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Summary

  1. Design of botched scheme outlined to Renewable Heat Incentive Inquiry
  2. Counsel gives outline of inquiry's second phase - the initial operation of RHI scheme
  3. Inquiry set up after public concern over scheme's huge projected overspend
  4. Retired Court of Appeal judge Sir Patrick Coghlin chairing inquiry at Stormont
  5. Public evidence sessions expected to last until well into 2018

Live Reporting

By Robin Sheeran and Iain McDowell

All times stated are UK

That's all for now...

After a couple of days of presentation from the inquiry's counsel, we'll be hearing from witnesses again tomorrow.

Carson's statue at Stormont
Getty Images

The first of those will be Brian Hood, who ran a building firm, and was one of the first people to recognise how lucrative the RHI scheme was.

Join us from 09:45 for our live coverage of proceedings... goodnight for now!

What happened today at the RHI Inquiry?

BBC News Northern Ireland

A woman who tried to draw Arlene Foster’s attention to abuses of the RHI scheme less than a year after it opened has told the inquiry that it was "clear" that her concerns would not be investigated.

Janette O’Hagan has been described as a whistleblower, who was one of the first people to raise issues about the scheme’s overgenerosity.

Burnng wood pellets
BBC

She emailed the then enterprise minister in 2013, telling her that the initiative "pays participants to use as much heat as they can".

She met officials from Mrs Foster’s department who were working directly on the scheme, and has told the inquiry that that they did not "share my concerns that the people would abuse the scheme".

'Vast majority of claimants got most lucrative subsidy'

In late-December 2013, the scheme administrators Ofgem supplied one of its weekly reports about the RHI scheme's uptake to DETI.

At that point, 85 applications to the scheme had bee approved.

Mr Aiken takes the panel through what appears to be a rather complicated spreadsheet, which shows 78 of those were for boilers that fell into the most lucrative subsidy band.

Sir Patrick Coghlin and Dr Keith MacLean
RHI Inquiry

Not only that, but many of the boilers were being use 24 hours a day, seven days a week - that was far longer than had been intended meaning that claimants were able to earn as much as five times what DETI had intended for them to receive.

Inquiry panellist Dr Keith MacLean looks through the spreadsheet, trying to find any boilers that weren't being used around the clock, and eventually manages to find one: "You have to look quite hard for that," he says.

Mr Aiken says the questions arising from that information is whether those weekly reports were read by the DETI officials and when they should have set off an alarm bell for the civil servants.

'Were GB scheme changes accurately conveyed to Foster?'

The DECC minister Greg Barker wrote to his DETI counterpart Arlene Foster in December 2013, drawing attention to some key changes to the Great Britain RHI scheme, including budget management measures.

Two policy documents about controlling the scheme's cost were also included with the letter.

Arlene Foster
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They were passed to the DETI civil servants working directly on the RHI scheme, who supplied a summary to Mrs Foster.

But the issue of managing the budget of the Northern Ireland initiative wasn't mentioned in the submission, nor was there any mention of adding cost controls.

Mr Aiken says that the inquiry must consider whether the points that Mr Barker was making were "accurately summarised to the DETI minister" by her civil servants.

'Changes made to RHI team at worst possible time'

Two of the most important officials concerned with the development of the RHI scheme - Peter Hutchinson and Joanne McCutcheon - left shortly after the Ms Hepper's departure.

Mr Aiken says their departures raise "very serious questions about the handover process".

Dame Una O'Brien and Sir Patrick Coghlin
RHI Inquiry

He asks if there should've been a second handover briefing for the scheme, that would've included "knowledge banked by the people who are there that's not necessarily immediately or easily transferred".

Given the complexity of the scheme and the changes that were about to be made to it, splitting up the staff working on it came at the "worst possible time", says Sir Patrick.

'New boss would've wanted to know about problems'

Inquiry chair Sir Patrick Coghlin says the "first thing" someone starting in a new role would want to know would be "are there any problems" with the projects they are about to take on.

"This looks to me like the formal departmental operation... you don't put the problems in [to handover notes]," he adds, saying that some of the issues had been happening "for some time".

