Official Report: Minutes of Evidence

The Chairperson (Mr Humphrey): Mr Agnew, Mr Thompson and Mr Smyth, I invite you to make an opening statement, and then we will open up the meeting to questions from Committee members. Is that OK? Who will lead?

Mr Steven Agnew (RenewableNI): I will lead, Chair, and introduce myself and my colleagues. I am head of RenewableNI. We are the trade association for the renewable electricity industry in Northern Ireland. With me is Michael Thompson, the managing director of Everun, the wind asset management company. Michael has direct experience of some of the projects that we will discuss. Russell Smyth, a partner in KPMG Ireland, is also present. Russell led the work on the economic review of small-scale wind.

The Northern Ireland renewables obligation (NIRO) was the main policy lever used to achieve the 40% renewable electricity target by 2020; in fact, it achieved 49% renewable electricity generation in 2020, and, as the KPMG report shows, it did so at a lower cost to consumers than was forecast. In small-scale wind, specifically, there has been £400 million worth of investment in Northern Ireland, largely in rural areas, with 500 jobs created, and investors can expect to receive a rate of return of 9·7% on average. In the opinion of RenewableNI, the NIRO has been a success by every metric, and that is backed up by the KPMG report. I am happy to take any questions, Chair.

The Chairperson (Mr Humphrey): Do either of your colleagues wish to make any comments before we move to questions? Mr Thompson and Mr Smyth, are there any comments that you want to make?

Mr Russell Smyth (KPMG Ireland): No, not at this time.

Mr Michael Thompson (Everun): Nothing in addition to that.

The Chairperson (Mr Humphrey): Mr Muir, you are on mute.

Mr Muir: Apologies. I thank the witnesses for coming here today. One of the key issues that has arisen in the inquiry has been access to data sets to allow analysis of the returns on renewables obligations. The KPMG report had access to 134 data sets. Do the witnesses feel that it is right that it had access to that amount of data yet the Northern Ireland Audit Office (NIAO) did not get equivalent access?

Mr Agnew: The data set that we produced came from members of RenewableNI. To the best of my knowledge, prior to the publication of the Audit Office report, we were never asked for that data. It was in response to the publication of the report that we sought to collate the data. We commissioned KPMG to collate the data and analyse it. Since we did so and published the KPMG report, as members may be aware, we have been working with the Department for the Economy. Indeed, our members have agreed to share the data, with certain confidentiality clauses attached to ensure that no commercial confidence is breached.

Mr Muir: Do you not think that a key lesson learned is that part of the criteria for accessing the renewables obligation certificates (ROCs) should be to have access to that data to allow the Department to have full oversight of the rates of return?

Mr Agnew: It is a fair point. As I said, the NIRO has been a huge success as a scheme. I find it hard to think of many examples in government that have been as successful. Lessons can certainly be learned, however, about the Department's level of oversight where public support has been provided for industry. A lot of the data is in the public domain. I will bring in Russell to speak some more about what is available. Largely, what is unavailable has been the commercial considerations of some of our members. Russell, do you want to speak a bit more about some of the data that is available?

Mr Smyth: Yes. Thanks. We have detailed at the back of our report the key inputs to our analysis. The majority of data is from the public domain. For example, one of the key pieces of data is the amount of energy that the turbines produce. That is fully publicly available from Ofgem. We used the 100% data set for small-scale turbines. The only two pieces of information that were not in the public domain are the average capital cost expended in building one of those assets and the annual operating cost. We have, however, effectively aggregated 134 data sets, and we have provided the mean average of those. We have provided the average in the report. All that we have not done is give the breakdown of the individual 134 data sets that make up that average. Equally, I point out that the average that we came to is wholly consistent with the reviews that were commissioned by the then Department of Energy and Climate Change (DECC) in GB and the then Department of Enterprise, Trade and Investment (DETI) in Northern Ireland. The average number of around 600,000 is consistent, and the studies commissioned by the Government arrived at very similar numbers.

Mr Muir: The Audit Office estimated the annual operating cost to be £5,000, whereas the figure from the KPMG report is £38,000. There is a very significant discrepancy between the two. I am just trying to understand the rationale behind that.

Mr Agnew: There is a difference because the Audit Office figure was an assumed figure. The figure that we used is based on the average across 134 real-life projects. I certainly contend that our data in that regard is more robust.

Mr Thompson: It is maybe worth noting that Everun is an operator of turbines. That is what we do: we maintain and support them. The Audit Office-quoted figure of £5,000 per annum is, according to its report, for servicing. That is only one small aspect of the operating costs of a turbine, not least of which are things such as rates, repairs, insurance and land-leasing costs. A range of costs is involved in maintaining and supporting wind turbines annually, and the Audit Office picked one as part of its calculation. The KPMG report gives the list of what is actually involved. That is where the difference lies.

Mr Muir: I have two more questions. Some 40% of the ROCs went to about 13% of those with wind-generating capacity. I question whether that provided good value for money. I am interested in whether the view is that it did.

Mr Agnew: RenewableNI represents large-scale developers and small-scale project owners and developers. If your objective is to achieve the most renewable electricity at the lowest cost to the consumer, going for large-scale generation is undoubtedly the way in which to do that. I suppose that this is up to the policymakers, but there are other benefits from investing in small-scale generation, not least the income that it brings to rural areas through farm diversification and, indeed, decarbonising the agriculture sector.

It is also fair to say that, as we now face a net zero target, albeit that is not where we were at in 2010, we will need large-scale and small-scale onshore and offshore wind, solar and tidal. We will need all those technologies to achieve that. It is not a case of using one or the other or of choosing the best one. We need to take every advantage that we have to decarbonise our economy if we are to tackle the climate emergency. In that regard, small-scale generation has a very valuable role to play.

Mr Muir: Thank you, Steven. I agree with you about the need to meet the net zero target. Decarbonisation is a key challenge in Northern Ireland, and we need to be do more to meet that target, especially on the day that it is today. The issue for me is that confidence has been somewhat knocked as a result of some of the issues identified in this inquiry. For example, turbines were being erected without planning permission and anaerobic digesters did not have the appropriate environmental licences.

There is a perception that the Department is far too reliant on the industry, rather than being able to take decisions independently, without reference to the industry. It is important to engage and consult, but the Department needs to have that independent rigour. What are your views on that? The issues identified have knocked confidence, and it is important that that be restored. The best way in which to do that is to ensure that the Department can act much more independently, without that full reliance on the industry.

Mr Agnew: It is fair to say that, from October to December — those three months — the majority of my work was dedicated to trying to repair the reputation of an industry that, I think, was unfairly damaged. As the KPMG report shows, it is an industry that has delivered for Northern Ireland on a number of fronts.

