Summary

  • Second public hearing of inquiry into botched Renewable Heat Incentive scheme

  • Inquiry set up after public concern over scheme's huge projected 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

  1. That's all for now...published at 16:56 Greenwich Mean Time 8 November 2017

    That's all we have for today. A brief glance out the window reveals that the sun has long since disappeared over Belfast.

    Parliament Buildings, Stormont

    Join us again tomorrow morning at 10:15 for more live coverage of the RHI Inquiry.

    See you then!

  2. 'Cost controls dropped out of picture'published at 16:34 Greenwich Mean Time 8 November 2017

    The introduction of proposed cost controls to the RHI scheme "dropped out of the picture - it simply wasn't done", according to Mr Scoffield, and why that was the case will be a "central question for the inquiry".

    At phase two of the RHI scheme in 2013, DETI had intended to add cost curbs that existed in the Great Britain initiative.

    The control that was proposed was a series of "trigger points", by which the scheme would be closed if the number of applications became too great for the budget to cover.

    wide shot of inquiryImage source, Renewable Heat Inquiry

    But, as Mr Scoffield says, the "trail went cold" after the consultation phase regarding the changes.

    In DETI's evidence to the inquiry, it says: "It would appear that priority was instead given to the launch of the domestic RHI scheme."

    Mr Scoffield suggests that is an obscure phrase, and the inquiry wants to know who made that decision and why.

  3. 'Ofgem whistleblower contacted Sinn Féin'published at 16:01 Greenwich Mean Time 8 November 2017

    An Ofgem employee contacted Sinn Féin in January this year and made allegations about the body's "mismanagement" of the RHI scheme.

    Mr Scoffield describes that as a "potentially significant development" and says the man has since provided the inquiry with a witness statement.

    Sinn Féin logoImage source, Sinn Féin

    In that, he makes "serious allegations" about Ofgem's conduct in running the scheme, and he also claims it attempted to cover up mismanagement.

    Ofgem has made clear to the inquiry that it rejects those claims, says Mr Scoffield, and it has said that it will explain to the inquiry "what may be a complex history" behind them.

  4. 'Departures made from original analysis'published at 16:00 Greenwich Mean Time 8 November 2017

    Returning from a brief afternoon break, Mr Scoffield raises the question of monitoring of the operation of the scheme, and the need to consider any departures from the original analysis by the consultants Cambridge Economic Policy Associates (CEPA).

    He notes that the capacity of the typical boiler once the scheme was up and running was 99kW, rather than the 50kW envisaged by CEPA.

    The load factor of the boilers was also significantly higher than the 17% envisaged in order to model the appropriate tariffs.

  5. 'Very low level of inspections of RHI boilers'published at 15:45 Greenwich Mean Time 8 November 2017

    Ofgem was also responsible for site inspections to ensure that the regulations were being observed by scheme participants.

    Mr Scoffield says that the auditor general's report of 2016 on the RHI scheme, external noted "that the approach adopted to sample selections in Northern Ireland gave rise to a very low level of inspections".

    The number of inspections averaged only 0.86% of the total installations from November 2012 to February 2016.

  6. 'Gaming of scheme will be carefully examined'published at 15:43 Greenwich Mean Time 8 November 2017

    So-called "gaming" of the RHI scheme is one of the biggest issues the led to the initiative's catastrophic £700m overspend.

    Some businesses installed several smaller boilers rather than a single larger boiler in order to obtain a higher tariff that was on offer for smaller installations.

    Mr Scoffield says that in December 2014 one applicant asked DETI official Seamus Hughes whether the installation of five smaller, 99kW boilers would each attract a 99kW tariff of 6.3p per kW or whether they would attract the lower 1.5p per kW rate on offer for a 495kW boiler.

    A biomass boiler

    Mr Hughes was of the view that the tariff would be based on the total heat requirement - the proposed installation it would therefore only qualify for the 1.5p rate - but he referred to Ofgem.

    It disagreed, and said that it regarded the multiple boilers as separate installations, even if they were heating the same space, and would therefore quality for the higher 6.5p rate.

    Mr Scoffield says the gaming of the scheme will be scrutinised and whether or why Ofgem was resistant to changes that would have prevented the practice will form a part of that examination.

  7. 'Tensions over costs may have frayed communication'published at 15:25 Greenwich Mean Time 8 November 2017

    There was "confusion" about the administrative costs DETI would have to pay Ofgem at several points throughout the scheme, evidence suggests.

