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Policy & Regulation UTILITY WEEK | 20TH - 26TH JANUARY 2017 | 11 Analysis T his time last year, which of the fol- lowing might you have thought would be least likely to happen within 12 months? The UK voting to leave the EU, Donald Trump being elected president of the USA, or that the Renewable Heat Incentive (RHI) would topple a government? Preposterous though the first two events would have seemed to some at the start of 2016, for many the last would have been the most laughable. And yet, that is exactly what has happened in Northern Ireland (NI). Over the past year, accumulating evi- dence of drastic overspends on the renew- able heat scheme in NI has led to a scandal which, following the resignation of deputy first minister Martin McGuinness on 10 Janu- ary, brought an end to the reign of first minis- ter Arlene Foster. Indeed, it seems likely that the affair will terminate her political career. The NI Department for the Economy now believes the NI RHI scheme, which origi- nally had projected costs of £660 million over 20 years, has overspent by around £490 million as a result of some oversights within the tariff details. These allow RHI users to "burn to earn" as the scheme had no cap in place to stop incentive payments aer a cer- tain threshold of biomass output had been reached. In one case, it is thought a farmer earned £1 million by heating an empty barn. For Northern Ireland, this piece of incom- petent policy handling will no doubt stall the deployment of renewable heat and taint discussion around how to tackle the wider decarbonisation of heat – which is now acknowledged to be a missing link within energy policy – for some time. But does the scandal have broader impli- cations for the UK RHI scheme, the renewa- ble heat industry and energy policy makers? Happily, those in the know are very clear that the problems encountered in NI will not be repeated in the UK. This is because, "to its credit", government "foresaw this issue and introduced the 'biomass stepdown' to avoid the risk of heat dumping", explains Tim Rotheray, chief executive of the Association for Decentralised Energy. So, while Rotheray believes it is "inevita- ble" that questions will be asked in govern- ment as to whether the NI scandal affects the rest of the RHI system, he is also confident that concerned MPs will be satisfied by the "safeguards" in place. Other bodies close to this issue agree. The Renewable Energy Association's head of policy and external affairs, James Court, says there are "clear cost controls in place" for the RHI outside NI. He is less enthusiastic about the Whitehall-administered RHI more gener- ally, however. While Court welcomes the fact that over the past five years it has "supported the first steps towards the hugely challenging task of decarbonising the heating system", he also feels recent reforms to the RHI that come into effect this spring are a "mixed bag". Gas network operators will have been pleased that these reforms seem to support growth in the biogas and biomethane indus- try – with which they are increasingly closely involved as they seek to decarbonise the gas grid. But Court says other changes proposed by government "mean that biomass heating is set to enter a very difficult period". But the RHI only addresses a fraction of the wider challenge of decarbonising heat in the UK, being primarily a mechanism designed to support the deployment of renewables. The bigger decarbonisation of heat agenda was set to be a focal point for energy policy makers this year following acknowledge- ments in a range of influential reports in 2016 that this is critical to meeting the UK's carbon emissions reduction targets. Does the NI RHI scandal change or undermine this? Again, experts are clear that it should not. Keith MacLean, chair of the UK Energy Research Centre, says 2017's "steady as she goes" approach of government to exploring heat decarbonisation pathways is unlikely to be derailed. "2017 will be an evidence gather- ing year," he says, and a year for the launch of key live research and innovation projects – such as those at National Grid Gas Distri- bution that won funding in the most recent round of the Network Innovation Competi- tion (an Ofgem-administered scheme). That said, it is clear the RHI scandal has cast a shadow over the integrity of energy policy and its costs to consumers, just at a time when this topic is hotting up in the UK with a range of government and independent investigations into the economics of energy policy due to report this year. They will now do so under heightened sensitivity and suspicion that decarbonisation is not being conducted cost-effectively. NI government falls to RHI Will the resignation of Northern Ireland's deputy first minister in protest at its Renewable Heat Incentive (RHI), and the resulting fall of the government there, affect the UK's scheme? Jane Gray reports. February 2016 – Whistleblowers claim the RHI has overspent by millions and the NI government moves to close the scheme to new applications. An investigation into the scheme's costs is launched 2014 – The Department of Enterprise, Trade and Investment extends the RHI scheme to include the domestic sector Timeline of the scandal January 2017 – Deputy first minister Martin McGuinness resigns in protest at the "squandering" of public money. Under Stormont rules, with his resignation, Foster automatically loses her role as first minister November 2012 – Arlene Foster, then enterprise, trade and investment minister, launches the Renewable Heat Incentive (RHI) scheme in Northern Ireland. The scheme is limited to non-domestic users and has a forecast cost of £660 million over 20 years 2013 – A whistleblower raises concerns about the tariff structures behind the NI RHI and contacts Foster 2015 – A scheduled review of the NI RHI scheme by the Department of Finance does not take place due to "staff changes" December 2016 – The NI Department for the Economy states it believes the RHI overspend will cost the taxpayer £490 million. There are calls for Foster, now first minister, to resign. She resists these calls