Cuts that have been made to Renewable Heat Incentive (RHI) tariffs could set a precedent to allow future cuts to any government-backed financial scheme, according to the executive chair of the group representing RHI claimants.
“If the department can change the tariff retrospectively, when it had promised it for 20 years, then it could apply the same logic to all renewable energy systems in NI, or any scheme that has government funding guaranteed,” Andrew Trimble from RHANI said in an interview with the Irish Farmers Journal.
Preparing for a judicial review
The group is preparing for a judicial review in the High Court in Belfast next week, which challenges the Department for the Economy’s decision to cut RHI payments by introducing tiered and capped tariffs.
“To me, it’s a tragedy that a green energy, carbon neutral initiative has been made toxic by irresponsible media, and by politicians and civil servants in a series of government departments that didn’t plan, and now need a scapegoat,” he said.
Approved regulations to cut tariffs
The regulations to cut tariffs were approved by the Stormont Assembly in January 2017 and became law in April.
However, this came into effect retrospectively for each RHI boiler from the last anniversary of its installation, which for many was some date in 2016.
For example, the accounts of one poultry farmer shown to the Irish Farmers Journal indicate that RHI tariffs have passed the 400,000 kWh annual cap in this business.
It means that RHI payments totalled only £27 in the last quarter, while the cost of wood pellets, bank loan repayments, servicing and electricity came to £17,200.
“I have had many conversations with members telling me about the stress they are under due to the financial circumstances,” Trimble said.
Challenged
The RHI case has similarities to a judicial review in Britain in 2011, where renewable energy stakeholders challenged the government’s decision to bring forward cuts to the Feed in Tariff scheme for solar energy.
The changes came four months earlier than originally planned, and 11 days before a consultation on the matter had closed.
The judgement went in favour of the stakeholders and the original date for tariff changes was then used.
In the legal challenge next week, RHANI wants RHI tariff rates to be returned to original levels for the remainder of the scheme.
“Our solicitors have already written to the department telling them that if the court finds they acted unlawfully, we expect the money that they would have paid under original RHI tariffs will be paid to all participants within 28 days,” Trimble added.
Consequential loss
He also points out that a separate case could potentially be taken afterwards, under consequential loss. This could be taken by companies, such as boiler installers that lost business, or RHI claimants that had to sell assets to meet boiler loan repayments due to reduced tariffs.
This would again be like the Feed in Tariff case in Britain, when the government was later forced to pay £132m in damages to 14 renewable companies in 2014, due to lost revenue caused by the changing tariff reduction date.
New scheme
Looking ahead, Trimble maintained that the group wants a new RHI scheme to open for new entrants in NI.
RHANI’s demands appear costly. However, as previously reported by the Irish Farmers Journal, RHANI is expected to argue that the overspend in NI is significantly less than the much publicised £490m figure.
Trimble also points out that if the distribution of RHI funding across UK regions was based on renewable heat capacity and not population size, a new scheme could open in NI.
“NI has 3% of the UK population, but 12% of the renewable heat capacity.
Penalties that arise if targets are missed under international climate change agreements will be paid by the UK, so funding for developing renewables should be on a national basis also,” he said.
Audits
He also continues to raise concerns about the audit process currently being carried out on RHI accredited boilers and the questions being asked by inspectors.
An initial pilot audit scheme of around 40 boilers is underway, and it is understood that all 2,126 RHI boilers are to be inspected by the end of the year.
“We have grave concern that the department will attempt to introduce data from the pilot audits into the legal proceedings,” he said.