Biomass boilers bought as part of the Renewable Heat Incentive (RHI) scheme in Northern Ireland have been left to “gather dust” after cost controls were introduced to limit subsidies for their use, MPs in London have been told.
A representative from the agriculture industry told the Northern Ireland Affairs Committee that 30 per cent of businesses and farmers have now turned the boilers off, with many going back to burning fossil fuels.
MPs were told that more than 800 participants in the botched green energy scheme have abandoned it, although officials from Stormont’s Department for the Economy disputed those figures.
The committee also heard calls for the Northern Ireland scheme to be merged with the RHI scheme operating in the rest of the UK, which pays higher subsidies.
The RHI scheme, set up in Northern Ireland in 2012, incentivised businesses and farmers to switch to the eco-friendly boilers by paying them a subsidy for the wood pellet fuel needed to run them.
But mistakes in its designs saw the subsidy rates set higher than the actual cost of the wood pellets, with applicants finding themselves able to burn to earn.
With Stormont facing an overspend bill of hundreds of millions of pounds, cost-control steps were taken in 2019.
In 2021 a public inquiry identified a multiplicity of mistakes in the running of the scheme.
Earlier this year the UK Court of Appeal ruled that the payment cuts were lawfully made to prevent a crisis in public finances.
Senior judges accepted boiler owners who signed up to the initiative had a legitimate expectation that tariff rates were guaranteed for 20 years.
But they held that this belief could be legitimately frustrated due to the wider public interest in protecting the Northern Ireland budget.
The committee is investigating the implications of the Court of Appeal ruling.
Andrew Trimble, executive chairman of the Renewable Heat Association NI, told MPs there has to be equity between those in the Northern Ireland scheme and those who participate in the UK-wide scheme.
He said that more than 800 out of 2,128 participants have left the Northern Ireland scheme.
He said: “There is an overwhelming argument that the scheme should never have been established in Northern Ireland.”
Christopher Osborne, senior policy officer at the Ulster Farmers’ Union, said: “The very clear message is that Northern Ireland is currently at an environmental and economic disadvantage.
“We do not have any decarbonisation schemes in Northern Ireland to help us meet any targets that are coming.”
“Since these tariff reductions have been in place in relation to RHI we have had it from one of the major gas suppliers in Northern Ireland that the use of LPG (liquefied petroleum gas) has increased by 20 per cent. Fossil fuel use has increased by 20 per cent.”
Roger Pollen from the Federation of Small Businesses said there is a “lot of merit” in Northern Ireland joining the scheme in Great Britain.
He said: “There is recognition that we didn’t do it well when we went solo.”
Mr Osborne said: “It has been brought to our attention that 30% of boilers were turned off (after tariffs were reduced) and between a third and a half of those are poultry. There has been no choice but to go back to burning fossil fuels.”
DUP MP Carla Lockhart asked about the difference in payments in the Northern Ireland scheme and the one in the rest of the UK.
Mr Trimble said: “In Larne, £2,200. In Stranraer, £50,000.”
Mr Osborne said: “There are boilers out there, we are hearing, people have put them on Gumtree and they are not getting anything. They are gathering dust.
“In the 21st century for an industry to be seen to be increasing its fossil fuel use by 25 per cent by no fault of their own is unbelievable.”
The committee later heard evidence from Department for the Economy officials who were asked if they are concerned about people leaving the RHI scheme and going back to fossil fuels.
Permanent secretary Mike Brennan said: “One of the witnesses said that 800 participants had left the scheme. That is not our figures.”
The department’s head of energy policy Richard Rodgers said: “The official number is that 230 participants out of just over 2,000 have left the scheme.
“One hundred have left since the new tariff was put in place in 2019.
“It is fair to say there has been a reduction in usage because effectively the tariff incentivises people only to use the heat that they need. That was part of the cost-controls that were put in.”
Referring to the agriculture sector, he said: “It is no surprise to hear that there has been an increase in LPG because there has been an increase in chicken production.
“It would have been great to have seen a lot more of that being in biomass or renewable fuel but we stopped it (at) around 2,300 participants. It was the intention that it would have been far more but the scheme closed and the legacy is there.”
Acting committee chairman Robert Buckland asked if it would not be simpler to use the GB model in Northern Ireland.
Mr Brennan said: “That is a question internally we have often thought has a lot of merit, not just for equity and fairness reasons but for simple administrative reasons.”