We condemn the act of turbines being erected without planning permission or, indeed, the reference in the report of rates not being paid in some cases. Appropriate measures should be taken in that regard. Equally, it is worth pointing out that, across the, I think 1,200 generating stations that the report referred to, such incidents were very much in the minority. Indeed, if you want to connect to the grid, you must have planning permission, so a very small minority of wind turbines would not have had planning permission. I take your point and share your concern, however.

I might bring in Michael. Michael, do you want to speak to some of the harm that has been done to investment?

Mr Thompson: Absolutely, Steven. Confidence is fragile. We all know of other renewable generating technologies with which there have been difficulties in the past. As Steven says, the sector is a success. You might expect me to say that as I work in it, but I have worked in it for only the past three years or so. It is achieving what it intended to achieve, which was to stimulate the amount of renewable electricity in the sector up to 50%. That is where we are at at the minute. We have a lot further to go, however. We need to invest a lot further. That is why confidence in the industry is so important. An accurate picture of how the industry has performed to date and how that advises energy strategies going forward is really crucial.

We very much welcome the opportunity to talk to you guys and to work with the Department and others. Indeed, we will cooperate with organisations such as the Audit Office. My company was never asked to feed into the data sets for its original report. We could certainly have given it some guidance. There is commercially sensitive information at play here, so we have to be a little bit careful. We are competing against other, similar companies, so it is not a question of just providing full transparency. Rather, we have to find a mechanism by which we can be transparent in order to build confidence. As Steven said, he has worked hard to help us to rebuild confidence, but we have certainly seen missed investment opportunities. Existing operators were cautious about investing further in the last period simply because, rightly or wrongly, they did not want to attract negative sentiment. We therefore need a good, positive message to come from today's meeting. We are more than happy to be open with you for what you need to do.

I want to touch on planning quickly. I absolutely echo Steven's comments. A turbine that is put up without planning permission should not be there. It harms the rest of us if and when that happens. I do not believe that it happens very often, if truth be told, but the planning authorities have the tools to get a turbine taken down. It is not that people are recklessly putting up turbines wherever they fancy in order to make money: hat does not happen. Planning is an issue, as is rates. I cannot speak on anaerobic digestion (AD), as we do not do anything on that side of renewable generation. Thank you very much, Chair.

The Chairperson (Mr Humphrey): Thank you. Mr Agnew, in response to Mr Muir's last question, you talked about the industry's reputation being "unfairly damaged". Why do you think that was? What did you do to address the issues that were damaging it and put those right?

Mr Agnew: To take the second part of your question first, what we did was commission KPMG to conduct a full study of the small-scale wind sector and, I suppose, as much as possible, carry out recommendation 6 of the Audit Office report, which was to establish actual rates of return for the sector. The Audit Office report, I would say, speculated on what rates of return could be in the sector, based on the limited data that it had. What we did was amass a significantly more robust data set. We cannot quite establish actual rates of return, because we can do that only after the scheme ends, but we did establish expected rates of return based on actual costs.

The Chairperson (Mr Humphrey): Do you think that the reputational damage has been repaired?

Mr Agnew: I hope that it has in some way. Look, speaking candidly, I will say that it was a case of harm reduction once the media had run with the story with which it wanted to run. It is worth noting, for example, that we informed the BBC 'Spotlight' team that we would have a report within two weeks of the programme being due to air and asked whether it could delay its airing, but it had no intention of doing that. There was an opportunity for journalists to wait to hear the full picture before making their minds up. I think that the narrative was too compelling, however, and it was a case of not letting the facts get in the way of a good story, or a bad story, from our point of view.

The Chairperson (Mr Humphrey): What level of engagement have you had with the Department on the figures that are quoted in your report? Moreover, have you provided the Department with all the required underlying information in your report? Are you in ongoing conversation with the Department, and, if so, how is that progressing?

Mr Agnew: I received a request from the Department for access to the KPMG data set on 12 March. Our small-scale working group, which supplied that data, met on 23 March and agreed that, with certain confidentiality agreements and conditions in place — that the data would be accessed by only the Department and the Utility Regulator — we were content to share the data.

We then had a meeting with the Department and the Utility Regulator on 1 April to ascertain what exactly they needed. At the conclusion of the meeting, it was unclear what exactly we needed to supply to satisfy, I suppose, recommendation 6 from the Audit Office and the Department's own work.

I understand there has been a step back at this stage, and we have given our permission for Russell to engage directly with the Department and the Utility Regulator on the matter. I believe, Russell, that you have had a further meeting since the last one that I attended.

Mr Smyth: Yes. We met representatives of the Department and the Utility Regulator last week and had a very positive discussion. We went in detail through our entire methodology, our approach, our data collection methodology and our data sets. We are waiting for them, following consideration of that session, to come back with clarification on what further information they need.

We are certainly making ourselves available. We have absolutely nothing to hide. The data is being analysed very transparently, and we will support in any way that we can.

The Chairperson (Mr Humphrey): Do you have a timescale for when they will get back to you?

Mr Smyth: I had perhaps expected to have got it by now, but I am hoping that we will get clarity this week.

The Chairperson (Mr Humphrey): OK. Thank you.

Mr O'Toole: Thank you all for coming and giving us evidence today.

It is clear that small-scale wind has been subsidised more generously than large-scale wind, relative to large-scale wind in Northern Ireland and small-scale wind in other jurisdictions. Do you accept that?

Mr Agnew: When you say "more generously", I would say that it has been done according to need. As we discussed, it required greater support to make it economically viable than large-scale wind did at that time. Going forward, we are in a different position than back then. That is based on the analysis by KPMG, and I will bring Russell in on this. The level of four ROCs was necessary to stimulate the investment. Russell can speak about working on projects at the time and about just how difficult it was to secure finance.

Mr Smyth: The ROC system gives an easy measure of relative support. Large-scale wind farms receive between 0·9 and one ROC per megawatt hour of electricity generated, while small-scale wind, which we are talking about today, receives four ROCs. It is a very simple mechanism that shows that the level of support is around four times higher, so there is no question about that.

You said that Northern Ireland got higher support than other areas: I do not think that that is necessarily a correct statement. In 2010, when the scheme came in, the level of support available in GB was higher for exactly the same turbines. That evolved over time, but, for a long period, the level of support was higher. Furthermore, if you look at the total cost of electricity generated from renewables in its entirety in Northern Ireland versus renewables generated in England Wales, the cost of renewables per megawatt hour is lower in Northern Ireland than it is in England and Wales. Northern Ireland's cost base, including small-scale wind, is therefore still lower than GB's and thus represents relative value for money.

