Proposals are being developed by officials in the Department for the Economy to allow changes to be made to the Renewable Heat Incentive RHI to reduce the cost of the scheme to the NI Executive.

The scheme closed to applicants in February 2016 after a significant overspend emerged.

Current estimates put the cost of RHI over 20 years at £1.18bn with apprxomiately £405m of this to be covered by the NI Executive.

Speaking in the Assembly on Tuesday, Minister for the Economy Simon Hamilton said that legal advice was being sought on making cost-cutting changes to the scheme.

Consultation

“I plan to bring a proposal to the Assembly in due course and issue a consultation document as early as I can in the new year,” he said.

It remains unclear what the potential changes relate to and if it is possible for changes to be made to signed contracts with RHI accredited boiler owners, which have set tariffs agreed for 20 years.

Speaking at the Public Accounts Committee last week, Department of Finance Permanent Secretary David Sterling said that the costs of the scheme could be reduced.

“There’s a limit to what we can say about how we might do that or go about that for legal reasons,” he said.

Mark Cockburn, from Cambridge Economic Policy Associates, told MLAs on the Public Accounts Committee last month that changes to legislation could reduce the total cost of the RHI.

Subsidy schemes

“I have looked at a number of different subsidy schemes and most of them are set up in law, they are not a contract, and basically laws can be changed,” he said.

A NI Audit Office report highlights that there are 2,128 non-domestic biomass boilers in NI accredited under RHI. A large uptake of the scheme came from the poultry industry for heating houses.

Minister Hamilton also said on Tuesday that the Department is looking at the potential for stronger enforcement of scheme regulations “so that abuses of the scheme are addressed as effectively as possible and any possible fraud cases dealt with rigorously”.

Again, it is unclear how many installations are actually in breach of the agreed contracts and what evidence could be made available to support claims of non-compliance.