Second week of public inquiry hearings 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
Origin and introduction of initiative examined by inquiry panel
Key witnesses will start to give evidence later this month
Public evidence sessions expected to last until well into 2018
Image source, Press EyeMr Lunny is thanked by inquiry chair Sir Patrick Coghlin for his "good and useful overview".
The opening statements have now been completed, so we'll be moving on to the first of the witness sessions.
The RHI inquiry will resume again at Stormont on Tuesday 28 November at 10.15am.
Join us then for more live coverage.
Goodbye!
Questions were raised by inquiry junior counsel Donal Lunny about whether officials were supplying DETI minister Arlene Foster with "accurate and comprehensive information" - and whether Mrs Foster was probing the recommendations offered to her.
The inquiry heard that the chair of the NI Assembly's Enterprise Committee, Patsy McGlone, said his committee's relationship with DETI could be characterised as "dysfunctional".
And a businessman in the renewables sector said it was widely known in the business that the RHI scheme was 'flawed' and 'too good to be true".
Finally, Mr Lunny quotes from the evidence statement of Neil Elliot, a businessman operating in the renewable energy sector.
Mr Elliott says that most of the renewables industry was aware the RHI scheme was flawed not long after it was launched.
"No actions were taken as we thought that DETI would cap the scheme, or amend the scheme to the same scheme as the UK mainland," Mr Elliott said.
He continued: "We did not communicate any potential flaws in the scheme to anyone, but it was widespread knowledge in the renewable industry that the scheme was too good to be true."
Mr Lunny presents a damning picture of DETI's position at the time of the scheme's launch in November 2012.
He says DETI had a demand-led scheme without cost controls, without a tiered tariff, without any express periodic or emergency review powers, and without any any agreement in place with Ofgem, the scheme administrator.
Image source, DETIWhat the department did have was a handful of staff looking after the scheme.
"It had a model it couldn't work, which in any event had been superseded by a model it never got," and it had an avowed intention to review the scheme.
To illustrate a more optimistic view, Mr Lunny quotes from a contribution made by DUP MLA Robin Newton in an assembly debate.
Mr Newton said he believed that: "When we reach the final stage, the economy of Northern Ireland will have benefited significantly from the steps that the minister has taken."
Image source, NI AssemblyMr Lunny says these are "comments which proved ultimately very far removed from reality, it appears".
Image source, Press EyeMr Lunny moves on to discuss the role of the Northern Ireland Assembly's enterprise committee and its responsibility to "scrutinise the work" of the department.
Patsy McGlone, former chairperson of the committee, suggests in his statement that the committee relied upon assurances given to it by DETI and the interaction between the two may have been "dysfunctional".
Mr Lunny says that the issue of the "effectiveness of the committee" seems to be another level of scrutiny.
"We will in due course be able to hear from Mr McGlone".
DETI's application for state aid approval raises questions connected to overcompensation.
The department states that tariffs vary depending on the size or type of technology "to ensure that financial support is targeted for the specific installation and so overcompensation is avoided".
Image source, RHI InquiryDETI also assures the European Commission that scheduled reviews will be built into the scheme to ensure it remains fit for purpose and value for money.
Mr Lunny explains something of his next topic - state aid.
DETI had to seek approval from the European Commission for permission to run the RHI scheme.
State aid was defined as any government aid "which distorts or threatens to distort competition by favouring certain undertakings, or the production of certain goods, insofar as it affects trade between member states".
Image source, Getty ImagesMr Lunny discusses a number of exchanges on technical points between officials.
He says there was a "danger of passing various stages" and it may be that a "domino effect" took place.
Image source, RHI InquiryPanel member Dame Una O'Brien says it appears people were simply "hoovering up assurances from others, as a way of saving themselves from having to look at the detail".
She says there is no evidence of anyone looking at the original documents, asking difficult questions or "looking at it from the ground up".
"We will want to understand what value individuals were adding to the scrutiny when we come to question them".
Mr Lunny says the evidence regarding the minister's role at this point raises questions about the extent to which the minister was being involved to an appropriate degree by officials.
Image source, GetHe queries if she was being provided with "accurate and comprehensive information", and whether Mrs Foster was asking questions and "challenging or testing recommendations".
Mr Lunny moves on to discuss the then DETI minister, Mrs Arlene Foster, who, he says, clearly played an "important part in the process".
He outlines that the minister was promised by the department that there would be appropriate scheduled reviews to the scheme and that the first review would take place in January 2014 with changes implemented by 1st April 2015.
However, he queries whether the minister was ever made aware of the "stark difference between the challenge fund and RHI cost" and did not know fully know the costs of the proposed scheme.