Mr O'Toole: I do not dispute any of that, but you mentioned earlier that, at one stage, subsidy for small-scale wind in GB was more generous than that in Northern Ireland, notwithstanding the fact that Northern Ireland, as a small-scale operation, faced more of a challenge getting started.

Then, post 2011, regression kicked in in GB, and that level of subsidy came down. It did not come down in Northern Ireland. Would you argue that that divergence in generosity — it does not have to be the word "generosity" — or that divergence in subsidy level was economically necessary to continue small-scale investment here?

Mr Smyth: An independent study was commissioned by DETI to look at that question, and it certainly came to a view that the level of support of four ROCs was still required to deliver the target return. In the UK, there was a cut through the regression system, and it dropped below the level of support in Northern Ireland from 2014-15 onwards. That was later criticised by parliamentary bodies, which said that it was below the level that was required. We have said in our report that it is clear that the decision to cut subsidy in GB was not driven by any concern about overcompensation but was driven by a desire to reduce the spending on renewables generally. All indications are that the level of support was still required at that time to deliver it; in fact, the 2014-15 report said that, in theory, grid costs had gone up and 4·5 ROCs would be required to deliver the same level. The Department decided against further increases.

Mr Agnew: To add to that, the decrease in support for small-scale wind was part of a wider package of a move away from onshore wind by the then Conservative Government, so it was more of a policy consideration in the context of that Government's priorities as opposed to any independent analysis of what was needed to incentivise the sector.

Mr Smyth: I will quote from a 2018 report by the UK Environmental Audit Committee. It said that, in GB:

That was a parliamentary review of that decision in 2015 in GB.

Mr O'Toole: Thank you. That leads me to my next question, which is about investor confidence. I have forgotten who, but one of you mentioned the effect of the NIAO report and subsequent media coverage on investor confidence. Are you aware of specific investment decisions that are being stalled as a result of the publicity and concern around this?

Mr Thompson: Some of our customers and asset owners have certainly cited negative sentiment as part of the reason for delaying, although I would not say that they have solely made a decision that they will not go forward.

Mr O'Toole: Is that in the last six months?

Mr Thompson: Yes.

Mr O'Toole: On the question of KPMG's detailed data sets, it is good to hear that you are engaging and that they have been sent to DFE. Have there been conversations about DFE sharing those with NIAO — if necessary, in a kind of anonymised or redacted way where commercial matters are at stake?

Mr Agnew: I will maybe bring Russell in in a second. It is fair to say that, given the Audit Office report, there is not a level of trust of the Audit Office amongst our members. That has been damaged. Rightly or wrongly, that is the case. We have shared the information with the Department and the Utility Regulator, and I hope that there is sufficient public trust in those bodies to provide independent analysis of it. That should satisfy recommendation 6 of the Audit Office report. Russell, do you have anything further on that? Again, it may be worth reiterating that most of the data is in the public domain.

Mr O'Toole: Most of the KPMG data is in the public domain?

Mr Smyth: Correct. For example, Ofgem published data on the amount of energy produced by the assets. The Department will have to come to its own view on future energy prices. The actual value of ROCs — the subsidy itself — is in the public domain. A lot of those data points are in the public domain and are fully available. There are, in reality, only two data points that are not in the public domain, and we have given the arithmetic average of those, which is all that is needed for an average return to be generated. There is not an awful lot of mystique around this data set, and the report that we published has sufficient information for anyone to replicate our calculations.

Mr O'Toole: OK. That is fine for me for now.

Mr Harvey: Your report was based on 134 turbines. Can you tell me where the various locations of those are? How were you able to determine which turbines to target and access the data on?

Mr Agnew: I will bring Russell in, but it is fair to say that the 134 turbines are located across the country. There was an average load factor of 22%, which is basically — well, Russell can explain the load factor better than I can. It is what we see as a representative and, indeed, statistically significant sample. I will pass on to Russell to go into a bit more detail.

Mr Smyth: We took a lot of time to ensure that 134 data points were representative to allow us to produce what is, we hope, a definitive and accurate answer. We took a lot of time to ensure that, for example, they contained an appropriate mix of brand new turbines and second-hand turbines, a representative mix of derated turbines and non-derated turbines and a mix of different developers, some of whom are farm-based landowners, while others are professional developers. We believe that this is a comprehensive and representative sample that will have geographic coverage across the whole of Northern Ireland.

Mr Harvey: That is good. There is a good variety of turbines as well as locations.

On the £38,000, can you give any breakdown on the costs of maintenance, or do you not have that at all?

Mr Thompson: I do not have that at the tip of my fingers, but what I can say is that there is an operation and maintenance contract. The costs will be made up of ad hoc repairs that are needed; those assets are spinning continuously and need repair. You will have a land lease to lease it, a rates bill, insurance, admin and, if you are financing it, you will have the associated financing costs. The number that we produced is also consistent, when you include all cost items, with the numbers produced by the independent reports commissioned by the Departments, both DECC and DETI, back in 2014 and 2015. Again, to give an extra level of comfort, the numbers that we came to are almost exactly in line with where those independent reports came to. I go back to the point that a lot of this information is in the public domain. There is not an awful lot of black box here; most of the information is in the public domain and can be replicated.

Mr Harvey: Thank you, gentlemen.

Mr Beggs: Thanks for your information. To start with, I want to respond to Mr Agnew's comment that the industry has viewed this as an attack on it. I certainly view it as a criticism of the operating criteria that the Department set for the industry. The industry merely operates under the criteria Governments set for it. Therefore, please do not view what we are enquiring about as an attack on the industry; it is more about how this has been set by Government.

I am trying to get my head around the balance of the cost. There has been considerable focus on the growth of small-scale wind in Northern Ireland under our scheme, when that has tailed off considerably in other parts of the United Kingdom. In 2016, for example, 170 small turbines were built in Northern Ireland and only 110 in the rest of the UK. The following year, 234 were built in Northern Ireland and only six in the rest of the UK. Do you accept that there is something significantly different that is incentivising small-scale wind in Northern Ireland that is not there in the rest of the United Kingdom? In particular, the four ROCs per megawatt hour equates to something like £218 per megawatt hour, but the electricity generated is about £40 per megawatt hour. Are those the types of figures that are involved?

Mr Agnew: I will make a couple of points and then bring Russell in. We certainly do not see the PAC's work as being an attack on the industry. Given the data that the Audit Office had available to make a statement, albeit a very qualified one, on rates of return that could be achieved, we felt that it should have been reporting that it had insufficient data to make a statement on rates of return rather than making what we see as a speculative statement. Ultimately, the attacks then came from the media, but we certainly do not see the work of the Committee as an attack.

