First public hearing of inquiry into botched Renewable Heat Incentive scheme
Inquiry set up after public concern over scheme's projected £700m overspend
Retired Court of Appeal judge Sir Patrick Coghlin chairing inquiry at Stormont
Senior counsel giving opening statement, setting scene for inquiry
Key witnesses will start to give evidence later this month
Public evidence sessions expected to last until well into 2018
RHI Inquiry chair Sir Patrick Coghlin draws the first day of its public hearings to an end, the Senate chamber empties, and inquiry counsel Mr Scoffield will resume his opening statement tomorrow.
Image source, PacemakerThanks for joining us - we'll be back at Parliament Buildings tomorrow morning for more, and we hope you'll join us then.
Goodbye for now!
The assertion made by the CEPA consultants commissioned by DETI was that a tiering system was not required in Northern Ireland because the cost of wood pellets - the fuel used in biomass boilers - was higher than the subsidy on offer through the RHI scheme.
If a boiler owner had to pay more for the fuel than they were receiving in subsidies there would be no burn-to-earn incentive.
CEPA's basis for that suggestion will be a key focus for the inquiry, says Mr Scoffield.
But crucially, he says, when CEPA produced its second report for DETI, the subsidy on offer actually was higher than the cost of the fuel.
One of the biggest questions in the RHI scandal is why there was no tiering system in place for the subsidies on offer in the scheme.
Tiering is an important way of controlling the cost of the scheme and works by dropping the tariff on offer once a certain limit of usage has been reached, with the intention of preventing a claimant from overusing their heating system to collect more cash.
Image source, PAIn the Great Britain scheme, a tiering system was in place, meaning there was no "perverse incentive" for a burn-to-earn abuse of the scheme.
Mr Scoffield says expert consultants told DETI that tiering was not needed in Northern Ireland and the decision not to replicate that feature of the Great Britain scheme was a conscious one based on evidence.
So, why did no-one spot that error in assumptions underpinning the tariff calculations? That, Mr Scoffield says, is a crucial question.
He outlines an email exchange last year between the Department for the Economy's permanent secretary Dr Andrew McCormack (below) and Shane Murphy, another senior civil servant, when the failures of the scheme had emerged.
Mr Murphy gave his retrospective assessment of the 2012 calculation, saying that it actually allowed for a rate of return of about 70%.
In response, Dr McCormick wrote: "I fear this kind of analysis could have been done in 2012..."
Mr Scoffield raises a report by CEPA in 2012 that outlined recommendations for the subsidies on offer for the use of biomass boilers in the RHI scheme.
The recommended tariff had been increased from an earlier suggestion due to inflation and "barrier costs" were included that had previously not been considered.
But Mr Scoffield says the tariff calculations relied on two assumptions that were "not well founded" - the size of the boilers and the amount of time that they would be used.
The boilers installed through the scheme were generally double the size of what had been assumed and were used for 45% of the time, rather than the predicted 17%.
As a result, beneficiaries of the scheme got a larger rate of return than the 12% that was intended.
Mr Scoffield says that DETI's evidence states that the tariff design used in Northern Ireland was consistent with the approach taken in Great Britain.
Image source, RHI InquiryHe says that was true in general, but the were were differences.
"An important area for the panel will be whether any such differences were justified," the counsel says.
The inquiry will want to consider whether there was any "inevitability" about the decision to opt for the continuing subsidy model, Mr Scoffield says.
Image source, RHI InquiryHe also refers to communications between officials querying the continued funding of the scheme after 2015.
In the public consultation that followed the CEPA consultation paper, questions were also raised about tariff levels and biomass prices.
A total of £25m had been allocated to Northern Ireland by the Treasury to incentivise renewable heat.
Image source, ReutersDETI commissioned CEPA to draw up a report on a potential incentive scheme for renewable heat and two options were put forward:
DETI took up the second of those options, naming it the RHI scheme.
In 2010, DETI minister Arlene Foster (below) announced that she was "minded" to proceed with a scheme to incentivise the production of renewable heat.
She said a specific Northern Ireland scheme was required because the region had a different energy market from the rest of the UK.
Image source, ReutersAn economic appraisal was commissioned from the consultancy firm Cambridge Economic Policy Associates (CEPA), assisted by AEA Technology Ltd.
Mr Scoffield says that appraisal will be an important focus of the inquiry.
The RHI scheme was set up in an attempt to reduce carbon emissions and increase the generation of heat through renewable sources, Mr Scoffield says.
The process began with the European renewable energy directive of 2009, which set legally-binding targets to be met by 2020.
