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Summary

  1. Renewable Heat Incentive Inquiry examining botched energy scheme
  2. Veteran DETI official Seamus Hughes returns for another session at the inquiry
  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 Iain McDowell and Robin Sheeran

All times stated are UK

  1. That's all for now...

    Stormont's Parliament Buildings

    Mr Aiken draws stumps for the day - it's been a bit of a slow burn, we'd have to admit.

    Mr Hughes will return tomorrow afternoon but the inquiry will hear from a fresh face in the morning, Elaine Dolan, who was the head of internal audit at DETI between 2010 and 2014.

    Join us as 09:45 for another live session - enjoy your evening.

  2. What happened today at the RHI Inquiry?

    BBC News NI

    Poultry firm Moy Park was told of proposed changes in the RHI scheme before they had been cleared by senior DETI officials or the minister, the inquiry was been told.

    It happened in early 2015 as pressure in the scheme was starting to build but before officials realised.

    Hens in a poultry shed

    Moy Park was one of the biggest users of the initiative as more of its producers made the switch to biomass heating systems.

    It told officials another 200 chicken houses were likely to apply that year.

  3. 'Closure of scheme wasn't considered'

    In May 2015 it was becoming apparent to DETI's Mr Wightman that much more money would be needed to fund the RHI scheme than had been anticipated six months earlier.

    The anticipated spend for 2016-17 was £30m but DETI would only receive £18.3m, says Mr Aiken.

    A man using a calculator

    Mr Wightman said in an email that even if the department was to close the scheme to new applicants £22m would be needed each year to fulfil the commitments.

    But Mr Hughes says that wasn't being considered.

  4. 'Moy Park planned significant biomass expansion'

    In April 2015, Mr Hughes contacted Moy Park's David Mark - who got a mention earlier today - seeking information about the company's poultry sheds.

    Mr Mark told him that the company's producers had 782 poultry sheds, with 360 of them - 36% - already having converted to using biomass heating systems.

    It expected to achieve 60% conversion by the end of 2015 - a further 109 sheds - and its producers intended to build another 45 sheds, all of them heated by biomass.

    A biomass boiler

    Mr Mark said he expected all of the sheds to be operating 99kW boilers, which would qualify for the most lucrative subsidy available through the RHI scheme.

    Mr Hughes then contacted Ofgem to tell them to expect a significant number of new applications before the end of the year.

  5. 'Officials not alert to potential of scheme abuse'

    Wood pellets

    Inquiry panellist Dr Keith MacLean wants to know whether - in March 2015 - a tiering mechanism as a way of cost control for the RHI scheme wasn't pursued "because you felt you had something better" or if it was "omitted and forgotten about".

    Mr Hughes says the annual subsidy reduction model mentioned today was the "preferred way to go" as a way of controlling the budget.

    He accepts that DETI officials weren't "alert" at that point to the issue of potential abuse of the scheme or the overcompensation to claimants and that hadn't been in their thinking.

  6. 'Minister Foster not told of policy proposal'

    In March 2015, DETI delivered three further policy templates to Ofgem, including one on cost controls.

    It showed that the cost controls envisaged in the 2013 RHI scheme consultation document had included a trigger mechanism.

    However, DETI's energy branch now suggested that the trigger points were too prescriptive and that the department should have the right at any given point to close the scheme to new entrants.

    Arlene Foster

    Dame Una O'Brien points out that the policy template ends up with a completely different recommendation from what was in the consultation.

    Mr Aiken puts it to the witness that he and Mr Wightman came to the view that what had been proposed in the consultation was not a good idea "and you came up with what you thought was a better idea" - Mr Hughes agrees.

    Asked if there was a submission sent to the then DETI minister Arlene Foster (above) about this change of policy - she had, after all, signed off on the consultation - Mr Hughes says: "I don't believe there was at this time, no."

  7. 'Scheme cost projections could be a little conservative'

    In March 2015, Mr Wightman emailed DETI finance officials expressing concerns that more money would be needed to fund the RHI scheme because the number of applications had significantly increased and was "expected to remain high".

    At that point the monthly spend on the scheme was £800,000 and he expected that to increase by £60,000 a month, meaning that a year down the line it would be topping £1.5m.

    "My concern is that these projections might be a little conservative," he said, noting that there were about 200 applications expected to come from the poultry sector.

    Sterling banknotes

    He asked for "urgent clarification" on whether unspent money from previous years could be carried over and what the maximum budget for 2015-16 would be.

    Mr Aiken works out that from Mr Wightman's estimates there would be about £25m needed for the scheme for that year - it ultimately turned out to be more than that - and DETI was only given £18.3m by the Treasury.