On the growth of the small-scale sector in Northern Ireland compared with that in Britain and the rest of the UK, it comprises about 12% of the overall renewables sector in Northern Ireland compared with 12·2%, I think it is, in England and Wales. You will find that we have more wind in Northern Ireland, but there is more sun in southern England. Inevitably, you will see more solar panels in the south of England and more wind turbines in Northern Ireland. Maybe Russell can speak to that in a bit more detail.

Mr Smyth: The statistics that you quoted do not sound inaccurate. However, you are comparing different jurisdictions at different points in their development cycles and at different points in the Government policy positions. To reiterate what Steven said, overall, Northern Ireland generates circa 12% of its renewables from small-scale wind, with the balance made up by large-scale wind. In England and Wales, it is exactly the same, with 12% of their generation being from smaller, higher-subsidy generation. If you look at it more collectively rather than in a single snapshot of a year, the proportion of higher-subsidy, smaller-scale renewables is almost equal between the two jurisdictions.

Northern Ireland has had a very successful small-scale wind sector is because it has a very strong wind resource. Wind is one of our natural resources, and the idea of the ROCs scheme was to promote generation from the natural resources across the UK. For example, Scotland has a much greater resource of rivers and has three times more hydro deployment than elsewhere in the UK; the south of England has a lot higher solar resource and has twice as much solar deployment as Northern Ireland. That shows that Northern Ireland has successfully focused its energies on the resource that it has best available to it.

Mr Beggs: Do you agree that the Government have set quite a cliff edge with the funding? If it is small-scale wind less than 250 kW in size, my reckoning is that £258 per MW hour would be generated. However, if you go over that, the four ROCs dropping to one means that you only earn £94 per MW hour. That is quite a cliff edge to set in any industry. Do you accept that the Government have set tariffs that prevent anybody putting a medium-sized turbine up because there is a huge incentive for smaller ones and greater economic benefit for larger ones? Is that fair to say?

Mr Smyth: Yes, that is correct: there is a cliff edge in the design, which is a policy decision. I remember that, during the design of the scheme, there was reference to that, and the view in GB was that having too many bands and tariffs would make things overcomplicated. That is a policy decision, but you are absolutely right that there is a cliff edge in the design.

Mr Beggs: Similarly, do you accept that, in setting such a cliff edge, we are generating less renewable energy than we could by incentivising derating so that we pay greater tariffs for producing less electricity? We encourage people to downsize their production so that they get higher subsidies.

Mr Smyth: Bucketing it all into the issue of derated turbines is probably too simplistic. There are a lot of derated turbines; I think that around 30% of our data set was derated. A lot of derating is to accommodate cases where a grid connection can get to only 220 kW instead of 250 kW; it is necessary to derate to allow it to sit in. Derating itself is quite a broad concept. Equally, the use of derated turbines has allowed the sites to be more efficient and to generate from the available land resource and the available size of turbine that can fit into that piece of land to generate the electricity more efficiently.

Mr Beggs: I have a question about the KPMG report, which indicates that a typical return is 11·3% for smaller turbines and 9·7% for others. I am trying to understand how you question some of the assumptions that have been put into it, particularly a load factor of 22% when the average was 25% from 2016 to 2020. Why did KPMG use a figure of 22%, which obviously skews the figures?

Mr Smyth: We are very open in the document about the methodology that we adopted. We used the actual capacity that was achieved by all of the single turbines in the market from 2010 up to 2016; the actual capacity factor for six years of actual data. That took us up to the point that we used as the investment decision. We asked what was the historical capacity factor that had been achieved by every turbine over six years up to the point at which the average installer made an investment decision, which was 2016. That was 22%. I think that, since 2016, there has been a slight rise. You are saying that it was up to 25% in that year. It is not appropriate to take a single year's data point; some years are windier than others. We used all the data for six years up until the investment decision point of 2016.

Mr Beggs: So the actual return has been much greater than what you predicted, because the wind has been much greater?

Mr Smyth: No. There are other factors to take into account. One of the big issues is that it is not possible to determine the actual rate of return that the assets will generate. It is a 20-year investment. The principle that we adopted was, "What was known at the time of someone making the investment decision in 2016?", which was the year in which most of those turbines went up. One of the other factors that will more than outweigh any difference in the wind was that energy prices were forecast in 2016 to be a lot higher than they are now expected to be over the coming decades. We have not reduced our return expectation because of reduced energy prices, but there is significant downward movement in the actual price of electricity that those assets now capture. We fixed it at what they would have expected at the time of their investment. To keep our analysis pure and uncontaminated, we locked everything to what was known at the time of the investment decision. It is not fair to judge someone on a decision that was outside of their control and information that became known after their investment decision.

Mr Beggs: I have a second point about information that was given to us about that rate of return. Gordon Hughes from the University of Edinburgh indicated in correspondence that the average capital cost that was used by KPMG is in the upper echelon. Obviously, that will adjust the figure. Many of the small-scale turbines that are installed are second-hand, rather than being in the more expensive category, so they are perhaps lower than the figures that you have used. Is that fair?

Mr Smyth: I do not believe so. We came to an average cost per turbine of £570,000. To be clear, that is the purchase, refurbishment and installation of the asset and the wider costs involved. There is an awful lot more than just the purchasing of the asset. We found £570,000 to be the average. The majority of our data set was second-hand turbines; it is consistent with what we believe is representative. The majority of our data set and the average cost reflected that. The independent Government studies in 2014 and 2015 came to a value of £600,000, which is actually higher. Our number is coming to a capital cost that is slightly below what the Government's own numbers found. I do not believe that we have gone to the upper end of the range at all. It is the pure mathematical average of a data set of 134, which we believe is representative of the makeup of turbines in the Northern Ireland market.

Mr Beggs: There is also a question about the operating costs that have been estimated and an indication that many consider them to be high. Can you give us the typical rates? What is the figure for a typical rates bill for a 225 kW turbine? There must be a set figure. What is the land lease cost? Can we have hard figures to try to get an accurate assessment of how your £38,000 average is made up?

Mr Smyth: Michael, are you able to give guidance on your view on the average of rates costs?

Mr Thompson: I can give you a broad view. The rates are calculated like business rates, so the income that comes from the turbine is part of that determination. It will vary. We are managing turbines on behalf of asset owners, so we are processing some of that data for them, and we have shared that data with Russell and KMPG. A rates bill can be somewhere between £2,000 and £6,000 per annum for a turbine. That is a data point —.

