Tyrone farmer gets over £600,000 from NI heat scheme…using 13 boilers

The Belfast Telegraph has reported today that a Co. Tyrone farmer and businessman, who runs a poultry enterprise, is the largest single recipient of funding under the North’s ill-fated Renewable Heat Incentive (RHI) scheme.

Details of businesses and individuals who draw down funding, under the scheme, were published by the North’s Department for the Economy yesterday.

Paul Hobson’s chicken farm is located near Dungannon. It has 13 ‘funded’ boilers – all of which burn wood pellets.

According to the figures, Mr Hobson has already received £659,540 from his 13 boilers up to end of last month. No other recipient from the scheme got as much; nor does any other recipient have as many scheme-funded boilers running. Some of the boilers were installed in 2013; others were commissioned in 2014. His total projected draw-down from the scheme will likely run into millions.

The Belfast Telegraph says that DAERA (Department of Agriculture, Environment and Rural Development) had used Mr Hobson’s installation as a “successful example” for other farmers to follow.

The so-called and now-infamous ‘cash for ash’ scheme based payments on the volume of wood pellets burned, without imposing appropriate caps. This encouraged users to keep their boilers going for as long as possible, regardless of the need for heat.

Many of the recipients are on 20-year contracts. According to the Belfast Telegraph, for every £1 (worth) of pellets they burn they are set to receive £1.60 from the taxpayer. Pundits have estimated that the scheme, if a suitable fix cannot be implemented, could end up costing between £400m and £500m.

Scheme for the ROI

Meanwhile, the final consultation phase of the Renewable Heat Incentive (RHI) scheme for the Republic of Ireland was due to close this month. The consultation phase had been launched by the Minister for Communications, Climate Action and Environment, Denis Naughten.

Speaking about potential opportunities for farmers, Minister Naughten said: “In the past, farmers have explored the potential market opportunities in the bioenergy space and many decided not to pursue this avenue until the market was more mature.

As a demand-side measure, the RHI scheme will aim to give the bioenergy and biomass sector the market in renewable heat production that is needed to encourage farmers to take the next step.

“However, for this intervention to be successful it is critical that supply-side policies must be aligned with the demand-side measures that my Department is developing.”

Renewable Energy Goals

Cleaner heat is a part of Ireland’s renewable energy policy objective and the introduction of an RHI scheme for Ireland is a commitment in the White Paper on Energy and the Programme for Government.

It is hoped that the RHI scheme will become available at the end of 2017, subject to Government and State Aid clearance.

The overall RHI scheme will be designed so that it ensures value for money for the taxpayers, who are being asked to pay the cost of the RHI subsidy.

“Therefore, the RHI scheme I am proposing will have a budget cap mechanism and a mechanism to reduce the amount applicants get paid over time built-in from the start, so the more you burn, the less you earn,” the Minister said.

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