    The "complete lack... of communication" between civil servants about the funding of the RHI scheme is "almost surreal", says inquiry chair Sir Patrick Coghlin.

  8. 'I see a total breakdown of system'

    In March 2015, Mr Hughes attempted to contact Treasury official Jon Parker for a steer on the budget position for the RHI scheme from 2015-16.

    Mr Parker had originally explained the nature of the funding for a possible RHI scheme in an email to DETI back in 2011.

    It turned out that Mr Parker had long since left the Treasury and was, coincidentally, working for Ofgem.

    Long shot of inquiry

    The correct procedure for Northern Ireland departments wanting to contact the Treasury was through Stormont's Department of Finance and Personnel (DFP) but Mr Hughes says he wasn't aware of that.

    He subsequently turned to the Department for Energy and Climate Change (DECC), which ran the GB RHI scheme, who told him he needed to speak to DFP.

    Sir Patrick appears exasperated by this unnecessary round-the-houses approach: "I just see a total breakdown of the system."

  9. 'In territory where interest in scheme was rising'

    The so-called whistleblower Janette O'Hagan, who tried to draw the then DETI minister Arlene Foster's attention to a key flaw in the RHI scheme, was persistent in flagging her concerns to the department.

    She emailed DETI in March 2015 to find out why nothing had been done to add tiering to the scheme as a cost control measure in order to tackle to problem of people needlessly producing heat to collect cash.

    Seamus Hughes

    Mr Hughes sent her a reply, saying that wasn't being considered at the time but may be looked at later as a "budgetary control measure".

    Asked to elaborate on what he meant by that, he says DETI officials knew they were in "territory there where... numbers [of applications] were going up" and if that rise was to continue they would need to consider the budget.

    He says the view wasn't based on any technical calculations and the officials were unaware at that stage about the scheme's overgenerosity.

  10. Time for lunch...

    Mr Hughes will be back to answer more questions from 14:00 - join us again then.

  11. 'No plan for subsidy tiering in February 2015'

    At the end of February 2015, Mr Hughes sent a number of DETI policy templates to the scheme administrator Ofgem.

    The Northern Ireland RHI scheme would be broadly brought into line with the GB scheme but with an important exception..

    Mr Aiken asks a question

    "The GB scheme does have a tiered system in operation, which we are not proposing to introduce in Northern Ireland," it says

    Mr Aiken puts it to the witness that, as of late February 2015, "there is a plan not to have tiering" and Mr Hughes accepts that's a fair point.

  12. 'Major policy change conveyed to scheme's biggest user'

    The internal Moy Park email reveals that DETI's energy team had changed its cost control plans for the RHI scheme from what had been publicly consulted on in 2013.

    DETI instead intended to introduce an annual reduction of the subsidies on offer, dropping from 6.3p per kWh to 2.1p per kWh over the course of two years.

    Stuart Wightman

    Sir Patrick queries who had made the decision for that policy change and why it was conveyed to "one of the biggest users of the scheme" after the public "had been consulted on a completely different system".

    Mr Hughes says it was Mr Wightman's (above) decision and the change was to come into force in October 2015.

    Inquiry counsel Mr Aiken says he's not aware of any document alerting more senior DETI officials to the shift in policy and Sir Patrick expresses concerns about the process.

  13. 'Efficiency of boiler, not efficiency of scheme'

    The internal Moy Park email also refers to DETI's consideration of a district heating category, which would have seen a number of buildings heated from a large central boiler.

    Mr Hughes explains that that would have solved the problem of the fitting of multiple smaller boilers to meet their heating needs - rather than someone who required an 198kW heat output installing two 99kW boilers to achieve that they would install a single system.

    A biomass boiler

    The problem with the idea is that there would have been no reduction in the subsidy paid to the scheme claimant and it doesn't take the inquiry panel too long to see that the plan was flawed.

    Claimants were "still going to get a fortune", Sir Patrick points out.

    As inquiry counsel Mr Aiken puts it, district heating would result in increased "efficiency of the boiler rather than efficiency of the scheme".

  14. 'Firm basis for Moy Park investment in scheme'

    In February 2015, the head of DETI's energy efficiency branch Stuart Wightman outlined to te major poultry producer Moy Park some of the proposed changes that the department was considering for the RHI scheme.

    He explained to Mr Hughes what had been discussed with David Mark of Moy Park and found out from the firm that there would be up to 200 applications to heat poultry houses through the initiative in the coming months.

    Hens in a poultry shed

    That would equate to about £4.4m of scheme funding, he said, which was on top of the scheme spend that had been projected some months earlier by the department.