A man in an office
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Agreeing, Mr Aiken says "you want to know where the bodies are buried" but "you certainly won't find that reading this document".

Dame Una O'Brien, who brings expertise of the working of the civil service to the inquiry panel, says what was discussed in the handover meetings will be crucial to examine.

'No problems recorded in handover document'

Fiona Hepper, who's been a key character in the RHI scheme story to date, left her job as head of DETI's energy division at the end of November 2013.

Her replacement John Mills took up the job on 6 January 2014, and a handover pack or "first-day brief" was provided to him.

A woman handing a folder to a man
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It included just three pages on the RHI scheme, which had been prepared by Joanne McCutcheon, one of the officials working directly on the project.

Mr Aiken notes that on those pages "there are no problems recorded in this programme, there are no mentions of cost controls, there is no mention of a review" of the initiative that had been planned to take place.

'DETI chose to push ahead with domestic scheme'

It had been DETI's intention in the development of the RHI scheme to expand the non-domestic initiative and add cost controls to it at the same time as introducing a similar scheme for domestic users.

But the submission to Mrs Foster in November 2013 suggested that the department could push ahead with the domestic scheme first and be opened the next spring, leaving the plans for the non-domestic initiative for later.

An EU flag
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Mr Aiken says that is the first when there appears to be a "de-coupling" of the two parts of the plan.

DETI said it could push ahead with the domestic scheme because it didn't require approval from the European Union under regulations about state aid for businesses.

But that message to the minister was incorrect - the domestic scheme would have needed a rubber stamp from the EU because it was open to landlords.

'Most systems were in higher subsidy band'

As of November 2013 - a year after the RHI scheme opened - there were 41 accredited participants out of a total of 61 applications.

That same month, DETI's energy team boss In Fiona Hepper sent what was to be her last submission to the minister Arlene Foster.

Wide shot of the senate chamber
RHI Inquiry

The draft submission notes that the majority of the registered systems are "in the 20kW to 99kW thermal band".

That was the band with the higher, more lucrative rate of subsidy.

That's lunchtime...

A cup of tea
BBC

A quick break for a sandwich and a cup of tea, and the inquiry will return at 14:00.

'Danger we warned of now apparent on the ground'

Concerns were raised in responses to DETI's public consultation on its planned update to the RHI scheme received.

The green energy group Action Renewables said the trigger method for subsidies would be a "disincentive to the biomass heating sector" and would cause "further uncertainty in a difficult market".

The group's chief executive Michael Doran said the move could be "catastrophic for smaller installers" with the a risk of "the entire market collapsing part of the way through the financial year".

A biomass boiler
BBC

One company, Biomass Energy Northern Ireland, reiterated a warning it said it gave in the consultation before the scheme opened in 2012 about the potential for so-called gaming of the scheme.

Gaming is the installation of multiple small boilers instead of one large, more efficient boiler in order to collect a higher subsidy on offer for the smaller systems.

Biomass Energy Northern Ireland said that what it had warned about "is now very apparent on the ground", with a "plethora of multiple-but-separate systems" being used and a "demand to undersize boilers just to stay within the higher rate tariff".

'Clear that scheme abuse concerns wouldn't be probed'

Ms O'Hagan had requested a meeting with Mrs Foster to discuss the RHI scheme but that was declined.

Instead, she was granted a meeting with the DETI energy team that was working directly on the initiative - Fiona Hepper, Peter Hutchinson and Joanne McCutcheon.

People looking at charts
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In her witness statement to the inquiry, Ms O'Hagan said she felt that "they didn't share my concerns that people would abuse the system".

"It was clear that my concerns would not be further investigated."

She will appear before the inquiry on Friday and we'll hear much more then about her contact with Mrs Foster and DETI officials.

'Scheme pays people to use as much heat as they can'

Arlene Foster was told in early-September 2013 by a woman, who's been described as a whistleblower, that the RHI scheme "pays participants to use as much heat as they can".

Janette O'Hagan emailed the then enterprise minister's personal email address to tell her that the incentive to use more heat is "leading to misuse in some cases".

