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Summary

  1. Fifth public hearing of inquiry into botched Renewable Heat Incentive scheme
  2. Inquiry set up after public concern over scheme's huge projected overspend
  3. Retired Court of Appeal judge Sir Patrick Coghlin chairing inquiry at Stormont
  4. Week two begins with comparison with Great Britain version of scheme
  5. Key witnesses will start to give evidence later this month
  6. 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...

Sir Patrick has kept us all a bit longer than we thought this evening - let's hope none of the barristers have missed their bus.

Stormont after dark
BBC

We'll be back bright and early tomorrow with the proceedings beginning at 09:30 GMT, so do join us then.

Goodnight for now!

'Civil service document library will prove important'

The RHI Inquiry has gained access to the Northern Ireland Civil Service's electronic document library system, known as Trim, and can establish who viewed key RHI documents and when, says Mr Aiken.

He gives an explanation on how the system works - when documents are loaded into it, the time is registered and they are given a reference code.

The metadata attached to the document shows who entered it into the system as well as the identity of anyone who viewed it.

Sir Patrick Coghlin smiling
RHI Inquiry

This, Mr Aiken explains, will become important when it comes to identifying when DETI put their hands on documents, who looked at them, and what they did with them.

He emphasises that he does not claim to be an expert on Trim but Sir Patrick interjects: "You are compared to me."

"I've spent two public inquiries trying to avoid being connected to Trim," Mr Aiken jokes.

'Introduce an RHI scheme if it's financially viable'

On 20 September 2010, the then DETI minister Mrs Foster announced that her department would look to introduce an RHI scheme for Northern Ireland if it is "economically viable", says Mr Aiken.

Arlene Foster
PA

At the end of that year, she received and later approved a submission for approval for a business case for consultants to carry out an economic appraisal for such an initiative.

'Foster had desire to be kept informed'

Mr Aiken introduces a letter sent from DETI minister Arlene Foster to Chris Huhne (below), the government's then energy secretary - remember him?

"I'd be very keen to learn from your experience in developing the RHI, and if your department held any relevant information that may be useful in our work I'd be grateful if it could be shared," Mrs Foster says.

Chris Huhne
BBC

She goes on to ask about funding, and whether Northern Ireland would be able to avail of any UK-wide tax or levy "in the normal way".

"At a ministerial level it could be said this letter is indicative of a desire to ensure that lessons were learnt from what was happening in GB. There's a question over the funding - a desire to be kept informed," says Mr Aiken.

The inquiry team is trying to locate Mr Huhne's reply, he adds.

'Not to say DECC got everything right'

Mr Aiken emphasises that DECC did not stop gathering intelligence on RHI even after it had issued its policy consultation document.

For instance, in September 2010 it took delivery of a 40-page report on gas metering from a company called Gastec.

A gas meter
Getty Images

The introduction to the report states that it "concerns the measurement of renewable heat in the non-domestic sector to ensure it is measured robustly and cost effectively, and the RHI therefore only rewards the correct quantity of heat".

Mr Aiken says that in considering the many documents he has highlighted today: "This is not to say DECC got everything right in respect of RHI and Northern Ireland got everything wrong."

'Periodic reviews would ensure value for money'

Mr Aiken draws the panel's attention to a section of the DECC 2010 consultation making specific reference to digression.

It says digression will ensure value for money: "Periodic reviews of the RHI will allow us to reassess technology cost levels as appropriate."

The inquiry
RHI Inquiry

"We do not propose implementing digression from the outset," the document continues.

"What this shows is that someone in DECC was at least thinking about this," Mr Aiken says, adding that the inquiry will want to consider whether there is any evidence of this happening in the Northern Ireland consultation that came later.

'Important that only useful heat be funded'

In its work on developing the RHI scheme in Great Britain, DECC - the government department responsible for the initiative - identified the potential for a "perverse incentive".

That would see claimants being able to increase their payments if the subsidy on offer was higher than the cost of the fuel for their renewable heat system - the claimant could run their boiler constantly, even if it was not needed, in order to earn more money.

A biomass boiler
BBC

A lack of protections in the Northern Ireland scheme to prevent that "perverse incentive" was the critical flaw that led to the enormous overspend, and Mr Aiken says the possibility was first picked up in a DECC consultation document in 2010.

DECC explained that it was important that only "useful heat" was funded by the scheme, and had considered plans to make sure that claimants not overcompensated.

'Was digression ignored due to complexity?'

The first mention of digression - a measure to protect the budget for any future RHI scheme in Northern Ireland - was mentioned in February 2010 in a report for DETI by a consultancy firm.

It would allow the subsidy on offer through an RHI scheme to be lowered in response to increased demand, for example, which would therefore keep the initiative's budget on course.