Mr Beggs: Is that smaller turbines or larger ones?

Mr Thompson: That is turbines operating between 150 kW and 250 kW. That is the band in which we tend to operate, if that helps. Land lease costs, again, quite often will be a factor of what the turbine will actually generate — the production capacity from it. It tends to be that between 5% and 10% of the income that is generated from the turbine goes back to the landowner if it is not their turbine.

We have all provided the data on the other operating costs. The 138 in the data set is from a number of operators. We are included in that, and we all provided our actual data. We have not seen each other's data because, obviously, there is a lot of competitive edge to this. However, to give you a feel for it, I can tell you that, typically, you service a turbine twice annually. It is a large mechanical device, so you can think of it in car terms. You want to service the machinery regularly. Doing that requires sending two trained and skilled engineers to the turbine who can safely climb the turbine, which can be anything up to 50 metres high. They have to have a van stocked with equipment, and they spend a day there servicing the turbine: changing oil, changing the filters and checking it for leaks. That is just the basic service twice a year. The quoted number in the Audit Office report of about £5,000 for pure servicing is probably correct. In addition to that, there are repair costs. These are large mechanical devices high in the air, being buffeted by strong winds at times. They do break. It is as simple as that, and again we have to send engineers out there with the skills, the capability and the tools to repair them.

I will give you a feel for repair costs, because this might give you a quantum. Turbines have a gearbox in them, which is probably the most expensive single component. If that requires repair, it generally requires taking the gearbox out, which requires a crane to come on site. That means that you have to have access to the site and maintain that access. The repair of a gearbox of this type — in the 150 kW to 250 kW band that we require for small-scale wind generation — can run to anything up to £50,000 to £60,000 to take the gearbox out, have it repaired, have it reinstalled and have the turbine back operational. That gives you a feel for it.

You would hope that you would not do that every year, but, in the lifetime of a turbine, you might expect that level of repair to happen a couple of times in the 20 years. Certainly, the manufacturer would say that, after 10 years of life, most turbines should be fully refurbished again to manufacturer's spec. For instance, if you were to ask Vestas, the turbine manufacturer, it would say that, after 10 years, take the nacelle, which is the box on the top of the turbine, down, the blades come off and refurbish everything. Again, those costs are in the KPMG report as part of the lifetime cost of just keeping that turbine operational. So the repair costs are significant, and we can be at turbines every two or three weeks if something trips or if a repair is required.

Finally, you mentioned second-hand turbines and the cost of buying them. Like a lot of things, you can buy a second-hand product cheaply. The quality of it will determine how much more you spend on it over the rest of its life.

Generally, where we put up second-hand turbines, we refurbished them. Again, we de-installed the gearbox and the generator and looked at and, perhaps, repaired the blades with composite repairs. All of that money is within the £570,000 development cost. It is not as simple as saying that you can buy a turbine for 50 grand. You can, of course, but you will spend that amount every year trying to maintain it if you do not refurbish it properly.

There are a lot of operating costs. Hopefully, that gives you a flavour for them. Turbine types are different, so some will cost more than others. All the data is in the data set that the industry provided to KPMG and that it took away and consolidated. None of us has access to anybody else's data, so we trusted KPMG to take the data, consolidate it and produce the results. We had no undue influence over its exercise and processes in that sense.

Mr Beggs: That was very useful. The one figure that I did not get an estimate of was insurance. That should not be particularly confidential. Everybody will get quotes from different insurers, so everybody will know, roughly, the cost of insurance. What is the typical insurance cost?

Mr Thompson: Sure. Inevitably, there is a little bit of variability. In the early days of the industry, you could get insurance that covered repair costs, for instance. Those policies were more expensive and have tended to become unavailable as insurers realised that the cost of repairs is a lot higher. Whether you insure against business interruption is also a factor. If and when a turbine is broken or non-operational for an extended period, you can insure against business interruption as with most business insurance.

I am hedging a figure slightly off the top of my head, but insurance is probably similar to rates and in the region of £2,000 to £3,000 and up to £6,000 or £7,000, depending on the turbine. That would also cover public liability. That is just on the turbine. Companies like ours do not own the turbines, but we have insurance costs built into our cost base for employer's liability to allow our engineers to be able to climb safely up and down the turbines. After the session, I would be happy to dig out a range of insurance costs and advise you of those, but, off the top of my head, it is in the range from £2,000 to £3,000 up to £6,000.

Mr Beggs: For clarity, that £2,000 to £3,000 insurance cost just covers the public liability side of things. It would not cover machine breakdown and gaps in production. Would it?

Mr Thompson: The higher end of that would probably include business interruption, so, yes, gaps in production. Our experience is that insurance to cover repairs is pretty much non-existent in the market. Very few insurers offer that, and our insurance companies typically do not offer that.

Mr Beggs: OK. Thank you very much.

Mr Hilditch: Gentlemen, you are very welcome this afternoon. Can you justify the statement that derating turbines is innovative?

Mr Agnew: Derating turbines takes place as the technology evolves, so, in that sense, as the technology gets more efficient, you would install more efficient turbines. It is about maximising the value of the site. As members may be aware, grid connection is a highly sought-after commodity. Therefore, as well as maximising each connection, you are maximising the amount of renewable electricity from a site. Potentially, you could have one turbine producing the level of electricity that older and smaller turbines would have produced.

Returning to my earlier point, ultimately, if our goal is to achieve net zero, we absolutely need to maximise our renewable electricity output, and derating is one of the ways of doing that. I do not know whether Russell or Michael want to come in on that and add anything further. Michael may have some experience of derating turbines etc.

Mr Thompson: We do. I am not sure where the statement that it is innovative comes from, but it is a mechanism that allows you to maximise the production from a site. We need to produce more renewable electricity, so if you can produce more from an existing site by using a larger turbine that is derated, it is a good thing.
Bear in mind that, as I think Russell mentioned earlier, the capacity limits are not to do with the ROC scheme alone. There are considerable grid restrictions. On a lot of sites where the maximum available for export the grid may be 150, 225 or 250 the operator must comply with that. They can put up a turbine that does not generate at a higher level than that restricted limit, but it generates more as it gets there. We say that that is a good thing because it is a higher level of generation. It is not a given that turbines are derated to bring them into a band and that, if you did not have derating, all the electricity would go to the grid. To speak frankly, the grid would not be able to take it.

Operators have been trying to grapple with such things over the last 10 years. How do they get the most out of exporting it to the grid? What is the right turbine to put up? We have talked about second-hand turbines. You have to look at what turbines are available at the time. If all that is available is a slightly larger turbine that gets derated to fit with the requirements of the grid, that is what operators are going to go forward with.