    Mr Scoffield says that DETI had difficulty obtaining accurate forecasts for the costs, making it difficult for the department to budget for them.

    wood pellets

    He says there are questions as to whether "tensions" between the organisations about the costs may had "frayed lines of communication to the detriment" of the running and monitoring of the scheme.

    He also suggests that if Ofgem did indeed believe the its work on the RHI scheme was "small fry" there may have been a "conscious or unconscious lapse in the service level expected", and that will have to be examined when DETI and Ofgem officials appear before the inquiry.

  8. 'DETI official frankly furious over admin costs'published at 15:18 Greenwich Mean Time 8 November 2017

    There were "tensions" between DETI and Ofgem about what the administrator should be paid for its work on the RHI scheme.

    In August 2012, Ofgem's initial costings had risen from £386,000 to £700,000.

    In an email to colleagues at the time, Ofgem's Matthew Harnock said that rise had left DETI official Fiona Hepper "quite frankly furious" and had put the department "between a rock and a hard place".

    One reason for that, Mr Scoffield says, was because the then enterprise minister Arlene Foster had been "adamant" that the scheme was to begin two months later and it would be impossible to get additional funding to cover the administrative costs.

  9. 'Emails raise questions about administrative disfunctionality'published at 15:10 Greenwich Mean Time 8 November 2017

    The working relationship between DETI and Ofgem is further examined by Mr Scoffield, who says the inquiry will have to examine "any evidence of disfunctionality" between the two.

    DETI logoImage source, DETI

    He refers to emails between Ofgem officials about the sharing of data relating to the RHI scheme with DETI that "raise questions" about the "dynamic" between the bodies.

    He asks: "Why was the administrator of the scheme hesitating to provide requested information to the department responsible for keeping the cost of it under control?"

  10. 'Bloody hell... remember the RHI headaches?'published at 15:09 Greenwich Mean Time 8 November 2017

    Mr Scoffield turns to the working relationship between DETI and Ofgem, saying that "on occasion it was far from smooth".

    Referring to an internal Ofgem report of February 2013, Mr Scoffield notes the Ofgem team's view that "problems arose from the challenging, politically-driven deadline that DETI were working toward".

    Wide shot of Senate chamberImage source, RHI Inquiry

    When it was suggested that Ofgem might become involved in another DETI project, the news prompted what Mr Scoffield describes as a "candid" response from one Ofgem staffer.

    "Bloody hell, given the headaches with NI RHI arrangements I would be reluctant to take on anything else for them," the Ofgem employee said.

    "No offence to them, of course - it's just such small fry that it isn't worth the hassle."

  11. 'Administration plan not in place when scheme began'published at 14:58 Greenwich Mean Time 8 November 2017

    Formal arrangements for the administration of the RHI scheme were not in place when it began in 2012.

    An administrative arrangements agreement between DETI and Ofgem was not signed by a DETI official until 28 December that year, some eight weeks after its commencement, and Mr Scoffield says that "did not represent good practice".

    He says that does "rather add to the impression that DETI may have been determined to press ahead with the scheme even if there were certain risks in doing so".

    Among the issues that had not been resolved when the scheme started were which organisation - DETI or Ofgem - would monitor applications, and who would take action in cases of potential fraud in the scheme.

  12. 'Ofgem the natural choice to run scheme'published at 14:31 Greenwich Mean Time 8 November 2017

    Moving to the administration of the RHI scheme, Mr Scoffield outlines the role of Ofgem, which is one of the so-called core participants in this inquiry.

    It is primarily an energy policy regulator in the UK but one of its branches - Ofgem E-Serve - administered the RHI scheme in Northern Ireland.

    Boiler

    But how did it come to take on that responsibility? It was determined that DETI would not have the experience or the resources in place in 2012 to do so itself.

    Ofgem E-Serve had been running the Great Britain RHI scheme, had the required IT systems and staff, and therefore appeared that it was the "natural choice" to run the similar initiative in Northern Ireland, says Mr Scoffield.

    DETI said at the time that contracting Ofgem E-Serve would save the department money.

  13. 'Risk register shouldn't be filed away'published at 14:29 Greenwich Mean Time 8 November 2017

    Having considered the regulations that the RHI scheme was based on, Mr Scoffield moves on to how it was operated.