Crucially, it was not inserted into the Northern Ireland scheme and that was a significant reason for why the scheme's overspend spiralled out of control.

A man points to figures on screen
Getty Images

"It's clear that it's a very complicated mathematical method to put in place," says Mr Aiken.

He tells the inquiry that it will have to look at why digression was not put in place and whether than could have been due to the "inevitable complexity of it".

The report from the consultants warned that an RHI scheme was "likely to be a complex policy with no direct precedents".

'Much more work necessary on renewable heat'

In July 2009, the Westminster government announced its intention to open a Renewable Heat Incentive scheme to be up and running in great Britain by April 2011.

By that stage, DETI had yet to make a decision on its own path in relation to an RHI scheme, but a consultation document was being launched for an energy framework for Northern Ireland.

wood pellets
BBC

In that document, DETI said "much more work will be necessary" to increase the generation of heat from renewable sources.

Northern Ireland, Mr Aiken says, was well behind the UK in terms of its planning and policy on the matter.

'No policy, strategy, target or support mechanism'

We pick up for the afternoon session, and Sir Patrick announces that the inquiry will sit until 17:30 today and start at 09:30 tomorrow to allow the lawyers to keep to their schedule.

Mr Aiken then turns to a submission from Ms Pyper to the DETI minister Arlene Foster on 30 April 2009, saying it "effectively sees the genesis of the Northern Ireland RHI scheme".

Joseph Aiken
RHI Inquiry

It essentially seeks permission to begin working on the issue of renewable heat.

Ms Pyper writes: "Northern Ireland currently has no policy, strategy, target or support mechanism to incentivise renewable heat."

Time for lunch...

Mr Aiken pauses before launching into another memo, which allows Sir Patrick an opportunity to break for lunch.

Sandwich
PA

We're away for a cheese sandwich, so join us at 14:00 BST when Mr Aiken will commence bowling from the pavilion end, so to speak.

'DETI resources not remotely close to GB department's'

Inquiry chair Sir Patrick Coghlin is struck by surprise, saying he does not understand why the DETI officials did not tell their minister and the permanent secretary about their lack of resources to carry out an energy policy.

Dr Keith MacLean, the assessor to the inquiry, adds that "worse than that" it was not a "passive" decision to remove a reference about resources from what was passed on to the minister.

Sir Patrick Coghlin
RHI Inquiry

Sir Patrick adds he wants an explanation why people who could help with allocating resources would not be given the information relating to it.

DETI's resources in terms of staffing, etc, "wouldn't remotely come close" to what was at the disposal of the department that set up the Great Britain RHI scheme, Mr Aiken says, adding that that is why he earlier asked if DETI should ever have embarked on its own RHI scheme.

'Hard to find something positive to say'

Mr Aiken refers to a memo from DETI energy official Olivia Martin to colleague Jenny Pyper (below) regarding a Northern Ireland submission to the UK Energy Strategy.

"We stated we would provide a positive paragraph for inclusion in relation to Northern Ireland on heat," she says. "I'm finding it hard to find something positive to say on heat."

Jenny Pyper
BBC

Mr Aiken quotes another memo from Ms Martin to Ms Pyper, which he says raises the question of what the minster was being told by DETI officials.

In the memo, Ms Martin says that when she "put up the submission to the minister" about BERR's early proposals on a renewable heat incentive they removed a number of paragraphs.

These included one headed "resources", including the line: "DETI cannot hope to develop this area of work with current resources."

'Hindsight is a wonderful thing'

There had been discussion between the then Department for Business, Enterprise and Regulatory Reform (BERR) - which was developing the renewable energy policy - and the Treasury about whether an RHI scheme would be regarded as a tax.

The Treasury's initial view was that the initiative was a tax, and therefore responsibility for it would have remained at Westminster.

The Treasury building
Reuters

But ultimately that was not the conclusion that was reached, and power on the scheme fell to Stormont.

"Isn't hindsight a wonderful thing?" asks Mr Aiken.

'Query over independence of consultation practice'

A government policy document in August 2008 looking at ways of helping to boost the production of heat from renewable sources listed a Renewable heat Incentive scheme as the preferred option.

It had been publicly consulting on several options, but Mr Aiken suggests that in spite of that it appears from this document that privately it had decided it was going to pursue the RHI option.

Boiler
BBC

Inquiry chair Sir Patrick Coghlin says the government was "not exactly keeping an open mind, were they?"

That, he adds, "at least raises a potential query about the independence of the consultation practice in Northern Ireland".

'Huge onus on UK to meet energy targets'

There was a "huge onus" on the UK - including its devolved administrations, of which Stormont is one - to increase its production of heat by renewable energy sources in order to meet environmental targets, says Mr Aiken.

