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Taoiseach Leo Varadkar welcomes DUP leader Arlene Foster to Dublin. Brian Lawless via PA Images
cash for ash

Leo is setting up his own Renewable Heat Incentive - but what will be different?

The North’s cash-for-ash scandal, which revolved around the Renewable Heat Incentive, brought down the Stormont Assembly.

IRELAND IS GOING to get its own version of the North’s controversial Renewable Heat Incentive that brought down the Stormont Assembly earlier this year – but with a few important changes.

The scheme was announced in the government’s National Mitigation Strategy, an environmental plan which was announced after Leo Varadkar took over as Taoiseach, hailing it as the “first step” in his government’s path towards renewables, low-emissions, and sustainability.

That roadmap to renewable energy isn’t entirely surprising – although the climate change issues aren’t exactly vote winners, there is an annual fine of €75 million that is looming over Ireland if it doesn’t hit the EU’s green-energy and low emission targets by 2020, which still seems like an increasingly daunting task.

Varadkar – following the lead of his youthful European counterpart French President Emmanuel Macron - is also very vocal on the importance of climate change issues and the need to act fast.

“Climate change is one of the greatest challenges we face,” Varadkar said in an article outlining his vision for Ireland.

“It is an issue for all countries and we need to work to ensure that electric vehicles become commonplace in Ireland, supporting cycling, producing more renewable energy such as wind and solar, and encouraging homes and businesses to invest in renewable heat.”

That last point is referring to the Irish government’s Renewable Heat Incentive or RHI – if that sounds familiar, it’s because the North’s version of the same scheme has been making headlines for the past nine months.

General Election 2017 aftermath DUP leader Arlene Foster speaks to the media outside 10 Downing Street. Dominic Lipinski via PA Images Dominic Lipinski via PA Images

In January, the late Martin McGuinness resigned from his role as deputy leader of the Stormont Assembly as a consequence of the cash-for-ash scandal, which revolved around this same scheme.

The RHI scheme encourages businesses and households to switch to more environmentally friendly heating methods through financial incentives.

But the subsidies paid to companies were not capped – meaning the more heat a business generated, the higher the subsidy it received. There were reports of businesses leaving the heating on all through the day, opening windows to cool down offices so that they would be entitled to more funding from the Stormont government.

The exploited, failed scheme is expected to cost taxpayers around £500 million – not to mention the political turmoil that ensued as a consequence.

So Ireland’s Department of Communications, Climate Action and Environment is now bringing in its own version, but has told that it’s learned lessons highlighted by the crisis in the North, of course.

shutterstock_539897029 FabrikaSimf via Shutterstock FabrikaSimf via Shutterstock

In a statement, Minister for Communications, Climate Action and Environment Denis Naughten said that the North’s “Renewable Heat Incentive scheme has attracted considerable negative publicity”.

“The lessons learned from the Northern Ireland scheme are being integrated into the design of the Renewable Heat Incentive,” Naughten said.

The main points of difference between the two, he added, would be:

  • Eligibility criteria that projects must conform to over the period of support which will ensure that heat generated under the Renewable Heat Incentive is applied to useful purposes only
  • Sustainability criteria which will be at least as stringent as those which apply to Bord na Móna Bioenergy in order to ensure sustainable biomass use
  • A number of budget management mechanisms including project budget caps that will ensure value for money for the exchequer.

Why do we need the scheme?

The aim of the scheme is to help Ireland reduce its 12% target in the renewable heating sector by 2020. Provisional data indicates that 6.6% of heat demand was derived from renewable sources in 2016, which means we need to double that in the next two years to hit those all-important targets.

The department said that a number of important factors are still under consideration including the overall cost, technologies and the general design.

The findings from a public consultation on the scheme, which closed in March this year and where 119 submissions were made, are currently being evaluated to help inform a final decision.

“It should be emphasised that the introduction of any scheme would be subject to government approval and State aid clearance from the European Commission,” Minister Naughten said.

Read: By 2018, transport fleets like Bus Éireann will have green energy buses

Read: Banning diesel and petrol cars from cities could help Ireland hit clean energy targets

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