose hundreds of thousands of pounds in subsidies that will be paid to those using a similar green energy scheme in Great Britain.

In the absence of power-sharing at Stormont, then Northern Ireland secretary Karen Bradley fast-tracked legislation through Westminster in one day in March to significantly reduce the subsidies paid to RHI boiler owners in the region.

But in a statement released yesterday, the committee said that in comparison with a similar scheme in Great Britain, the repayment rate for the scheme here is based on unrealistically low costing, resulting in unfair payments for participants.

It added that the department's reluctance to give financial recognition to the investment decisions of RHI participants was a "missed opportunity".

"It is not enough to offer participants an acceptable way to get out of the scheme that takes into account indirect costs; these costs must be built in to the payments offered by the scheme to make it comparable to the counterpart scheme in Great Britain," Mr Hoare said.

"RHI participants in Northern Ireland are getting a raw deal from this scheme and I will write to the Permanent Secretary to press the department for action to rectify this."

The bungled RHI scheme is the subject of a public inquiry led by Sir Patrick Coghlan. He is due to produce his report later this year.

RHI was intended to incentivise farmers and other business owners to switch to wood pellet-burning boilers by offering them a subsidy to purchase the fuel. Catastrophic errors at government level meant subsidy levels were set higher than it actually cost to buy the pellets, so applicants were effectively able to make a profit on public money by burning boilers.

A spokesperson for the Department for the Economy said that they "welcome the Northern Ireland Affairs Committee’s recognition of the positive progress that has been made in the Department’s response to the Committee’s report, including the Department’s commitment to a further independent tariff review". 

"This review will consider the assumptions underpinning similar schemes in Great Britain and the Republic of Ireland and how they relate to the tariffs in NI," the spokesperson said.

"As stated in the Department’s response to the Committee’s report, the tariffs are limited to bridging the gap between the cost of generation of heat from renewable sources and the fossil fuel alternative, while delivering the approved internal rate of return. 

"Wider investment decisions made by participants outside of the specified costs are therefore beyond the bounds of the tariffs. 

"The allowable costs on the NI Non-Domestic RHI are similar to those allowable in GB, as clearly indicated in the respective guidance for the schemes. The Department will continue to engage constructively with the Committee on these issues.”

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