Got a TV Licence?

You need one to watch live TV on any channel or device, and BBC programmes on iPlayer. It’s the law.

Find out more
I don’t have a TV Licence.

Summary

  1. Design of botched scheme outlined to Renewable Heat Incentive Inquiry
  2. Stormont EU expert Stephen Moore answers inquiry questions
  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...

With Mr Moore's evidence at an end - for this first phase of the investigation, at least - the inquiry knocks off early for the day.

Given that we've spent several hours examining European state aid law, that might come as a welcome relief to some.

But Mr Moore says his work is "never boring" and he's "always enjoyed it"... and us RHI nerds found his evidence session perhaps weirdly intriguing.

Stormont's Parliament Buildings
AFP

Join us again tomorrow for a full day with senior DETI figure Trevor Cooper - we'll have the usual live stream and text commentary from start to finish.

Bye for now!

What's happened today at the RHI Inquiry?

BBC News Northern Ireland

An RHI scheme tax write-off should have been part of the information sent to the European Commission in an application for the scheme to be approved, the inquiry heard.

The tax write-off was referred to in emails between two DUP advisers.

Burning wood pellets
Getty Images

DETI's EU expert Stephen Moore had to review the application before its submission to the commission.

He said that if he had know about the tax issue, which could've been explicitly prohibited under European rules, he would've "almost certainly" raised it with the Treasury.

'Brussels didn't advocate clawing cash back from claimants'

The discussion jumps forward to the period after the RHI scheme ran out of control and the European Commission's suggestions for dealing with the crisis in early 2016.

Mr Moore says Brussels did not advocate "clawing money back" from the beneficiaries.

The European Commission Building
Getty Images

It saw the scheme as worthwhile from an environmental perspective, and that it should be fixed "whilst also ensuring that the beneficiaries receive the level of compensation that they were due to receive".

The commission said that the Northern Ireland authorities would have to consider adjusting the subsidy tariffs.

"That's part of the review process that's currently ongoing," Mr Moore says.

'Everything you got was at the last minute'

The inquiry panel seems to be unimpressed by the DETI energy team's performance in applying for EU state aid approva for the RHI scheme.

"If they were hanging about in getting their application in one inference might be they don't know or appreciate the importance of getting it in," says chair Sir Patrick Coghlin.

Sir Patrick Coghlin
RHI Inquiry

Mr Moore says he had "full confidence" in the team's ability and knowledge of the state aid rules and their importance, and the notification submitted was "very good" apart from the "critical error in the biomass tariff".

"Everything you got was at the last minute!" says Sir Patrick.

'Scheme approved despite DETI's incorrect claim'

After the final state aid notification for the RHI scheme was submitted, the European Commission came back with a number of questions for DETI.

It wanted to know if there would be any tiering of tariffs, as existed in the Great Britain RHI scheme.

DETI's Mr Hutchinson replied to the effect that tiering was not required in the Northern Ireland scheme using a phrase that has become ominously familiar to the inquiry.

Mr Lunny
RHI Inquiry

"The subsidy rates were found to be lower than the incremental fuel expenses," he wrote. "Therefore no tiering is required."

Mr Moore confirms that there was evidence that that statement was incorrect.

The commission subsequently confirmed the scheme was compatible with state aid rules.

'Department's patience was wearing thin'

A man pointing at a watch
Getty Images

DETI's energy team continued its "prodding" of Mr Moore to find out when the EU state aid approval would be granted.

In one email he sent to an official in order to get a steer on the matter, he said that the energy team's "patience" was "wearing a bit thin".

'Foster applied pressure to get scheme opened'

There was "pressure" in early 2012 from the then enterprise minister Arlene Foster to get the RHI scheme open, says Mr Moore.

"We understood [from DETI's energy team] that the minister had committed to launch the scheme," says.

Arlene Foster
Reuters

Democratic Unionist Party (DUP) MLA Paul Givan asked a Northern Ireland Assembly written question in March 2012 about when the initiative would be introduced.

It was referred to Mr Moore, who was keeping across the EU state aid approval process, and he was happy to say that DETI would get the go-ahead before June.

Time for lunch...