Mr Smyth: Two quotations are relevant. When the European Commission signed off on the introduction of the four ROCS per MWh scheme, it noted:

DETI, when it introduced the scheme, said in its consultation:

The concept of derating is fully within the spirit and the intention of the scheme. The scheme is designed to encourage people to continuously increase the amount of output because they only get paid for the output that they produce. The scheme looks to incentivise that output.

Mr Hilditch: More economics than innovative.

Is it correct that some members of the scheme made self-submissions of data that was gathered for the report? How can you justify that on grounds of scrutiny?

Mr Smyth: Does that refer to the KPMG data set?

Mr Hilditch: Yes.

Mr Smyth: Where possible, as I said, we obtained the information and sourced and referenced it from the public domain. For example, the output number that we have used is not supplied by scheme members but is the actual output as recorded by Ofgem. The capital costs and the operating costs were supplied by scheme members to KPMG. We took a number of steps to ensure that they were accurate. One step was to verify the actual costs of operating maintenance and capex against original invoices that were shared with KPMG on a confidential basis. We went back to the original cost or the invoices for the turbine and the repairs etc.

Separately, we compared all our numbers with the studies previously commissioned in the sector. For example, those commissioned by DETI and DECC. Again, there was no major discrepancy. In fact, it was remarkably close to our numbers. Also, KPMG, itself, has access to other data points from its work. We were able to cross-reference and verify. We used all available information methodologies and mechanisms to verify information. We are comfortable about standing over the numbers that were utilised in our report.

Mr Hilditch: The Department for the Economy target is for 70% of electricity to come from renewables by around 2030. What is your best estimate of the contribution to that from wind turbines? Do you see that as 50% or 30% of our projected electricity needs?

Mr Agnew: To date, roughly 85% of renewable generation has been from wind. I would not expect that to change massively in the next decade, as we get towards 2030 and then move into the 2030-35 period, I think that we will see considerable deployment of offshore technologies. As things stand, the energy strategy, for example, is due only at the end of the year. An offshore project takes between eight and 10 years from conception to connection. The likelihood is that the majority of the 70% or, indeed, 80% that Renewable NI is calling for will be from onshore wind, with a significant amount of onshore solar as well. As I say, the next decade is when we will really start to see other technologies play a significant role.

Within this decade, we will see greater deployment of storage. We are starting to see that. To summarise it: the planning system has issues with storage at the minute, so battery storage will be a big facilitator for renewables in the next number of years, as well as emerging technologies such as hydrogen production.

Mr Hilditch: OK. Thank you. Were there any lessons from the scheme that the Department should consider? I know that there has been a bit of liaison with the other jurisdictions in GB. What has been learnt so far? Have you actually looked even further afield to where there is expertise — say, to Iceland, Norway, Finland, and those sorts of countries? Are there lessons to be learned? How do you view that?

Mr Agnew: I would ask members not to lose sight of the fact that it has been an incredibly successful scheme. We have achieved 49% renewable electricity in Northern Ireland. Back in my days as a Green Party MLA, often, we would look enviously at Germany. Now, we produce more renewable electricity than Germany as a proportion of overall generation. Therefore, it is an incredible good news story.

Of course, with any scheme, there are lessons to be learned. The point has been made about different agencies — again, this was a point that I made with my political hat on — saying things like, "Discharge consents should not be given to companies that do not have licences to operate or planning permission". Therefore, with regard to joined-up government, absolutely, there are lessons to be learned. Indeed, we actually welcome all six of the Audit Office's recommendations. There is not one that we disagree with. What we disagreed with was some of the methodology that was used to arrive there.

The scheme is incredibly successful. As an industry, we are not asking for it to be repeated. It was of its time and for an industry that was getting on its feet. Now, if we look at Great Britain and the Republic of Ireland, we see that the schemes that are in place to support renewables are more like price-balancing mechanisms, whereby, if the price of electricity goes up, generators pay back to the consumer. Therefore, there is a balance between the consumer and generator with regard to sharing the risk. It is entirely different from the old regime, which was a subsidy, plain and simple. The subsidy was needed to kick-start an industry that was at 3% renewable electricity generation in 2005. Now, it is at 49%. As well as that, we have created 2,000 jobs and decarbonised our power supply by 45%. Indeed, we are probably number one in Europe with regard to the proportion of our electricity that is produced by onshore wind. Therefore, it is an incredibly positive story. Yes, there are always lessons to be learned. However, I repeat what I said at the beginning: I can think of only a few Government schemes that have been as successful as this one.

Ms Flynn: Apologies to the panel, because some of these questions will seem a bit [Inaudible.]

I am sorry if I bring you back to issues that you have touched on previously. Steven, you commented on it in your earlier remarks, but could I just bring you back to the rate of return? Obviously, there was that significant difference between your claim of a rate of return of 9·7% and the Audit Office's claim of 20%. Can you break that down for me again, just to try to explain, from your point of view, how the Audit Office got its figures so wrong?

Mr Agnew: First, no apology is necessary. You have not done anything that I did not do on the Committee, back in the day, myself.

In terms of the difference between our report and the Audit Office report, I think that the Audit Office would accept that we had access to a greater amount of data. It is also worth saying that the 20% figure to which the Audit Office refers was a potential figure that could be achieved. It was speculative rather than, in my view, robust.

I will pass over to Russell to talk about the difference in methodology between his work and that of the Audit Office as we understand it.

Mr Smyth: The key feature is that we worked, and the scheme was designed, to provide an average return. Any scheme for any renewable technology will have a wide variety of returns achieved. We looked at the average return for 134, which is statistically significant to estimate for the population, so we have said "the average".

Will there be outliers that make no return? Yes. Will there be outliers that could get to 20%? Possibly. You are definitely going to be able to find outliers in examples. This scheme, like all schemes of this nature, is actively designed to achieve an average return. That is because some sites will be very windy, for example, and others will be a lot poorer than expected.

The Audit Office did not have access to the same number, and the example or quote that it provided is at very much at the upper end of the range. I think that its report did not say, "This is the average achieved". It did say, "It's possible a turbine could achieve that".

Ms Flynn: In response to an earlier question, you explained how you gathered information, how the data could be viewed as being reliable, and the process you undertook to verify some of the data. You said that scheme members supplied information, you took some from the public domain and you verified some invoices. You said that you also had access to other data points so that you could cross-reference. What were those other data points and what does that mean?

