07 Mar Northern Ireland RHI scheme subsidy cut
In Northern Ireland, boiler owners under the Renewable Heat Incentive (RHI) scheme are set to face another huge cut in their payments, under new regulations announced last month.
The annual subsidy levels for the most commonly installed Biomass Boilers will plummet from around £12,000 to £2,000. Businesses in Northern Ireland will also be offered the option of a buyout.
This would mean that RHI payments would be limited to 1.2p/kWh for the first 1,314 hours on medium-sized (100kW to 199kW) biomass boilers, reducing to zero thereafter.
There are said to be around 2,100 boilers in the Northern Ireland scheme, which was suspended amidst vast political controversy in 2016. The RHI scheme was one of the main factors behind the collapse of the Northern Ireland Executive in January 2017. The was due to the exposure of its flaws and an enormous projected overspend of public money.
RHI claimants signed up to a guaranteed tariff for 20 years and banks were encouraged to lend based on the strength of a letter from former Enterprise Minister Arlene Foster.
However, the amount paid at the start of the scheme was significantly higher than the cost of Biomass fuel and hundreds of businesses piled in to take advantage. As a result, the subsidy became quickly overwhelmed and was cut several times to bring it back into line.
This latest change will see claimants receiving a rate of return on their investment of 12%, which is consistent with EU state aid approval for the scheme.
A year-long public inquiry has examined many aspects of the scheme and is due to conclude in the coming months.
Those affected by the cuts are said to be in ‘crisis mode’, according to Victor Chestnutt (UFU Deputy President).
“If these further steep cuts come into effect many farmers, in particular poultry farmers, will be facing dramatic cashflow issues,” he said.
“The proposed cuts have the potential to decimate hundreds of Northern Ireland’s farming businesses.”
Subsidy levels of £2,000 per boiler are not at all sustainable and will not cover loan repayments, maintenance or fuel.
Around half of those on the scheme are agri-businesses, many of which are poultry farms.
County Antrim poultry farmer Tom Forgrave, with 10 boilers, was one of those who received the highest amount of public subsidy.
In the first three years he got £750,000 in subsidy.
The UFU is seeking urgent meetings with the NI Secretary of State and MPs at Westminster to discuss the issue further.