Maghaberry Prison switches from biomass to gas despite Stormont claim it is ‘irrational’

In a development which has potentially far-reaching ramifications, the News Letter can reveal that Maghaberry Prison has stopped using its wood pellet boiler because it says it is cheaper to heat the prison using gas.

That dramatically undermines what another set of Stormont officials – in the Department for the Economy (DfE) – have used as a central element of their justification for retrospectively slashing biomass subsidies far beneath what is being paid in GB and the Republic of Ireland.

The Renewable Heat Incentive (RHI) which had initially been set up on a disastrous ‘burn to earn’ basis which was more generous than GB was earlier this year dramatically cut to levels far beneath other regions.

Boiler owners who had been promised – not least in a cast-iron guarantee from the then energy minister Arlene Foster – that their payments could not be altered for 20 years argued that what the department was doing would in some cases leave them unable to repay their loans because they had built into their projections what Stormont told them was guaranteed RHI income.

When those changes were made in February, DfE’s most senior civil servant responsible for RHI, Richard Rodgers, told the media that “if they [boiler owners] use the fossil fuel [alternative] then it is more expensive for them so it would not be rational for them to do that.”

He told MPs on the Northern Ireland Affairs Committee that biomass was “the lowest cost fuel on the market”.

During the same evidence session, the department’s most senior official, permanent secretary Noel Lavery, said he had “no evidence” that anyone was reverting to fossil fuel. Boiler owners argued that this was incorrect, but DfE was insistent that they were wrong.

However, Stormont’s Department of Justice has confirmed that Maghaberry Prison installed a biomass boiler in 2011 – the year before RHI was introduced – but it is “not in operation at the moment as it is currently more cost effective to use natural gas”. The boiler was never part of the RHI scheme.

Other documentation obtained by the News Letter shows that the large 500kw boiler – five times the size of most RHI boilers and therefore likely to be more efficient – had been operating around the clock but that it was now “cheaper to burn gas”.

Civil servants’ repeated insistence that this would be nonsensical suggests that those running the scheme may still be making basic mistakes.

Moy Park’s farmers – hundreds of whom are on the scheme – have access to bulk-bought LPG through the poultry processor, but DfE officials insisted that even that cut-price gas would not be cheaper than biomass.

Andrew Trimble, executive chairman of the Renewable Heat Association which represents most RHI claimants, said: “In evidence to the NI Select Committee, DfE’s permanent secretary stated that the head of Energy Branch told him not less than five times a day that biomass is the cheaper fuel – the department even filmed him saying so, and broadcast this on Twitter.

“Biomass isn’t cheap and the capital and operating costs are much greater. We have sent Mr Lavery five copies of the Balcas announcement of price rises and we hope that he will have the good grace to confirm that his team may have miscalculated the rebate.”

In a statement, DfE said: “The tariffs set in the Northern Ireland (Regional Rates and Energy) Act 2019 were based not on assumptions but on actual data fed into independent expert analysis. However, DfE has always recognised that there are variable elements within the tariff calculations and is committed to keeping those variables under review.

“Should there be a significant and sustained change in the variable elements such as fuel prices, DfE will consider the revision of the tariffs to reflect these movements. DfE recently commissioned an independent energy consultancy to carry out a review and assess the current values of the variable elements of the medium biomass tariffs. The consultants’ final report is due with the Department before the end of 2019.

“Kerosene, as the predominant heating fuel used in Northern Ireland, is the counterfactual fuel used in calculating the NI RHI tariffs. Recent data has shown that biomass fuel prices remain lower than kerosene.

“The use of LPG and in particular discounted LPG available only to contracted Moy Park farmers, was rejected by the independent experts that provided the advice leading to the 2019 tariffs.

“The biomass boiler installed at Maghaberry prison was not accredited to the NI RHI Scheme and has therefore never received tariff payments. DfE understands Maghaberry now makes use of natural gas for heat, not liquefied petroleum gas (LPG).

“These are different products with different price points. Natural gas prices have been persistently lower than LPG prices. In relation to the NI Non-Domestic RHI Scheme, the vast majority of participants do not have access to the natural gas network.”