We'll be back at about 14:05 to pick up the inquiry's afternoon session, when Mr Moore will have a few more questions to answer.

'Pretty clear I missed tiering trigger'

It was "pretty clear" that Mr Moore missed the tiering trigger in the RHI scheme, he accepts.

If he had suspected that the scheme had the potential to overcompensate claimant he "would've looked for it".

Stephen Moore
RHI Inquiry

Whenever it was pointed out to him after the scale of the scheme's disaster emerged it was "fairly obvious" to him, and he says: "I was thinking to myself: How did I miss this?'

"Undoubtedly, time was a factor in it."

'Civil servants can be complacent and too trusting'

There is a "lesson to be learned" for DETI in how it handles EU state aid appplications, says mr Moore.

"We would never want to be caught out like this in the future," he adds, making a colourful Sherlock Holmes reference, comparing himself to the dog in Sir Arthur Conan Doyle's The Adventure of Silver Blaze.

Sherlock Holmes
Getty Images

"The racehorse [in the story] is stolen and Holmes deduces by the fact that the dog doesn't bark that the person who stole the horse must've been known to the dog," he says.

"I kind of see myself as the dog [at DETI] to bark if I see anything unusual... and I trusted energy division colleagues that they had got it right."

He says that staff can become "complacent" and "overly trusting" in colleagues and "not as diligent as we might be in checking these things".

'Obviously didn't have enough time to check documents'

In February 2012, Mr Moore received two documents from Mr Hutchinson - an addendum to the state aid notification and a copy of CEPA's addendum to its economic appraisal of the RHI scheme.

Again, he was under severe time pressure to check the documents and says he "obviously" didn't have long enough.

He adds that it was a low-risk notification and shouldn't have included any anomalies.

A biomass boiler
BBC

Mr Lunny raises the by now well-known fact that the scheme's tariff for small biomass boilers was set at 5.9p while the cost of fuel was 4.3p, and that meant a tiering mechanism should have been applied.

That information was contained in the documents but Mr Moore didn't register it.

In his defence, he points out that it was buried in a table in an annex at the back of the CEPA addendum.

'I hope you got a Christmas card'

After Christmas 2011, Mr Moore began to chase up the state aid notification for the RHI scheme.

On 11 January 2012, he emailed the Foreign Office to see if there had been any progress and followed it up again a couple of weeks later but there had been no developments with the European Commission.

Dr Keith MacLean
RHI Inquiry

Mr Lunny asks him if DETI had asked him to do this, and Mr Moore says he had been "proactive" in trying to push things along.

"I hope you got a nice Christmas card from Ms Hepper for all the work you put in to get it in before Christmas," says panel member Dr Keith MacLean.

"I don't think I've ever got a Christmas card from anybody," says Mr Moore rather sadly.

'Concern that tax relief added to overcompensation'

Matters move to tax relief linked to the RHI scheme that could've had implications for whether the RHI scheme was given EU state aid approval.

At the core of the scheme was a compensation for the cost difference between generating heat from fossil fuels and generating it from renewable sources.

But if the subsidy calculation was incorrect that would result in under- or overcompensaton; in the case of ovecompensation it would raise an issue regarding the European Commission's state aid approval.

True costs must therefore be ascertained, says Mr Lunny.

A biomass boiler
BBC

He outlines a July 2015 email from then DUP adviser Andrew Crawford to fellow party adviser Timothy Cairns, in which he says the "main problem" with the scheme was that DETI had been "caught out with the profile of applications".

DETI had received a spike in applications in the proceeding few months, he said, because poultry farmers buying biomass boilers for the scheme before the end of the last tax year could get the RHI subsidy and write off their boiler investment against tax.

Mr Moore said he didn't have time to "forensically look at that type of issue" when he was dealing with the scheme, and points out that this is the first time he's seen the email between the DUP advisers.

Had he known about the matter, he would have "had quite a bit of thinking about it and having discussions" with civil service solicitors and the Treasury around it.

"I would be concerned that this would be additional state aid," he says, adding that it could "be further overcompensation", which was prohibited by the European rules.

'EU rule draft had to be checked overnight'

When Mr Moore received the draft he only had overnight to scrutinise it.