Image source, PAMr Lunny says that the minister approved the scheme on 11 April 2012.
He provides evidence which suggests that the minister wished for the scheme to begin as soon as possible, as the department, at this stage, was running nearly one year behind the rest of Great Britain.
Mr Lunny states that Fiona Hepper, director of DETI's renewable energy team, is recorded saying that "a monitoring committee would be established in respect of the budget".
The department would then receive monthly reports from Ofgem on the applications, accreditation and spend budget for the scheme.
Mr Lunny says that the inquiry will attempt to determine whether such a committee was ever set up.
"It appears that one wasn't and the reasons for that will have to be explored", he says.
Mr Lunny outlines six reasons given by DETI for its preference for the RHI model.
They include DETI's belief that CEPA's challenge fund analysis is overoptimistic, that RHI provides the most certainty in achieving the targets, and the success of the NIRO in the electricity generation sector.
Image source, RHI InquiryHe says these reasons offered "ultimately led to the casework committee accepting DETI's rationale".
Mr Lunny discusses DETI's choice of an RHI scheme over a challenge fund approach and says a "good deal of time was devoted to this line of questioning".
"This seems to be, in fairness, an important issue for the casework committee", he says.
Mr Lunny reads the June 2011 casework committee analysis which suggests that "whilst a challenge fund option could produce the most renewable heat at the lowest cost, energy division was conscious of other key factors that needed to be taken account of in the final policy decision".
"These factors have been very influential in the conclusion by energy division to proceed with the RHI option", he says.
Mr Lunny outlines the role of the internal DETI casework committee.
He offers a summary by Mr Shane Murphy, a member of the committee, in relation to its role.
In his statement to the inquiry, Mr Murphy states the casework committee offers a "peer review and challenge function for those projects and programmes etc. over certain expenditure thresholds'.
They ensure that projects, are "deliverable, affordable and represent value for money".
Image source, RHI InquiryHe says that the case work committee is not one where a business area takes a "menu of choices" to the committee, rather they take "fully worked-up proposals" to the committee.
The committee can either agree for the proposal to continue on to the minister for approval, or withhold the agreement and so, block it - but they do not instruct the business area to choose an option.
The counsel says we will be looking more closely at the work of the senior officials.
They are - Fiona Hepper, head of Energy Division at DETI, David Thomson who was the deputy secretary at DETI, and the department's permanent secretary, David Sterling.
Image source, RHI InquiryMr Lunny's begins his outline of how the scheme was progressed, with particular reference to the work of David Thompson
Inquiry chair Sir Patrick Coghlin intervenes to observe that there was evidently a considerable turnover of staff involved in RHI work -
"Where was the objective source from which they could obtain the necessary documents for continuity?" he asks.
"Well, I don't know, to answer that question," says Mr Lunny, adding that he will take it up with the officials.
Mr Lunny turns to the matter of consultation.
He says there a number of questions regarding DETI's reaction to the CEPA report of July 2011.
Image source, RHI InquiryHe asks if DETI should not have paid more attention to other consultation responses, "not just those that talked about biomass prices, but also, for example, the apparent unanimity amongst consultees that regular, planned reviews were important".
An independent inquiry into the RHI scandal was established in January by the then finance minister Máirtín Ó Muilleoir.
He ordered it in the wake of the huge public concern and what was then a developing political crisis surrounding the scheme.
Image source, PacemakerThe RHI Inquiry began this week and Sir Patrick Coghlin (above), a retired Court of Appeal judge, is its chair and has been given full control over how it will operate.
It will look at:
For more information on the RHI Inquiry, you can read our handy Q&A.
When the scale of the overspend emerged, public and political concern rocketed.
As the minister in charge of the Stormont department that set up the RHI scheme, the Democratic Unionist Party (DUP) leader Arlene Foster faced calls to resign from her role as Northern Ireland's first minister in December last year.
Image source, PAShe resisted, and Sinn Féin's Martin McGuinness then quit as deputy first minister in protest at the DUP's handling of what had by then become a full-blown political crisis.
That move brought about the collapse of the Northern Ireland Executive, and as we near a year on from that Northern Ireland remains without a devolved administration.
You can find much more detail on the RHI scheme in our need-to-know guide.
Critical mistakes were made in the way the RHI scheme was set up that left it open to abuse and that later saw its budget spiral out of control.
Crucial cost curbs that existed in a similar scheme in Great Britain were not replicated and claimants could effectively earn more money the more fuel they burned.
That was because the subsidies on offer for renewable fuels were far greater than the cost of the fuels themselves.
As a result, the scheme racked up a huge projected overspend - £700m at the most recent estimate - and the bill will have to be picked up by the Northern Ireland taxpayer.