Official Report: Minutes of Evidence
Committee for the Economy, meeting on Wednesday, 17 June 2026
Members present for all or part of the proceedings:
Mr Phillip Brett (Chairperson)
Ms Diane Forsythe (Deputy Chairperson)
Ms Diana Armstrong
Mr David Honeyford
Mr Declan Kearney
Ms Kate Nicholl
Witnesses:
Ms Catriona Harkin, Department for the Economy
Renewable Heat Incentive Scheme (Closure) Regulations (Northern Ireland) 2026: Department for the Economy
The Chairperson (Mr Brett): On behalf of the Committee, I welcome Catriona Harkin back to the Committee today and thank her and her colleagues for all their work on this important issue. I will hand over to you, if you are content, Catriona.
Ms Catriona Harkin (Department for the Economy): Good morning, everyone. Thanks for having me back to the Committee. I will make slightly longer opening remarks today, because there has been a material update on the timing of the regulations, which I want to set out clearly. I have concluded — I had to make the decision last weekend — that, realistically, it will not be possible to complete the statutory process required to bring the closure regulations into force before the Assembly rises for summer recess. Fundamentally, it is a timing issue. My intention had been to bring the regulations into force before recess, and we had been working to that timetable. However, the enabling Bill has not yet secured Royal Assent. We have made every effort to progress that, but the timing of it is outside our control. That means that the regulations cannot be formally laid, which, in turn, means that the statutory steps for formal scrutiny by the Examiner of Statutory Rules cannot be completed within the available time frame.
The policy approach to the regulations remains as previously outlined to the Committee. Following engagement with stakeholders over the past couple of weeks, a number of policy issues that I mentioned when I was last here have been considered and resolved. I will outline the three that I looked at in particular with stakeholders.
The annual cap at 400,000 kWh is being retained as an important control on scheme costs. There had been some proposals relating to system configuration, particularly around what is called "plants comprised of more than one plant" and how those are managed in the scheme. I had some input from stakeholders on that, and we reached agreement that it will not change, because changing it would introduce a risk when it comes to measurement and verification of the individual components of a plant.
Proposals on biomass standards and maintenance will be considered separately. I have had some feedback from stakeholders, and I am inclined to agree with them, that we could make the standards around the quality of biomass used and the qualifications of those who can complete maintenance on installations could be more prescriptive, and I am minded to include that in guidance. We may have to bring a future amendment to the regulations, if we want to go down the road of prescribing the quality of the biomass and the maintenance. There is a lot of merit in it. It acts as an additional control.
In addition, a revised draft of the regulations has been prepared. I draw to your attention one minor change around the approach to indexation, which relates to CPI and RPI. In the previous version, we had applied CPI across all technology types. I have revised that to CPI for small and medium and RPI for large and other tech. That reflects the current regulations and how indexation is applied in GB. The cost to the scheme is not material. The difference between CPI and RPI is about 1%. RPI will apply to between 30 and 40 installations across the scheme, with a potential total of around an additional £5,000 a year over the next three years. The UK Government intend to phase out RPI by 2030.
As regards the practical implications of the updated timeline, there will be a period during which the payments cannot be made. That situation arises because the existing scheme arrangements will end on 30 June, with Ofgem's departure, and the closure arrangements cannot commence until the regulations are in force. Members should note that Ofgem has twice extended its departure date. A third time is not possible.
It is important to be clear that that situation will not result in any loss of entitlement for participants. Once the closure regulations are in place, payments will be made in full from the end of each participant's final quarterly period between April and June 2026, subject to successful onboarding and compliance with the closure arrangements. Therefore, the impact is on the timing of payments, which we are managing through careful, coordinated stakeholder engagement and communication with participants. It should also be noted that the number of participants who will be due to receive their first closure payment over the summer, before the Assembly comes back, is relatively small, at somewhere in the order of 8%. In addition, participants will have already received their payments for the peak winter payments before the end of June.
Finally, the Committee made a request about the costs and treatment of annually managed expenditure (AME). The position has been clarified further since my previous correspondence. The Department's approach is to ensure that any residual AME associated with the scheme is utilised in support of future energy policy objectives. In that context, discussions have taken place with Treasury, and agreement has been reached, in principle, to the development of a biomethane support scheme for industry using the residual AME. That work is at an early stage and will require further policy development and the usual approvals, including a full business case and agreement through Treasury and budget processes. However, the intention is clear: ensure that the funding associated with the scheme continues to be used to support energy and decarbonisation objectives. As I mentioned, that work is being carried forward by another team in the energy group, but I am happy to provide further details in writing following this session, if anyone has questions relating to the biomethane scheme.