The UK had agreed with other EU members in the spring of 2007 to move from 1.5% of renewable heat production to 15% by 2020.

Smoke from industrial chimneys
Getty Images

"There was recognition of the extent of the task to achieve that requirement," he adds, referring to government reports from the time.

"While money ought not to be wasted, there was a huge onus on the UK... to create renewable heat, to create a market and reach this target."

That paved the way for the creation of the Renewable Heat Incentive schemes in Great Britain and eventually in Northern Ireland.

'Over 3,000 pages of Great Britain RHI material'

The Department for the Economy - formerly DETI - does have many of the communications it received from and sent to DECC.

Wide shot of inquiry in session
RHI Inquiry

Mr Aiken says that what he has to say about what happened in the RHI scheme based on the contents of the documents "cannot be said to be based on a comprehensive analysis of all material as its just not presently available".

He then begins sketching out some of the Great Britain RHI material - in excess of 3,000 pages - that has been collected by the inquiry.

'Department has no record of DETI communications'

Mr Aiken explains outlines the UK government departments responsible for the Great Britain RHI scheme down through the years.

He says that the Department for Energy and Climate Change (DECC) was responsible for the GB initiative from 2008 until 2016, most of the period the inquiry is looking at, and it later became the new Department for Business, Energy and Industrial Strategy, known as BEIS.

Mr Aiken says the inquiry requested answers from BEIS to 30 questions on the extent of contact between its officials and DETI.

Sir Patrick Coghlin
RHI Inquiry

But a BEIS official replied that the department "does not hold records of any discussions" with Stormont departments about the "design or operation" of the Northern Ireland RHI scheme from 2011 to the announcement of the initiative's closure in early-2016.

Inquiry chairman Sir Patrick Coghlin (above) intervenes to note: "We know a bit more than that, don't we? We know that there were communications."

The inquiry can compel Stormont departments to provide evidence but those powers don't extend to departments in Great Britain - their cooperation is voluntary.

'Six questions for inquiry panel'

Mr Aiken says his presentation today, tracing a timetable of how the Great Britain scheme and its Northern Ireland equivalent operated and comparing the two, will prompt six questions for the RHI Inquiry panel.

The RHI Inquiry panel
RHI Inquiry

Those are:

  • Why did Norther Ireland not take part in the wider Great Britain scheme?
  • Should DETI ever have tried to create its own scheme?
  • What mechanisms were put in place by DETI to access expertise in the GB scheme?
  • Were those mechanisms sufficient and operated satisfactorily?
  • Did DETI proactively monitor developments in the GB scheme?
  • What was done by DETI with information obtained about the GB scheme?

'Direct communication with GB ministers over RHI'

Junior counsel to the inquiry Joseph Aiken begins the second week of hearings.

He'll be comparing the Great Britain RHI scheme with the Northern Ireland version, and how - or if - Stormont's Department of Enterprise, Trade and Investment (DETI) learned lessons from the other initiative.

Joseph Aiken
RHI Inquiry

"It is necessary that we do this and at this stage," he says, in order to provide context in the overall tale of the RHI scandal.

That, he says, is because the reasons for the failure of the Norther Ireland scheme are "more myriad in number and greater in complexity" than media coverage at the time when the scandal broke last year might have suggested.

He adds: "There was direct communication between the various UK departments and DETI over the RHI schemes both at ministerial levels and between officials."

What is the RHI Inquiry?

BBC News Northern Ireland

An independent inquiry into the 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.

Sir Patrick Coghlin
Pacemaker

The 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:

  • 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

Public and political concern erupted when the scale of the overspend emerged.

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.

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, and as we near a year on from that Northern Ireland remains without a devolved administration.

For more details, here's our need-to-know guide to the RHI scheme.

RHI scheme - the flaws

Catastrophic errors in the way the RHI scheme was set up left it open to abuse and as time wore on the cost of the project rocketed far beyond what had ever been intended.

Crucial methods of controlling the scheme's cost were not installed, and claimants were able to earn more money the more fuel they burned, negating the whole point of the policy behind it.

A biomass boiler
BBC

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 - the most recent estimate was £700m if cost controls are not introduced - and the bill will have to be picked up by the Northern Ireland taxpayer.

RHI scheme - what was it?

Need a quick refresher on what the Renewable Heat Incentive scheme - or RHI for short - is all about? Let us be your guides...

The disastrous green energy initiative came to the attention of the Northern Ireland public in autumn last year, and its consequences have been reverberating through the region's political sphere ever since.

Burning wood pellets
BBC

It 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

Welcome to Parliament Buildings at Stormont for week two of the Renewable Heat Incentive Inquiry.

Parliament Buildings at Stormont
AFP

Proceedings will kick off at 10:15 and we'll have a live video stream and text updates throughout the day - stick with us for the latest.