RHI inquiry: More lucrative tariff was proposed, even as scheme was imploding

And the Department of Enterprise, Trade and Investment (DETI) was also considering a second change which would have made RHI more financially attractive to claimants, the public inquiry into the cash for ash scandal has heard.

The details add to the picture of ignorance within at least parts of DETI as it sleep-walked into a disastrous run on the scheme in the summer and autumn of 2015.

Sir Patrick Coghlin’s inquiry was yesterday told that in February 2015 Stuart Wightman, the head of the renewable heat branch in Arlene Foster’s then department, met with David Mark, a senior figure in Northern Ireland’s dominant poultry processor, Moy Park, to discuss its plans to use RHI to help it expand its business.

Mr Wightman – whose subordinate Seamus Hughes was yesterday giving evidence – emailed Mr Hughes on February 24 2015 to inform him about the discussion, telling him that he had outlined “our plans to increase the maximum boiler size for 6.3p biomass tariff from 99kwh to 199kwh like GB, which he welcomed”.

He went on: “I asked him how many broiler houses would be coming forward for the RHI in the coming months. He confirmed there could be up to 200 coming forward in 2015, each with 99kwh boilers.”

Mr Wightman then did a rough calculation and guessed that the Moy Park expansion alone – even if no one else joined the scheme – would require an additional £4.4 million per year in RHI funding. At that point, there was a misapprehension within at least parts of DETI that the Treasury would pay the bill, regardless of an overspend.

The inquiry, which has compelled the release of Moy Park documentation, has obtained an email from Mr Mark to colleagues just after his meeting with the civil servant. In it, he said there were no plans to change the scheme until October 2015 and that he thought the boiler size for the lucrative tariff would increase from 99kwh to 199kwh, which would be “helpful”.

He also told them that a new category of ‘district heating’ would be introduced “with large boilers supporting a number of units” and involving an “uplift” of payment.

The proposal for a 7p tariff for district heating systems – far above the 1.5p rate for other large boilers – was explained in a 2013 consultation document put out by DETI, which justified the more generous rate on the basis of increased costs with such a system, including additional pipework and loss of heat from those pipes.

When asked yesterday why there was a plan to pay more for this category, Mr Hughes said DETI wanted to encourage larger boilers, so that rather than multiple 99kwh boilers being installed, a single installation could cover an entire site, “be it for housing ... or commercial premises”.

Dr Keith MacLean, the inquiry’s technical assessor, asked: “What problem was that solving?”. Mr Hughes said: “Well, it was solving your multiple boiler issue – I mean, you weren’t going to have four or five boilers heating, you know, individual [sites]; you were going to have one big boiler heating, potentially, a number of [sites] and leading obviously to a more efficient system.”

Dr MacLean said: “It’s quite accommodating – it’s giving people a more efficient system, they only need to make one application to Ofgem and they’re going to get more money.”

A second proposal would have seen what was at that point the most lucrative tariff extended to far bigger boilers. That would be in line with the situation in GB. However, critically, the plan was not to extend GB’s cost controls, meaning that the situation would have been far more financially beneficial in Northern Ireland.