Mr Smyth: KPMG works across a lot of sectors, including the wind sector. From other engagements and mandates, we know what other assets cost to build. We have been fundraising for clients etc, so we have other data now. It is confidential, so we asked data sources for permission to use their information for cross-referencing purposes. It was an extra informal layer for us being able to get comfort that the numbers that we were getting from that other data set were sensible and in line with any other information we had available.

Ms Flynn: OK, fair enough.

Steven, I am trying to tease out a wee bit about the subsidies. Here in the North, we were, maybe, starting off at a disadvantage, so it was right to provide support where it was needed. The agreement reached by the Administrations at the outset for the NIRO scheme meant that the North would pay less towards the overall costs of the scheme. Are there other reasons why that was the correct decision to make at that stage?

Mr Agnew: That question is probably better put to the Department. As I understand it, one of the key considerations was Northern Ireland's level of fuel poverty and its level of disposable income. With vectors such as those, it was deemed to be a fair contribution from Northern Ireland consumers.

In your investigations, Russell, did you find out more of the rationale behind that?

Mr Smyth: It was a very purposeful decision by Government, which is completely unconnected to small-scale wind. The decision on the socialisation mechanism for the NIRO was taken before the concept of small-scale wind subsidisation even came about. It was about providing equalisation. I will quote from the 2010 study:

Effectively, the scheme is designed in such a way that the total cost to consumers was equalised across GB and NI. As Steven mentioned, for a number of reasons Northern Ireland has a different energy cost.

Ms Flynn: Fair enough. At the previous session, when the Department appeared before the Committee, some of the feedback from departmental officials was similar to your remarks. They saw success in the fact that the schemes exceeded targets. Throughout that meeting, they also referenced job creation.

My final question is for Michael. Earlier, Matthew made a point about the impact on consumer interest and the uptake of people taking part in the scheme at the moment. You mentioned that some people have been put off because of the public reporting and some of this conversation being in the public domain. To what extent has this put people off, Michael? Do you have a job of work to try to regain some of that public confidence?

Mr Thompson: We need to see the energy sector — renewable and all other aspects — as a real positive. It genuinely is a positive in Northern Ireland, and it would be good if we could portray it that way and move on from the negative connotations around previous renewable whatevers. Investors have a choice. They typically look at lots of different things in which to invest. Those might be in the energy sector, but they might be in a myriad of other things. Part of their decision-making process is around the rate of return that they will get and what the risk of the investment is. We have not mentioned that much in this session. When the scheme was put in place, there was a lot of risk associated with the wind system, because people did not know how it would operate or whether they would get the returns that they calculated. A lot of investment into prospect sites did not come to fruition. That sort of cost is shown nowhere in any of this data. I have a team of 25 people, and a couple of them are still looking at prospecting new sites, as well as looking at our existing sites to see if we can get more out of them. If we do not come up with projects that we or the investors we work with want to do, the money is still spent, so the risk still exists.

We need to be positive about energy. The energy strategy coming from the Executive is really important. Confidence can absolutely be rebuilt. Energy, whether that is renewable energy or the electricity-generating system in this country, could be a real shining light for us as a province and jurisdiction. We have to remember, however, that investors have a choice and that appearing on 'Spotlight' or — if I dare say it — 'The Nolan Show' is not always the most brilliant experience for people. That presents a challenge for us, if it puts people off and forms part of the investment decision. I am not saying that we should not have transparency; we absolutely should. We should do what you guys and the Department are doing to establish the facts around energy, and then we need to be positive about it. We can do that, and this is a good chance to correct things.

Ms Flynn: Thanks very much to the panel.

Mr McHugh: Tá fáilte romhaibh go dtí an cruinniú inniu. You are welcome to the meeting today I think that nearly all of the areas have been covered, particularly, to everybody's satisfaction, the success of reaching that target of 20% energy renewal by 2020.

Going forward, in hoping to achieve our target of 70% by 2030, do you think that subsidies or incentives will need to be in place to ensure that we reach those targets? If there are either subsidies or incentives, how much of the cost of that will be incurred by the consumer?

Mr Agnew: I referred earlier to the fact that the industry no longer needs a subsidy. Great Britain and the Republic of Ireland have moved to a price-balancing mechanism, essentially whereby investors will get a price guarantee over, say, 15 years, as it is in Great Britain. It all takes place through competitive auction, so generators are incentivised to bid as low as possible in terms of the level that they can deliver renewable electricity at. One report by BVG Associates on the Great Britain scheme suggests that, over the life of the scheme, a subsidy from generator to consumer of £1·5 billion will be made. Basically, the reason for that is that our members would be willing to accept a lower price for their electricity if it is guaranteed, because you are de-risking the project and it is therefore easier to raise finance. As I say, in Great Britain, it has driven down electricity prices. Indeed, Russell referred to the fact that price forecasts on electricity today are lower than what they were at the beginning of the NIRO. That is, I suspect — Russell can correct me if I am wrong — in large part because renewables have driven down the wholesale price of electricity.

Mr McHugh: You said that, in the future, these generations will maybe look at sea. Given that this is an island and given the westerly winds that we have here, I am sure that people will think that the western coast is the more appropriate location. Is that the case? What are the implications for the generation of electricity in the all-Ireland market?

Mr Agnew: We are expecting, at the end of this year, I think, the first offshore renewables auction, or the beginnings of it, in the Republic of Ireland. I think that the terms and conditions are to be agreed by the end of this year, with the auction taking place early next year. I think that we are about to see, in the Republic of Ireland, a significant step in the levels of offshore renewable generation. In Northern Ireland, unfortunately, we are a bit behind, because we have not had the policy and consents in place.

You made a point about it being off the west coast. Actually, that relates to one of the advantages with offshore. With onshore wind, we have had to put the wind in the west to provide power for the east, but, with offshore, we have the possibility of bringing generation closer to demand by siting it on the east coast. I am doing work at the minute to get a bit more evidence on it, but it will probably be about 2030 — the early 2030s — before we see those projects connecting, because, as I say, we have essentially had a policy gap since 2017 in Northern Ireland, and the energy strategy will be the beginning of us catching up. In a way, we have done incredibly well in the last decade, but, at the beginning of this decade, we are starting off behind other regions that have the price-balancing mechanisms in place. It is called the contracts for difference (CFD) in Great Britain and the renewable energy share (RES) in the Republic of Ireland.

The Chairperson (Mr Humphrey): Gentlemen, earlier in the session, you talked about confidence being knocked and reputations being unfairly damaged. In anyone's terms, a growth from 2% to 49% and 2,000 jobs being created is a good-news story. Do you think that the industry could have been doing more to ensure that that good-news story was more out there, and do you think that the criticism is justified and the reputational damage is unfair?