Chair and members, I appreciate that the timing is not what we had intended. I am personally and professionally disappointed that we were unable to bring the regulations to the Assembly in advance of the summer recess, as planned. I am happy to take the Committee through any aspect of the regulations, updated timeline or implications in more detail.
The Chairperson (Mr Brett): Thank you very much for that, Catriona. On behalf of myself and the Committee, I must say that I do not think that anyone questions your commitment or dedication on this issue. You stepped forward to fill a post, and any time that you have appeared before the Committee you have been professional and diligent. I can see from your mannerisms today that you are personally disappointed by what we have got, but do not take it personally. Be reassured that, from my perspective as Chair, you have been a dedicated public servant.
I am keen to understand how we have got to this position. The Bill has reached its Final Stage, but we have not been able to bring the regulations into force. What has been the delay?
Ms Harkin: Honestly, Chair, I am not entirely sure what is happening with Royal Assent. The Bill was sent in a timely manner; it went for final sign-off for Royal Assent. We have advocated as best we can.
Ms Harkin: The Minister has written to the Advocate General and the Secretary of State, and the Secretary of State has written to the Palace. We are not aware of any barrier to or concern about the enabling Bill. It just has not been stamped.
The Chairperson (Mr Brett): OK. That is fair enough. I will pick up on the gap between payments. Ofgem will withdraw on 30 June. It will make its winter payments towards the end of this month — is that right?
Ms Harkin: It has been making its final quarterly payments between April and June. The date depends on the participant's accreditation cycle — some were paid in April and others will be paid towards the end of June — but the payment has been made to any participant who submitted their meter readings.
Ms Harkin: That is the July to September period.
Ms Harkin: About 8%. Under the closure arrangements, your annual payment becomes due on your accreditation date. About 8% of accreditation dates fall in July and August. For that 8% of participants, there will be a delay in receiving the first pro rata annual closure payment.
Ms Harkin: I will have to do quick maths. There are about 140 installations in the scheme, most of which are small or medium-sized biomass installations. The average payment for a small or medium-sized installation is nine grand. Within that group of 140, there is a cohort of installations that are inactive or submit zero meter readings. There are, maybe, 40 people who do not actively submit meter readings and therefore would not have received a payment in the past quarter. The number might be slightly higher; I may have to get you that number. For those people —.
Ms Harkin: Yes. I have not contacted the affected participants directly. I spoke to the Ulster Farmers' Union (UFU) and, yesterday, through the Centre for Advanced Sustainable Energy (CASE), to the Renewable Heat Association for Northern Ireland (RHANI) to let it know. A draft letter is ready to be issued.
The Chairperson (Mr Brett): Regarding new timescales, you hope that Royal Assent will given in the coming days or weeks and that regulations will then go to —.
Ms Harkin: We will lay them in the Assembly, send them to the Examiner of Statutory Rules and bring them before the Chamber. We have had informal engagement with the Examiner without —
Ms Harkin: — significant issues being raised.
The Chairperson (Mr Brett): If, as is likely, that happens in the first or second week of September, how long will the onboarding process take for the new system?
Ms Harkin: We will have the backlog of about 140 people. The intention is that that backlog and September's cohort of accreditations will be onboarded before October. October is a spike month, given that, while 8% of accreditation dates fall in July and August, 26% fall in October. We have staff in place to manage that, and I intend to try to find the funding to bring in a couple of additional administrative officers (AOs) to manage the backlog and get that done as quickly as possible.
Ms Harkin: In September — as soon as we get the regulations through — if we can get people onboarded.
The Chairperson (Mr Brett): You do not think that it will take until October. If we think about it realistically, however, we see that, if the regulations go through the Assembly in the first or second week of September —.
Ms Harkin: It could be the start of October. Maybe that was a case of optimism over experience.
The Chairperson (Mr Brett): We are all optimistic. We will be in a position where people who were due payments, possibly on 1 July, will get them in October. So, a three-month delay.
Finally from me, I thank you and your colleagues who have been working on underutilised AME for the biomethane scheme. I think that it is very important. What team is looking after that in the Department?
The Chairperson (Mr Brett): Does that team have an indicative hope of when that scheme might go live? I take it that it will be the next financial year.