    He draws attention to the risk register - a document that should record risks and lays down how they should be managed and mitigated - and says it does not appear to have been reviewed and updated after it was initially opened in March 2012.

    Computer screen showing project risksImage source, RHI Inquiry

    The risk register "should be a living, active document rather than something that should be simply filed away," he says, adding that that is a matter that the inquiry will wish to examine.

    Regarding the risks noted in March 2012, he says the register "is certainly saying all the right things".

    The inquiry will want to know "whether the control mechanisms outlined in the risk register were put into practice".

  14. Back to work...published at 14:04 Greenwich Mean Time 8 November 2017

    Boiler

    It's just after 14:00 GMT and time to fire up for the afternoon's session.

  15. Time for lunch...published at 13:12 Greenwich Mean Time 8 November 2017

    With Mr Scoffield about to move on to the next section of his opening statement, it seems like an appropriate time to take a break for a bite to eat.

    The inquiry will return at 14:00...

  16. 'Limited scope to turn down applications'published at 13:12 Greenwich Mean Time 8 November 2017

    There was "limited scope" for DETI to turn down applications to the RHI scheme, says Mr Scoffield.

    He explains that the scheme's regulations detailed that a renewable heat system - say a biomass boiler - had to be either up and running or installed and ready to operate before it would be accredited by DETI.

    A biomass boiler

    That is significant, he says, because applicants were required to spend money on boilers before knowing whether they would receive money through the scheme.

    An option for a preliminary approval scheme, in which applicants could receive some comfort that they would be approved before buying, was only available to those installing large boilers of 200kW capacity and not to the vast majority of people who availed of the scheme.

  17. 'Generating heat merely to claim subsidy'published at 13:11 Greenwich Mean Time 8 November 2017

    Mr Scoffield looks at some of the obligations required of scheme participants.

    One of the regulations states that participants "must not generate heat for the predominant purpose of increasing their periodic support payments".

    He draws the inquiry's attention to the use of the word "predominant".

    David ScoffieldImage source, RHI Inquiry

    Mr Scoffield says that: "Although this obligation is plainly designed to reduce the risk of scheme participants generating heat merely to claim subsidy, it seems that a participant could lawfully generate heat for an ancillary purpose of increasing their payments provided that that was not the predominant reason for generating the heat."

  18. 'Clear picture of each RHI application'published at 12:48 Greenwich Mean Time 8 November 2017

    The inquiry takes a look at the application form for the RHI scheme.

    Applicants were asked, among other things, to provide details of their use for the heat that a new renewable system would generate, the cost of the new installation and the average hours each week that it would operate for.

    A biomass boilerImage source, Getty Images

    Mr Scoffield says that due to the detail required on the form, a "considerable amount of information should be available" for the monitoring of the scheme.

    "You should be able to form a pretty clear picture of what type of boiler is being used, how long it's being used for - those were the two key assumptions in the CEPA model that had gone awry - and whether the boiler was being used as it was intended."

  19. 'Assembly scrutiny of RHI rules appears limited'published at 12:30 Greenwich Mean Time 8 November 2017

    The draft regulations for the set-up of the RHI scheme were approved in the Northern Ireland on 22 October 2012.

    Mr Scoffield tells the inquiry that all of the parties in the Northern Ireland Executive supported the scheme at the time.

    Patsy McGloneImage source, Press Eye

    The Enterprise Committee chair Patsy McGlone (above), of the SDLP, said in the assembly debate that the committee scrutiny of the regulations "has been considerable".

    Mr McGlone will be questioned by the inquiry about the extent of that scrutiny, and Mr Scoffield says that the evidence the inquiry has seen so far suggests that it had been "relatively limited".

  20. 'There is a paucity of evidence'published at 12:29 Greenwich Mean Time 8 November 2017

    The inquiry chairman Sir Patrick Coghlin intervenes to ask Mr Scoffield for some clarification.

    He notes that it is the minister's approval "that will make things actually come into force", and that that depends on the minster receiving all the relevant material "or such of the material as DETI feel appropriate".

    Sir Patrick CoghlinImage source, RHI Inquiry

    Sir Patrick asks Mr Scoffield whether he will be making any submission to the inquiry on the information given to the minister for approval and whether it will include advice given to DETI from Ofgem.

    "I think the short answer to that question is 'no', replies Mr Scoffield.

    He says there is "a paucity of evidence" about what DETI was being told by Ofgem "and whether or how that was communicated to the minster".