Mr Agnew: All members will probably be aware that it is always harder to sell a good-news story to the media. Indeed, before I came into my post, my predecessor published a report called 'The Wind Dividend', which showed that the renewables sector had not only created jobs but had reduced the net electricity bills of consumers in Northern Ireland. We delivered more renewables at a lower cost because, on the one hand, we provided the subsidy but, on the other hand, the zero fuel price of renewables brings down the overall wholesale price of electricity. That report was produced before my time. I know that it was supplied to all members, because I received it when I was a member. I am sure that there was a media release and that it did not get the level of coverage, for example, that the Audit Office report got. A bad-news story will always make more headlines. We did a media release on the KPMG report. It did not receive the same spotlight. It did receive coverage, but I think of one local journalist who did a lot of work on the Audit Office report and said that he was far too busy to look at the KPMG report. We cannot control the media, but I ask for your assistance in getting good news out there, and I appreciate the opportunity to do that today.

The Chairperson (Mr Humphrey): What impact do you think that the negative publicity that you may have received will have on hitting your target of 70% renewables by 2030?

Mr Agnew: I am pleased that the Department is holding firm in making the case for renewables, and we welcome the commitment that the Minister made in September to a target of not less than 70%. That has given confidence to the industry, because, I will be frank, the message coming from the industry was that the locational signals from Northern Ireland were poor, and that was predating the Audit Office report. Planning and grid issues and the lack of a market mechanism were sending a message to investors that Northern Ireland did not want more renewables. Indeed, when I was on the old ETI Committee and the NIRO was closing, I said, "What comes next?", and the response was, effectively, "We'll just not do renewables for a while." That message was heard, so the damage has been done, and it can be seen by the fact that we have connected no new large-scale renewables in 2019 or 2020. However, that is starting to right itself. We are starting to see a positive story again in the energy strategy and the Minister's commitment. Nichola Mallon announced yesterday that she will be reviewing planning policy in relation to renewables. I think that investors are starting to see real opportunity in Northern Ireland again. I hope that that continues.

The Chairperson (Mr Humphrey): Obviously, 49% is a good-news story for Northern Ireland, and 70% is an even better story. It is good for Northern Ireland, the environment and the consumer. If you reach that 70% target, how many jobs do you think will be created?

Mr Agnew: We are looking into commissioning KPMG to do another report about that. I do not know if Russell wants to guesstimate at this stage, but we have created 2,000 jobs to date. To reach 70% would probably take a doubling of renewable capacity, so you can imagine a similar number of jobs being created, and the 2,000 figure is solely renewable electricity solar. In case any members check their notes, I know that the Department set a figure of 5,400: that is for the clean energy sector as a whole, but there are 2,000 jobs just in renewable electricity, and, as I say, if we double capacity, you would expect to see a corresponding increase in job numbers. However, until we do that detailed piece of work, I do not want to put any kind of figure on public record.

The Chairperson (Mr Humphrey): OK. Thank you.

I ask those members who joined us remotely and have asked their questions and had them answered to lower their hands, please. Does any other member have a question? Mr Beggs, please be very brief, because you did have a long time.

Mr Beggs: I am interested in how the ROCs scheme will impact on future energy needs, particularly for powering transport. Can you clarify if you are aware whether, if the electricity generated from the renewables sector is used to generate hydrogen, ROCs will not be paid? It is important that there is an incentive to produce hydrogen for transport in the future and to ensure that energy is not simply spilled when it is not needed but is captured.

Mr Agnew: On electricity being used to produce hydrogen, the ROCs are for the production of the electricity. It can be used by any industry for whatever use. Again, anyone can step in and correct me if I am wrong on that. On spilling electricity, given that you get a price for your electricity and the ROCs are essentially a top-up on that, I do not understand what incentive there would be to do that.

Mr Beggs: I mean if there is too much electricity. I have heard in the past that the electricity could not go into the grid because there was too much wind perhaps.

Mr Smyth: Your question is maybe on curtailments. There are points where the system is unable to accommodate all the wind being generated. There are periods of curtailment where some of the turbines are turned off, which is obviously a poor use of economic resource. That is not a small-scale wind issue; that is an issue for all generating in all jurisdictions. There is opportunity to find ways of utilising that wind, potentially through energy storage or hydrogen, both of which are emerging technologies. We hope that, during the development of the Northern Ireland energy strategy that is under consultation, areas of utilising all our resources will be used and maximised.

Mr Boylan: Steven, you are very welcome. I served on the Committee with you back in the day.

I have one question. You have alluded to this; maybe you have answered it. How do you qualify your own figures and baseline in respect of data that the Audit Office does not have or did not have at the time? What is your measure or baseline in respect of all the data that you have got? The Chair asked about the number of jobs. You know that, in the past in Committee, we were asking those types of questions. How do you qualify those?

Mr Agnew: The jobs figure is Office for National Statistics (ONS) data. It is publicly available data. I quote it. Some in the industry would say that it is an underestimate, but it is an official, independent figure, so it is the one that I use. On the use of data by KPMG, I will hand over to Russell.

Mr Smyth: During the session, we have tried to give evidence and examples of where the information has come from. As we said, all our data sources are outlined in the report. The main one, as we have said, is that, if it is in the public domain, we will use official public domain data such as actual amount of energy produced. For everything else, we use multiple layers of protection and verification to ensure that it is as robust as possible. I am not sure if there are any more specific details that I can add.

Mr Boylan: Russell, is that benchmarked against other areas where it is operating, be it England, Scotland or Wales? Is that how you benchmark it?

Mr Smyth: One of the benchmarks that we used was studies commissioned by the UK Government on small-scale wind in GB. We benchmarked our data against data available from those GB studies. We used as many data points as possible to verify it, and that included GB data.

Mr Boylan: OK. Thank you.

The Chairperson (Mr Humphrey): As far as I am aware, all members who signalled that they wanted to ask questions have been facilitated. Mr Donnelly and Mr Stevenson, do you have any questions that you want to ask?

Mr Kieran Donnelly (Northern Ireland Audit Office): No questions.

Mr Stuart Stevenson (Department of Finance): Nothing from me, Chair, thank you.

The Chairperson (Mr Humphrey): I thank Mr Agnew, Mr Thompson and Mr Smyth for attending the meeting. It was a long session. Thank you for your answers.

Mr Agnew, do you and your colleagues wish to remain for the next session?

Mr Agnew: I would certainly like to stay. I am not sure if my colleagues can. We have run a bit later than expected.

The Chairperson (Mr Humphrey): In that case, I thank Mr Thompson and Mr Smyth and wish them a good afternoon.