    In an email to Moy Park colleagues, Mr Mark said that DETI's guidance gave the company a "firm basis" for RHI scheme investment and a "positive look forward".

  15. 'Didn't go off my own bat to share informaton'

    Mr Hughes replied to a theoretical question from potential RHI applicant David Hamilton regarding the possibility of fitting five boilers in one building and the subsidies that would be on offer in that case.

    The DETI official advised that changes were being considered to the subsidies that would bring them more into line with those in the Great Britain scheme in October to November 2015.

    Dr Keith MacLean

    Inquiry panel member Dr Keith MacLean asks about the usual procedure for sharing information with stakeholders, saying that there's usually a "consultation process, ...a formal response to the consultation, ...then an announcement made of what the decision is".

    He asks if Mr Hughes was given any guidance about deviating from the normal process and sharing departmental thinking.

    "Anything that I relayed in relation to that would have been agreed within the branch - I wouldn't have been going off on my own bat sharing information with anybody," he replies.

  16. 'No detailed thinking about key cost control'

    In December 2014, Mr Hughes was asked by a stakeholder if DETI had any plans to introduce a tiering of the subsidies on the RHI scheme, similar to that in the similar initiative running in Great Britain.

    Tiering is an important way of controlling the cost of the scheme and works by dropping the tariff on offer once a certain limit of usage has been reached, with the intention of preventing a claimant from overusing their heating system to collect more cash.

    Sterling cash

    Mr Hughes replied that the department had "no plans" for tiering at that time.

    That is even though Ofgem claims that it had discussed the need for cost controls with DETI officials in the months just before and Mr Hutchinson had said in his handover that tiering should be considered.

    Mr Hughes tells the inquiry that there had been "no detailed thinking" about it.

  17. 'Cost controls not discussed at administrator meeting'

    In October 2014, Mr Hughes had his first meeting with the RHI scheme administrator Ofgem.

    Dr Edmund Ward of Ofgem has told the inquiry that there was a discussion about cost controls, including degression, at the meeting.

    Dame Una O'Brien

    Mr Hughes is adamant that there was no such discussion, saying: "I am absolutely certain that meeting did not deal with cost controls."

    Inquiry panel member Dame Una O'Brien (above) asks if there is a written minute of the meeting and it appears that there was no minute taken - that's become something of a recurring theme in the inquiry.

  18. 'Cost control mechanism was to be considered'

    In September 2014, Mr Hughes was contacted by Connel McMullan of the biomass boiler firm Alternative Heat, who said he believed that the subsidies on offer through the non-domestic RHI scheme could be reviewed in April the next year.

    He asked DETI for an update on the development of the scheme and was told that the work on changes would begin in early-2015.

    A biomass boiler

    He wondered whether degression - a cost control mechanism - would be put in place and Mr Hughes told him that it would be looked at and considered.

    Mr McMullan was also informed that at that point there'd been about 270 applications in the near-two years that the scheme had been open, most of which were for biomass installations.

  19. 'Issues with scheme may have slipped under radar'

    Inquiry chair Sir Patrick Coghlin questions Mr Hughes about why he didn't ask Mr Hutchinson about the issues with the non-domestic RHI scheme that needed to be addressed.

    When leaving DETI, Mr Hutchinson provided a handover document for his successors that listed "immediate actions" that he felt had to be addressed by the end of August 2014, including adjusting the subsidies on offer - Mr Hughes believed the to-do list was unrealistic.

    Sir Patrick Coghlin

    Sir Patrick tells Mr Hughes that "you don't seem to have done anything about arranging another meeting" to discuss the non-domestic scheme.

    The witness says his priority at that time was to work on the domestic scheme - the department had been keen to get it opened - and therefore the non-domestic initiative may have "slipped under the radar".

  20. 'Meeting with predecessor solely on domestic scheme'

    Mr Hughes had no experience or knowledge of the RHI scheme when he joined DETI's energy team, which was running the initiative, in June 2014.

    He was appointed as a deputy principal and he handled the domestic and non-domestic initiatives.

    In August that year, he met his predecessor in the role, Peter Hutchinson (below), who had been the most hands-on official since the scheme was conceived, to get an overview of the work that needed to be done.

    Peter Hutchinson

    Crucially, Mr Hughes tells the inquiry that the focus of their meeting was "solely" on the domestic RHI scheme, not the non-domestic initiative, even though it had problems that needed to be addressed urgently.

    Mr Aiken quotes from the energy division plan that indicates that the meeting offered an opportunity to discuss issues about the tariffs on offer through the non-domestic scheme.

    "Consideration of tiered tariffs to prevent excessive payments - check understanding with Peter Hutchinson," it reads.