The small-scale hydro power industry is calling on the Scottish Government for a rethink on its temporary business rates review – which trade body the British Hydropower Association describes as ‘unfair and divisive.’
Last month the Scottish Government announced a 12.5% limit on business rates increases for hydro schemes up to 1MW for 12 months until 31 March 2018 – in response to industry-wide protests over the impact of the business rates review.
However the Scottish Government has thus far refused to offer relief to schemes between 1 and 5 MW – projects which still meet the official definition of small-scale hydro.
Simon Hamlyn, Chief Executive of the British Hydropower Association, explained: “Along with other renewables associations, we have been engaging with the Scottish Government for some time and are pleased they recognise the impact the rates revaluation, as originally proposed, would have on the Scottish hydro sector.
“However whilst we have welcomed the interim relief for the smallest schemes, it is clearly unfair and divisive to refuse relief to schemes between 1 and 5 MW.
“A number of these schemes will see rates rises of more than 400 percent – with, for example, one operator seeing their rates bill soar from £49,000 to £200,000 per year, a leap of over £150,000.
“We could see the scenario where some schemes will be operating solely to pay the rates bill, whilst other nearby schemes will be getting rates relief. It does not make sense.
“In addition, the Scottish Government has still not clarified how relief will apply to schemes which have not yet had a rateable value set.
“The hydropower industry in Scotland has no objection at all to paying business rates – but the methodology being applied by Scottish Assessors just does not make sense. They are attempting to put a nominal rental value on each scheme, but the numbers just do not add up.
“Despite meetings with Scottish Assessors we have got nowhere in achieving rateable values which are fair, consistent, logical and sustainable.
“The industry has already responded to the Barclay Review into business rates – but our response was submitted long before the current situation unfolded.
“At its heart, we still believe the rateable value system is not fit for purpose for hydro, and would like to work constructively with government and assessors to find a long-term solution for the whole industry, which supports a significant number of local jobs across Scotland and many of which are in rural communities.”
The British Hydro Association is holding its annual dinner in Glasgow on 30 March 2017. For booking details, see advertisement on the home page.