By Steven Moore
A former Department of Agriculture official has told the inquiry into the RHI scheme that farmers were told in their thousands about the potential to make money from the RHI scheme – but that he didn’t think it was his role to warn DETI officials.
Cathal Ellis, a civil servant from 1984 until his retirement at the end of last year, said part of his job as a renewable energy technologist was the promotion of energy systems that could be applied across the agricultural sector.
The former official said he gave presentations at DARD events at which the 20-year RHI scheme was promoted and made no secret of the very short payback period.
On one occasion, he told the inquiry, he used a slide to show how a County Tyrone poultry farm with two 99kW biomass boilers and four 60kW boilers was on target to generate more than £23,000 in tariff income per annum.
In total, CAFRE organised almost 60 renewable energy events that were attended by 2,358 people.
Admitting DARD had no information on how the tariffs had been developed, he said he had assumed that the Department of Enterprise, Trade and Investment (DETI) had employed its own economists and technical experts to ensure the scheme was properly drawn up.
Mr Ellis said his main dealing with Peter Hutchinson, the DETI official largely concerned with the scheme, was to clear up technical queries received, many from farmers. He said he had also warned him that the agriculture industry, by its nature, would need to use the heating systems for long periods of time.
Mr Ellis said DARD had carried out its own calculations of the tariffs based on a real-life example of a biomass boiler costing £25,000 and found that it would generate £11,328 in subsidies a year – meaning the cost of the heating system would be recouped in just over two years – and putting the operator in profit for the remainder of the 20-year lifetime of the scheme.
However, he did not pass on this information to DETI himself, as he felt it was not his role to do so, and was not aware if the results of the calculation were ever shared.
Mr Ellis said installing individual 99kW biomass boilers suited mushroom producers as it removed the need for inefficient outside pipework and avoided a situation where several houses were dependent on the one power unit.
However, he said he had realised the potential for running the boilers purely for profit from
the subsidies, such as keeping them on to heat mushroom houses between harvests, when they were empty, and, in a similar fashion, heating poultry units even when devoid of chickens, but believed deterrents were in place and that such misuse would be spotted during audits.
Mr Ellis, who spent most of his career within DARD, told the inquiry he had overseen the installation of renewable energy systems at CAFRE campuses, including biomass boilers and wind turbines, and had frequent contact with installers and fuel suppliers.
He said the department had been trying to encourage farmers to take up biomass technology rather than pushing the RHI incentives.
Mr Ellis was asked how it was not realised the significant amounts of profit it was possible to make under the RHI scheme following a presentation by former Ulster Farmers’ Union president John Gilliland in 2014.
At that event on Brook Hall farm it was revealed he had spent £36,000 on a 99kW boiler and was operating it for 7,000 hours a year – resulting in RHI tariff income of £35,000 in the first year alone.
In response, Mr Ellis said he “might not have just twigged” the significance of the figures at that time.
It was possible that the low uptake of the scheme in the first year was because farmers thought it “too good to be true” initially, he conceded.
At a meeting with poultry producers Moy Park in 2014 it had been suggested to Mr Ellis that 200-300 farmers were expected to sign up.
A spike in inquiries from installers to DETI in the summer of 2015 about possible changes to the scheme, including additional cost controls, could have been sparked by Mr Ellis, he admitted.
At the time he was preparing a report on how the poultry sector was using the scheme for DETI amid reports that some were running the boilers 24/7 and had contacted installers seeking technical information.
The uptake of the scheme was already rising fast at that stage and a few months later, possibly on the back of the rumours of change, shot up.