Speaking about the failure of DfE to appoint a contractor to inspect 100% of Renewable Heat Incentive (RHI) scheme boilers and the NIAO Report, a spokesman for the Renewable Heat Association NI (RHANI) said;
“The Association is disappointed that DfE has been unable to engage with any contractor to perform a comprehensive audit of all RHI Accredited installations as this was identified by the Public Accounts Committee and NIAO as a critical component of the DfE get well process. We have sought an urgent meeting with the PUS, and DfE and insist that all installations are audited in order that the public can have the assurance that the Scheme participants have acted appropriately.
We can only assume that timing of the release of the DfE press release and the NIAO report and that the Department is unable to follow NIAO direction to establish and then maintain an effective audit process, to be entirely coincidental.
It is worth pointing out some important details;
DETI/DfE established a scheme designed to encourage just under 30,000 users to change practice, to abandon burning oil and to adopt renewable energy. Because of planning and forecasting failures within DETI/DfE, the Scheme collapsed when it had just 2,148 accredited systems. The use of renewable energy and adoption of RHI by legitimate business should not have been sullied by financial mismanagement by civil servants in several departments.
The two most popular sizes of boilers in use in N. Ireland are 99 KWh and 199 KWh. In the same environment with the same demand, a 199 KWh boiler will run half as long as a 99 KWh boiler. To produce 200 KW of heat, a 199 KWh boiler will run for 1.055 hrs and a 99 KWh boiler would need to run for 2.02 hrs. We find it concerning that the Audit Office should find this surprising. The consequence of banding rebate tariffs was noted when the first consultations into a Renewable Energy Scheme were considered in 2012. Despite recommendations from consultees, DfE introduced a banded scheme. Like road tax for cars, the banded scheme made operation of certain boiler types financially viable whilst others were made unattractive to purchase and operate.
With their report NIAO criticise wood drying operations however in 2010, concern was raised that N. Ireland did not have sufficient forestry and wood processing capacity to sustain a renewable energy sector. Unless wood is processed to have moisture content of under 21%, it will not burn efficiently and unless grain is dried to below 15%, it will rot – this point seems lost on accountants.
In terms of farming and in particular poultry farming, it is unlawful to subject animals to inappropriate environmental conditions. Heating systems in farming are required to have multiple fail-safe arrangements. It would, for example, be unacceptable to heat several poultry sheds, each containing thousands of vulnerable chicks, from one boiler. It is a fact that the core heating requirement of an average poultry shed is met by a 99KWh boiler. Ofgem regulations prohibit inter-connection of systems.
The NIAO Report speaks of fraud. This Association fully supports all appropriate action being taken against the two parties identified. From the report, it is clear that almost all of the 2,128 RHI accredited boilers are being operated appropriately.
The NIAO Report also covers matters which are properly the remit of the Public Inquiry and also matters which are subject of current legal proceedings. The Association is confident in the processes of the Public Inquiry and in the specific legal points which are the subject of proceedings.
In looking at usage, DETI, when they designed the scheme assumed that users would switch on their boilers only 17% of the time – a little over four hours per day – described in one document as the “normal working day.” NIAO and DfE seem to find it remarkable that any industrial (non-domestic) RHI process might legitimately require heat on a 24 hour basis. Perhaps these civil servants find it strange that others have a working day longer than 4 hours. In poultry farming, chicks cannot maintain their body temperature until they are several weeks old. It would be no more appropriate to turn off the heating to a poultry shed for 20 hours very day than to limit the electricity supply to a maternity hospital to four hours a day.
The RHI Scheme was designed to extend to nearly 30,000 boilers. The failure by scheme managers to make appropriate budgetary provision for all of the 2,128 boilers entered into the scheme and planning assumption that boilers would be in use only for 4 hours every day added to the misunderstanding as to which budget would pay the assured incentive element is the core problem. A significant number of RHI boilers are owned by Departments and public bodies. Perhaps hospitals, schools, public swimming pools, MoT Centres and police stations only need heat 4 hours per day?
Let’s not forget that the “I” in RHI is Incentive to change behaviours and adopt the more troublesome renewable energy systems and use more expensive biomass fuel. It is accepted that the costs of using renewable energy are greater than the alternative use of fossil fuels. In circumstances where a cap has been applied, if energy beyond that cap is required, without a rebate to cover the difference, fossil fuel alternatives will be cheaper. It follows that consumers will chose to reduce their usage of the more expensive renewable energy. The NIAO comments on this seem out of touch with this practical issue.
As was predicted by MLAs, the actions by DfE were subject to Judicial Review. In the first Review, DfE was found to have mis-interpreted Information Law and their assumed use of personal information. Costs of £98,744.90 excluding VAT have been awarded and paid to RHANI.
- This video highlights one DETI official explaining the basis of the Renewable Heat Incentive https://www.youtube.com/watch?v=q9O_IwfuDy0
- These videos are to the evidence previously given to Committees of the former Assembly and relate to:
- Choice of a tiered boiler “no evidence of fraud”: 28 Sep 16 clip 3 https://www.youtube.com/watch?v=NqIAipXlFHs
- The confusion in the planning and execution of RHI (NI) (17% or 4 hrs/day): PAC 28 Sep 16 Clip 2 https://www.youtube.com/watch?v=8mnBSWaTTiA
- Failure to develop and economic assessment/Cost of and implication of a Judicial Review – Clip 2, 23 Jan Economy Committee https://www.youtube.com/watch?v=G3CZKdZ0is4
Follow RHANI on Twitter @rhaniorg