Ms Harkin: Our permanent secretary gave an update at the Public Accounts Committee last Thursday, and I think that it is to be the next financial year, Phillip. I will have to come back and confirm that.
Ms D Armstrong: Good morning. Welcome to the Committee again, Catriona. I know how invested and committed you are to this. It is disappointing, but it is just one of those things that has happened. Hopefully, we will get to the end of this saga.
If there are participants in this scheme who are expecting payment and hardship to be recognised — that maybe does not apply to a huge amount of participants — can you step in? How can you communicate and how can you assist in that?
Ms Harkin: That is very important, Diana. The 2012 regulations are still live and will remain live until the closure regulations come into play. In the absence of Ofgem, we are not able to make the regular quarterly payments. Ofgem has withdrawn, having been administering the scheme. I may have to come back to you on this, but I think that there is a mechanism in those 2012 regulations that would allow us to make some kind of hardship payments. The challenge with that is that, whatever hardship payment we would make at that point, it would be deducted from the payments. It gets quite complicated. It is certainly something that we and I, personally, will work with the stakeholder representative groups on over the coming weeks.
Ms D Armstrong: Communication is vital. You have done good work on that.
What is the amount of AME that will be available for the biomethane scheme?
Ms Harkin: Our projected costs for the RHI closure payments are at £196 million. The AME budget annually is something like £33 million, so there will be a quantum of maybe £10 million a year available in AME for the biomethane scheme.
Mr Honeyford: Catriona, I said this to you outside, and I want to reflect Phillip's words. You have been absolutely outstanding in the Department on this and on everything that we bring. We can really sense that you are personally engaged in this. I hear your name all the time outside this Building, so I want to put that on the record. I can be hard on the Department, but you have been first class. I just want that to be said publicly.
I agree that communication is absolutely critical in this. I appreciate that a letter has gone out, but is there a strategy or a plan to make sure that all the businesses will be communicated with and that, if they have questions, there is a place for them to follow up?
Ms Harkin: There are a couple of things on that, David. Across government, we have tended to move towards email as our way of communicating. The feedback that I am getting from our participant representatives and stakeholders is that that is not ideal for all the participants. For this communication, it will be an email followed by a hard copy letter. Despite the fact that we will not be in a position to make the payments from 1 July, all of the systems that we were setting up around that — the dedicated email address, the dedicated telephone number, the FAQs and the website — are all going live to explain it. In the meantime, I will work with colleagues from RHANI and the UFU on how best to engage. I do not want to commit either organisation to anything, but I think that I could probably work with them about how they communicate with their members. We have built very positive relationships. It would be a shame to see those go, so we will keep working.
Mr Honeyford: The point that I was getting at is that there needs to be more than one form of communication, because not everybody is in the same boat. Is there a single point of contact in the Department for any of those guys?
Ms Harkin: Yes. There is a team. It is the same team that makes the payments.
Mr Honeyford: Has the arrangement with Ofgem completely finished?
Ms Harkin: I have been working very closely with Ofgem. It is very helpful. Under the terms of its contract, which was drafted in 2012, it was able to give us 150 days' notice. That was two years ago. It was supposed to have withdrawn from payments by December 2025, but it extended the contract for me to do January to March. I spoke to Ofgem again, and it extended it further for me, until April, and again until June. When it agreed to that extension, it was very clear that that was the last one. It needs some time to be able to clear up afterwards, so that we can get our data back. Every payment that is made up until the end of June has to be recorded on its system, and that has to be sent to us in the interim. Ofgem has done a lot for us. Another extension is not possible.
Mr Honeyford: OK.
Following on from what Phillip said, you talked about the payments at the start of October, which will be for the next quarter. Will those two be wrapped together, effectively, or will you get the money out the door to people as soon as you are able to?
Ms Harkin: As soon as we can get —.
Ms Harkin: Admin colleagues will be doing a lot of that work. I have a team in place, and I am going to try to bring in some additional resource to get it pushed through. Essentially, over the course of the next year, participants will get a pro rata payment for whatever that period is. We will issue payments weekly. It is not the case that we will be waiting; people will be issued with their payment.
Mr Honeyford: That is what I am getting at. If this comes through at the start of September and is ready at the end of September, will the payments go out at that point? Will there be any wait?
Ms Harkin: Yes. There will not be any wait.
Ms Harkin: Thank you so much, everyone.