Image source, Getty ImagesThe Northern Ireland Executive then set itself a target of 4% of heat to be produced by renewable energy by 2015.
Consultants were employed to determine what kind of project could be put in place to help to achieve that, but crucial to any policy that would be adopted was that it had present value for money.
The RHI scheme was set up and run by DETI in 2012, and Mr Scoffield outlines some of the key people involved in the process.
First of all, David Sterling - now the head of the Northern Ireland civil service - was the most senior civil servant, known as a permanent secretary, at DETI at the outset of the scheme.
Image source, DetiDr Andrew McCormick was the permanent secretary at DETI when the scheme's failings first became apparent, while Fiona Hepper was a senior civil servant who headed the department's energy division.
They and others are expected to give evidence to the inquiry in the coming months.
Mr Scoffield says there was a high turnover of staff involved in the scheme during what may have been a "critical" time in its lifespan.
Back after a bite to eat, Mr Scoffield picks up where he left off in his opening statement.
He focuses on the DETI annual accounts, and says that from 2013 and 2016 the RHI scheme "escalated extremely quickly" from the point where it only merited a passing mention to a point where it "overshadowed much, if not all, the department's good work".
Image source, Getty ImagesIt is almost as if the problems with the scheme "came out of nowhere", he says.
The task for this inquiry is to figure out how that happened and make sure something similar does not occur again, adds Mr Scoffield.
We're midway through the opening day of the RHI Inquiry and here are some of the details we've heard so far from the inquiry's senior counsel David Scoffield QC:
You can read our report on what the inquiry has heard so far by clicking here.
BBC News Northern Ireland
It's fair to say that the tale of the RHI scheme is a complex and lengthy one.
Many of you following our live stream and text commentary of the RHI Inquiry will be aware of at least some of the details surrounding the scheme and how it led to a major political crisis in Northern Ireland.
But if not, or if you're simply looking for more information, we've drawn up a handy question-and-answer guide that will fill you in on the full background of the RHI scheme.
Click here to read BBC News NI's need-to-know guide.
The inquiry pauses for a lunch break, so we'll go and stick the kettle on...
Image source, Getty ImagesWe'll be back for the afternoon session at 14:00 - join us again then.
Mr Scoffield refers to the 2015-16 annual report from the Department for Enterprise, Trade and Investment (DETI), which says that demand for the RHI scheme "increased significantly" during the year.
It put a positive spin on that, saying that the demand had led to the achievement and exceeding of its target of 4% of Northern Ireland's heat being generated through renewable sources, with the figure sitting at 6%.
Image source, RHI InquiryIt added that the scheme was closed from 29 February 2016 and a plan to develop the separate scheme for non-domestic users had been deferred.
Mr Scoffield adds that department figures reveal the overspend for the prior months.
Mr Scoffield begins an overview of phase one of the inquiry, illustrating how applications for the scheme grew as the months passed.
He describes March 2015 as a "bumper month" and says concerns had arisen about whether the scheme could remain within its budget.
Image source, TcharaA new tariff was introduced in November that year to make the scheme less attractive.
But Mr Scoffield explains that there was a "huge upsurge in the number of applications" before that was imposed.
There were 100 applications in September, 504 in October and 378 in November - this was the so-called "spike" spell.
It will "not be appropriate" for people to try to undermine the inquiry by responding to evidence by way of speaking to the media, says Mr Scoffield.
Those seeking a right of response will be given the chance to do so through the inquiry, he adds.
But the inquiry should not "become a platform for any attempt at trial by media".
A woman who contacted the then enterprise minister Arlene Foster to tell her of the scale of the failings of the RHI scheme has had her request for anonymity at the inquiry turned down.
She made her request because felt she had become a "pawn in a wider political chess game" when the public furore over the scheme erupted last year, says Mr Scoffield.
Image source, PacemakerHe adds that the whstleblower feels she may become "victimised" and is "fearful of the effects" that any publicity could have on her family.
But Mr Scoffield says that the inquiry chair Sir Patrick Coghlin did not grant her request because it did not meet the requirements for an anonymity order to be applied.
"It is right and proper that the public should see the inquiry at work," says Mr Scoffield, because it is conducting an investigation on its behalf.
He outlines that the public is able to attend the hearings in the Senate chamber at Stormont and transcripts of the proceedings will be published on the inquiry's website, external the next day.
Other statements from witnesses will also be published on the day that they appear before the inquiry.
That access to evidence will give the public an "unprecedented insight" into how Northern Ireland is governed.