The watchdog Ofgem confirmed to the News Letter that a biogas plant, or anaerobic digester, on a farm owned by JMW Farms in Co Armagh has had its accreditation withdrawn.
The move was prompted after SourceMaterial raised the alarm over the gaming of generous subsidies for green biogas in 2018.
The gaming of the system worked by using two small biogas plants rather than one larger plant. This boosted subsidies received by owners of the plants by 33% because smaller biogas generating stations are given subsidies at a higher rate with electricity bill payers across the UK footing the bill.
The tactic prompted fears of another major green energy scandal similar to those that dogged the Renewable Heat Initiative (RHI) which became the focus of a public inquiry.
The NI Audit Office will tomorrow issue the findings of an 18-month examination of the green energy subsidies, chiefly focusing on anaerobic digesters and onshore wind.
JMW Farms, owned by brothers Jim and Mark Wright and run from Co Armagh, built one of Northern Ireland’s first anaerobic digesters at their site outside Armagh in 2011. The Wright brothers later expanded the same plant by adding an additional generating station, doubling its capacity to 1,000kw.
But instead of telling Ofgem that it had expanded its original biogas plant, it filed for new subsidies using a different postcode that related to an adjacent road under a newly incorporated company also owned by the Wright brothers.
This meant that it could extract a third more subsidies from bill payers than ought to have been the case. Accounts filed at Companies House show that JMW’s anaerobic digester was generating revenue of £1.3m a year. The subsidy scheme, called Northern Ireland Renewable Obligations or Niro, locks payments in for 20 years so the total overpayment would have been about £6.5m had Ofgem not acted.
The Ofgem database for the scheme shows that the second plant, which the Wright brothers own through a company called Greencircle Renewables, is no longer an accredited “generating station”. Meanwhile, the last subsidies generated by the original plant were on the basis of it being a larger 1,000kw plant and were awarded at a less lucrative rate.
According to the Ofgem database, the Wright brothers’ plants have not generated any subsidies since last July. The News Letter approached the directors of Greencircle Renewables and JMW Farms, none of whom responded.
JMW Farms generated a turnover of £43m last year. Dartan Hall Holdings, Wright brothers’ holding company, of which JMW is a subsidiary, turned over £63m.
The two plants were together generating about £1m in subsidies a year – £250,000 a year more than if Ofgem had known what was happening.
The subsidy’s 20-year lifespan means that by identifying an extension of the existing generating station as a new station, JMW was able to reset the clock. That would have meant an additional £3.5 million in addition to c£3 million from earning subsidies at the higher rate appropriate for smaller plants.