Estimates of the RHI scheme's admin costs were a "stab in the dark", says Mr Scoffield.

It is pointed out that the GB RHI scheme had not been running for long at the time Ofgem's costs calculations were made, and would therefore have been difficult to draw a comparison from.

In spite of DETI's instruction to assume the NI scheme's uptake would be 3% of that in the GB initiative, Ms McArthur advised in the feasibility study that Ofgem should plan for a 5% uptake.

But at DETI, it was making its plans and seeking funding for costs based on a 3% uptake.

Ms McArthur says her approach was a "cautious" one and had she known DETI was going ahead with its 3% uptake assumption she would've told it that it "would be going against our recommendations".

One of the key factors in estimating the running costs of the RHI scheme is the number of people who would apply to it, says Mr Scoffield.

Ofgem based its admin costs calculations on the uptake in the Northern Ireland initiative being 3% of the number of applicants to the Great Britain scheme.

Image source, Getty Images

Asked how it came to that figure, Ms McArthur says DETI instructed Ofgem "to assume 3%".

"I had assumed at the time that there was a basis to it," she adds, saying she thought the department would've had consultancy work done to establish such a figure.

Ms McArthur was recruited specifically to conduct the feasibility study into the RHI scheme but she had never written such a document before.

Fast forwarding to February 2013, Ofgem drew up a report looking at how the scheme had gone to that point, and Mr Scoffield describes it as a "fairly frank discussion of what had gone well and what, in their judgement, had not gone so well".

Image source, Getty Images

In that report, one point that was raised was that "the scope of the scheme should have been clearly outlined in the feasibility study and not left undefined until a later stage".

Following up on her previous pooint about DETI's lack of clarity on the policy behind the RHI scheme, Ms McArthur says Ofgem "asked a lot of questions" seeking more details.

But DETI was "unable to give us any direction at all", she adds, even though she "pressed quite hard" to get the details she needed to "make sure the feasibility study was as accurate... as possible".

Mr Scoffield draws Ms McArthur's attention to part of her written evidence where she says DETI wanted to keep costs to a minimum.

She says it was evident from discussions with her main DETI contacts - energy team officials Peter Hutchinson and Joanne McCutcheon - and she understood this was purely for value for money.

Image source, RHI Inquiry

Ms McArthur said in her written testimony that final policy positions were not available on many details of the scheme design and this was "a major challenge".

She tells Mr Scoffield that Ofgem was "somewhat surprised" when DETI provided the scheme regulations and these were identical to the Great Britain RHI scheme regulations with some names changed.

DETI paid Ofgem about £80,000 to conduct the feasibility study into running the RHI scheme, which Ms McArthur says assessed how and at what cost the body could do the admin work.

Mr Scoffield says may seem "strange" that DETI paid Ofgem "to tell it whether Ofgem could do some work for it, for which Ofgem would later be paid".

Image source, Getty Images

"It's paying Ofgem to tell it how much Ofgem should be paid," he adds, saying that might appear to the public as "a little curious".

One DETI official made the point to the energy team suggested that might cause a conflict of interest and would effectively be, as Mr Scoffield puts it, "the judge in its own cause".

But Ms McArthur says that while her organisation would "make recommendations it would still be a collaborative process" and DETI would be responsible for making the final decision.

Catherine McArthur makes an affirmation prior to being questioned by the inquiry's senior counsel David Scoffield QC.

Her written statement to the inquiry can be found on its website, external.

Image source, RHI Inquiry

She worked for Ofgem from 2011 to 2014, having previously worked for the New South Wales state government in Australia on climate change issues.

In 2011, Ms McArthur worked on an Ofgem feasibility study on the RHI scheme, and that was delivered to DETI in December that year.

BBC News Northern Ireland

An independent inquiry into the RHI scandal was established in January last year 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.

The RHI Inquiry began in November and Sir Patrick Coghlin (below), a retired Court of Appeal judge, is its chair and has been given full control over how it will operate.

Image source, Pacemaker

It will look at:

• the design and introduction of the RHI scheme
• the scheme's initial operation, administration, promotion and supervision
• the introduction of revised subsidies and a usage cap for new scheme claimants in 2015
• the scheme's closure

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 (below) faced calls to resign from her role as Northern Ireland's first minister in December 2016.

Image source, AFP

She 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. Now, a full 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.

The budget of the RHI scheme ran out of control because of critical flaws in the way it was set up.

Claimants could effectively earn more money the more fuel they burned because the subsidies on offer for renewable fuels were far greater than the cost of the fuels themselves.

The most recent estimate for the overspend was set at £700m, if permanent cost controls aren't introduced.

The massive overspend bill will have to be picked up by the Northern Ireland taxpayer.

The Renewable Heat Incentive scheme - or RHI for short - came to the fore of the Northern Ireland public's knowledge in autumn last year... and the fallout from the scandal attached to it is still being felt in the region's politics today.

Image source, Getty Images

The scheme was set up by the Northern Ireland Executive in 2012, as a way of encouraging businesses to switch from using fossil fuels to renewable sources for generating their heat.

Those who signed up were offered financial incentives to buy new heating systems and the fuel to run them.

Welcome to Tuesday's live coverage of the RHI inquiry on a glorious sunny morning on the hill at Stormont.

Image source, Press Eye

Today's sessions are taken up by officials from Ofgem, the government energy regulators, who administered the ill-fated Northern Ireland RHI scheme.

They are Catherine McArthur, who features in the morning session, and Keith Avis who'll be here this afternoon.