"It would normally be the case that I would have a lot more time to comment on a draft document," he says, adding that it would typically be "a couple of months during the drafting process".

Stephen Moore
RHI Inquiry

Mr Lunny puts it to him that he had little opportunity in that time to spot mistakes.

"I think that's obviously true, yes," he replies.

'DETI enegy boss's urgent order not normal'

DETI's energy team boss ordered her staff to file the EU state aid notification for the RHI scheme even though Mr Moore - the department's expert on the issue - had not had time to assess it.

Peter Hutchinson finally sent the state aid notification to Mr Moore on 19 December, telling him that the department wanted it lodged with the European Commission before Christmas.

Mr Moore said that wouldn't happen because he was just about to go off on holiday.

An email inbox
Getty Images

Fiona Hepper, the DETI energy boss, sent him an email - copying in Mr Hutchinson and others - shortly afterwards saying: "I want this submitted before Christmas... Peter and Joanne, please proceed."

Mr Moore says that what Ms Hepper was instructing "would not have been normal".

"In fact, I don't even think Peter and Joanne could've proceeded without me," he adds.

'Surprise and concern over notification delay'

Mr Moore was "surprised and I was concerned" about how long the team behind the RHI scheme was taking to submit a state aid notification.

A clock
Getty Images

"I was very conscious that it was a priority for the department," he says, adding that time lost can't be made up in dealings with the European Commission.

There were only two people working on the scheme at that stage, and inquiry chair Sir Patrick Coghlin points out that they "weren't short of work".

'Tempus fugit!'

Mr Moore "prodded" Peter Hutchinson - one of the key people who worked on the set-up of the RHI scheme - to prepare the state aid notification for the project.

In an email in November 2011, he encouraged the DETI official to get the document drafted as soon as possible because "tempus fugit" - time flies.

The RHI Inquiry
RHI Inquiry

"Not a lawyer introducing Latin into this inquiry but an engineer," Mr Lunny observes.

In an email the next day to his line manager, Mr Moore said Mr Hutchinson told him he hoped to prepare a draft notification "within the next couple of days".

Mr Moore said he had made it clear to Mr Hutchinson that even if they got the notification to the European Commission before Christmas a decision before April 2012 "now looks very unlikely".

'Overcompensation uppermost in my mind'

The potential of claimants being overcompensated through the RHI scheme was "uppermost in my mind" in his initial dealing with the project, says Mr Moore.

He says his focus would've been on whether DETI had got the "fundamentals of the tariff... right".

The RHI Inquiry
RHI Inquiry

But he didn't consider tiering, a cost control measure whereby the subsidy on offer is reduced when a claimant has run their boiler for a set number of hours.

He said he understood that the consultants at Cambridge Economic Policy Associates, which DETI contracted to draw up the basis of the scheme, were aware of what EU regulations would've required.

'I took initiative on RHI scheme work'

It appears that Mr Moore was "taking the initiative" on making DETI's energy team aware of the importance of the RHI scheme complying with the EU state aid rules, says inquiry panellist Dame Una O'Brien.

Dame Una O'Brien
RHI Inquiry

That was the case, he says, and the scheme "was on my radar screen".

"I would have a work-in-progress list and I know that RHI featured in that."

'Struggle to get EU approval before RHI start date'

In August 2011, Mr Moore obtained a copy of the state aid notification for the Great Britain RHI scheme.

It appeared to him to him that the GB scheme amounted to state aid, and given the similarities that would probably also be the case with the the NI initiative.

biomass pellets
BBC

He contacted DETI official Peter Hutchinson, copying in the other members of the department's RHI team.

"You should expect state aid approval will also be required," he told them.

"Obtaining state aid approval for our scheme in time for the scheme going live on 1 April 2012 will probably be a struggle."

'Scheme design teams must be aware of aid rules'

Teams designing initiatives like the RHI scheme "need to be aware" that it is likely to fall under EU state aid rules and must fit within them, says Mr Moore.

Sterling cash
Getty Images

He goes on: "We found it very difficult if people [setting up schemes] came to us late with something and then we turn round and say: 'Sorry, this doesn't fit the state aid rules.'"