Ms O'Hagan ran a company selling technology that helps to make businesses more heat efficient.

An email inbox
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In her witness statement to the inquiry, Mrs Foster said Ms O'Hagan's concerns "weren't escalated to ministerial level".

Mr Aiken says that the inquiry panel will want to look at whether by receiving the email at her personal address constituted an escalation of concern to ministerial level.

Stormont's Department for the Economy - formerly DETI - has told the inquiry that it first saw the email in March 2017, three-and-a-half years after it was sent to Mrs Foster.

'Two heating systems... two sets of tariff?'

DETI held events in Armagh, Belfast and Coleraine for stakeholders during the consultation period for the changes to the RHI scheme.

A question was raised at one of those events about the application of the scheme to mushroom farming.

A man holding mushrooms
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The questioner asked: "What would the position be for a (mushroom) factory with two 99kW boilers separated hydraulically but under the same roof?"

DETI replied that "they might be seen as separate heating systems".

Mr Aiken says the implication is "two sets of tariff", and the implication of the record of the meeting is that the questioner should best speak to the scheme's adminstrator, Ofgem.

'Statements in DETI document were simply wrong'

DETI's public consultation document also said that DECC was "in the process of introducing a system of tariff digression" in the GB initiative, but that was "simply wrong", says Mr Aiken.

DECC's digression measure had already been in place since the end of April that year, several months earlier.

A finger on an emergency stop button
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He also says that DETI stated that it was intending to make changes to the scheme in order to "retain the right to suspend the scheme if budget limits could be breached".

But he says that for DETI to "retain" the right to stop the scheme in an emergency, the department would've needed to already hold that power, which was not the case.

'Who made decision to delay permanent cost controls?'

Mr Aiken turns to DETI's public consultation document of July 2013 for the next stage of the RHI scheme.

Regarding the addition of cost controls, DETI said it expected to introduce similar digression measures as were in the GB scheme "in the future" but it was proposing "a simpler system" in the interim.

Joseph Aiken
RHI Inquiry

Mr Aiken says the inquiry panel may want to examine who came up with that idea of adding simpler controls rather than adopting DECC's "more complicated, permanent mechanism," and why.

He adds that the inquiry has yet to find any detail about the rationale behind the decision.

'Bizarre scenario over admin cost arrangement'

There was concern within DETI's energy team in June 2013 when its bid for money from Stormont's block grant from Westminster to cover administration costs for the initiative was turned down.

The sizable budget for subsidies in the scheme could not be used to pay for admin, which was a relatively small sum in the wider context.

£10 notes
BBC

About £5m from the subsidies budget had to be handed back to the Treasury because the department hadn't been able to spend it.

Mr Aiken describes that as a "bizarre scenario" and says one question arising from that is what steps were taken to change that situation, perhaps allowing unspent subsidy money to be used to cover admin.

'Reference to cost controls drops off'

A draft letter to the Northern Ireland Assembly's Enterprise Committee explains that the forthcoming public consultation would consider some minor changes to the non-domestic RHI scheme.

Wide shot of Senate chamber
RHI Inquiry

The three aspects were:

  • biomass stability;
  • metering arrangements;
  • introducing a cost control mechanism.

Mr Aiken explains that as time passes the sentence reappears in the consultation process with the biomass and meter aspects retained, but "the reference to cost control simply drops off".

'New questions on how Foster was told of finance issues'

There were no details in the submission to Mrs Foster about why the development of the RHI scheme in the summer of 2013 was or was not affordable.

There was also no details about why cost controls were being proposed for the public consultation document on the scheme's next phase.

A man using a calculator
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In fact, Mr Aiken says there is no record in any submission to the minister about that issue.

He says the inquiry panel will have to consider that when assessing how important cost controls were thought to be by those working on the scheme.

Inquiry panellist Dame Una O'Brien says it also raises "fresh questions about how financial information was presented" to Mrs Foster in earlier submissions.

'Cost control only mentioned once in paper to Foster'

At the end of June 2013, DETI's energy boss Fiona Hepper sent a submission to the department's then minister Arlene Foster about the public consultation for the next phase in the RHI scheme's development.

