Green energy body had twice warned of flaws

Posted By: December 31, 2016

Andrew Madden. Irish News. Belfast. Saturday, December 31, 2016

A LEADING green energy consortium strenuously warned officials about potential abuses of the botched Renewable Heat Initiative (RHI) scheme on two occasions.

Biomass Energy Northern Ireland (BENI), a consortium made up of leading renewable energy companies, responded to two separate consultations by the Department of Enterprise, Trade and Investment (Deti) expressing concerns.

On Thursday, The Irish News revealed that 13 companies (BENI included) warned of  “over-incentivization” in the scheme in 2011, more than a year before it was launched.

These flaws, primarily surrounding pricing issues and a lack of cost controls, ultimately led to a massive overspend which has left the north-facing a £490 million public spending deficit over the next 20 years.

However, a further consultation was held in July 2013, by which time the initiative had been operating for nearly a year, which proposed expanding the scheme and raising tariffs even higher than they had been before.

On both occasions, BENI expressed concerns that higher tariff levels for smaller boilers, which paid nearly four times more their larger counterparts, simply meant people would run several of the smaller units in order to generate more money.

Units in the 45-kilowatt tariff band paid 6.1p per kilowatt of heat they produced every hour, while the 100kW and above band paid 1.5p per hour. In the British version of the scheme, there was only one tariff band – 200kw – thus preventing similar abuses.

In 2011, BENI responded to the first Deti consultation making these concerns clear.

“The 45kW level is low enough to encourage multiple installations and multiple “systems” within one building/campus just to “harvest” the higher RHI payment,” they wrote.

“For all these reasons we believe the 200kw threshold as adopted in GB is more appropriate and will lead to much less distortion of best practice and the increased adoption of appropriate renewable technology.”

These warnings were not acted upon and when the second consultation came about two years later, BENI highlighted this point for the second time.

“We would again bring to your attention the unfortunate consequences of the 100kW threshold used in the Phase 1 Commercial RHI scheme,” they said.

“What we warned about during the initial consultation is now very apparent on the ground, with the large difference between (the two tariffs) leading to a plethora of multiple but separate systems and a demand to undersize boilers; just to stay within the higher tariff rate.”

Furthermore, the rate of “district heating” – those systems running in connected buildings – was increased by nearly 15 percent.

It is estimated that a third of all non-domestic RHI claimants fell into this category.

Arlene Foster has faced a barrage of criticism for the handling of the scheme in recent weeks.

However, the first minister has refused to heed calls for her to step aside while an inquiry takes place, as other Stormont parties have urged her to do.