He makes the point that sometimes the schemes that he is asked to advise on can be more generous than the aid rules allow.

'EU rules barred overcompensation'

Mr Lunny reads from what he and Mr Moore agree is "the key provision" regarding the operating aid provisions as they apply to the RHI scheme.

That allows scheme participants "a normal return on capital".

Donal Lunny
RHI Inquiry

Mr Lunny explains this is the source of a requirement in the EU's RHI scheme state aid approval of "an absence of overcompensation".

And as it turned out, overcompensation was to be the source of all the RHI's ills.

'Sole focus was on subsidy scheme rules'

There were two options for the RHI scheme - one was an up-front grants offer for claimants to buy a new renewable heating system; the other was an ongoing subsidy for operating their system over 20 years.

The latter was chosen, even though it was projected to cost hundreds of millions of pounds more over its lifetime.

Burning wood pellets
BBC

There are differing state aid rules covering the two models - a competitively-bid-for grants scheme is covered by investment aid rules; a subsidy scheme is covered by operating aid rules.

Inquiry counsel Donal Lunny asks if Mr Moore was ever consulted by DETI's RHI staff about the terms for the better-value grants option they later rejected.

Mr Moore says he was "never aware" of the grants fund option, was never asked about EU rules for it, and DETI's sole focus was on the rules on the subsidy model.

'My role to help DETI comply with EU rules'

It was the responsibility of DETI's energy team to make sure the RHI scheme complied with EU state aid rules, says Mr Moore.

Men talking in an office
Getty Images

He tells the inquiry that it is simply his role "to help them do so".

He reads cases and applications from the point of view of someone from the European Commission, checking to see that they are clear and address all of the issues covered by guidelines on state aid.

'EU State aid rules absolutely complicated'

Inquiry chair Sir Patrick Coghlin, who's a retired judge, is intrigued to hear Mr Moore say he gave advice on the EU state aid rules and procedures "but not on a legal basis".

State aid is a subdivision of European competition law, says Sir Patrick, adding: "I don't think it's doing it any disservice to say it's fairly complicated."

Sir Patrick Coghlin
RHI Inquiry

"It is absolutely complicated, yes" says Mr Moore, who trained as a mechanical engineer.

If there was any doubt about legal aspects he would refer them to government lawyers.

'Short-staffing a constant, ongoing theme'

Mr Moore's role in the RHI scheme was to advise and assist DETI's energy team that was setting up the initiative on how it should comply with regulations on state aid for the renewable energy sector.

He describes his involvement as one of a "light touch".

Stephen Moore
RHI Inquiry

At the time, DETI's state aid section was made up solely of Mr Moore and he says that was inadequate for the workload.

Short-staffing in the state aid branch was a "constant, ongoing theme" and it "took a while" for the department to "realise that was the case", when it then doubled the one-man team.

Mr Moore and his state aid colleague have a fair bit on their hands now as they handle Brexit issues for the department.

New witness Stephen Moore gives evidence

Stepping up this morning is Stephen Moore, who works for the Department for the Economy - formerly DETI - as an expert on EU state aid.

Stephen Moore taking the oath
RHI Inquiry

After taking the oath, he confirms that he's submitted more than an thousand pages of documentation to the inquiry.

You'll find Mr Moore's written statement to the inquiry here.

What happened yesterday at the RHI Inquiry?

BBC News Northern Ireland

Civil servants were "furious" when they discovered the development costs for the RHI scheme looked set to double, the inquiry was told.

Sterling banknotes
Getty Images

Fiona Hepper, the energy boss at DETI, demanded that costs be cut.

In response the administration team "sharpened up" the estimates, cutting them by several hundred thousand pounds.

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 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.

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

Arlene Foster
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.

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.

Wood pellets
BBC

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

The massive overspend bill - whatever it turns out to be - 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.

Burning wood pellets
BBC

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

It's a brisk, damp but bright morning on the hill at Stormont.

Stormont's Parliament Buildings
AFP

We'll be kicking off today's live coverage of the RHI Inquiry shortly with morning's witness Stephen Moore.

He worked for the Department of Enterprise, Trade and Investment (DETI) in European support... so expect to hear plenty about EU state aid regulations!