It was envisaged that the next phase would include:

  • the expansion of the non-domestic RHI scheme;
  • the introduction of the domestic RHI scheme;
  • other issues addressed, including adding cost controls to the non-domestic RHI scheme.
A document that reads: Strictly confidential
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The only time the words "cost control" were mentioned in the submission to Mrs Foster was on the contents page.

Mr Aiken suggests that the inquiry panel should therefore consider to what extent DETI's energy team "saw budget management and cost control as a priority".

'DETI was on notice about GB RHI controls'

A Department for Energy and Climate Change (DECC) policy document regarding the domestic RHI scheme in Great Britain was shared with DETI in June 2013 ahead of its publication.

Mr Aiken says that DETI was now "formally on notice" that the GB domestic scheme would have a digression mechanism - a cost control method - built in.

Sir Patrick Coghlin
RHI Inquiry

Inquiry chair Sir Patrick Coghlin notes that DETI knew this in the context that "they have no emergency cost controls (and) they have no digression".

And the GB non-domestic scheme already had digression.

'Another missed opportunity to notice error'

The biomass fuel prices prices in the third CEPA report were unchanged from its original 2012 report.

It confirms the cost of fuel pellets at between 3.5p and 4.5p per kWh.

Biomass pellets
BBC

The inquiry's heard many times already that the setting of the subsidy at 5.9p in comparison with the lower cost of fuel was the cause of the overcompensation of scheme participants and led to the budget being burst.

Mr Aiken suggests that the report is "a further potential opportunity for CEPA to recognise its own error over tiering" of the scheme's tariffs and for DETI's energy division "to do likewise".

Inquiry counsel outlining inquiry's second phase

Yesterday we heard from Joseph Aiken about the next part of the RHI scheme's lifetime that the inquiry is dealing with.

Today, he begins by looking at a report on the development of the RHI scheme that was provided to the Department of Enterprise, Trade and Investment (DETI) by energy consultants.

Joseph Aiken
RHI Inquiry

The department engaged the same consultancy firm - Cambridge Economic Policy Associates (CEPA) - as it did when the scheme was first being set up.

CEPA delivered its third report for DETI - concerning how to add extra technologies to the RHI scheme and how a similar initiative for domestic users could be put in place - in June 2013.

This referred to by Mr Aiken as CEPA 3.

Poultry farmer feels 'conned' over RHI scheme

Conor Macauley

BBC News NI Agriculture and Environment Correspondent

A County Tyrone poultry farmer says he feels conned by the government over the RHI scheme.

Colin Watt borrowed £380,000 to invest in renewable heat technology through the initiative.

Colin Watt with his biomass boiler
BBC

He says he did it on the strength of promises and encouragement from Stormont departments.

With eight years left to go on the loan, he says tariff changes have left him "paying the price" of mistakes made by others.

What happened yesterday at the RHI Inquiry?

BBC News Northern Ireland

A letter sent by Arlene Foster to banks was the subject of "media speculation" and "innuendo",the inquiry was told.

Arlene Foster
Press Eye

It heard that in fact it had been written by one of her officials and was sent to banks without amendment by the then DETI minister Mrs Foster.

The letter was intended to encourage banks to lend to businesses who wanted to invest in renewable technologies but were facing resistance from the lenders.

What is the RHI Inquiry?

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 concernand 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.

Sir Patrick Coghlin
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.

RHI scheme - the fallout

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 2016.

Martin McGuinness and Arlene Foster
PA

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, more than 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.

RHI scheme - the flaws

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

Burning £20 notes
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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.

RHI scheme - what was it?

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.

A biomass boiler
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.

Good morning

Stormont hill is dusted with snow this morning, so let's get inside the Senate chamber in Parliament Buildings and get a seat beside a radiator.

The Senate chamber
Press Eye

We're back with more from the opening statement of the RHI Inquiry's second phase - the initial operation of the RHI scheme.

Stick with us throughout the day for the live video stream and text commentary on proceedings.