The high capital cost of hydro projects and their long pay back periods mean that a stable financial market is essential if projects are not to be left on the shelf and un-built. Interest rates, FIT degression and planning risks all conspire to make community hydro developments just out of reach for many sites at the moment.
This will be one of the themes of next week’s national hydro power conference in Perth, which will hear the latest issues around hydro development at a community scale, and will include a session chaired by Nicholas Gubbins, Chief Executive, Community Energy Scotland.
Gubbins said: ‘The Scottish Government realises that there is still enormous scope for new community scale hydro schemes which could be developed if the financial package stacks up, but FiT degression is threatening to kill this opportunity quickly, unless the UK Government changes its approach.
‘It would be hard to understate the popularity of hydro as a renewable source of power. These schemes have a very long life, minimal adverse impacts and can give communities an enduring source of income. People want them in their communities, and to know their power comes from clean hydro generation too.
“With successes like the community hydros at Mull and Harlaw we can show communities have the interest both to develop projects and raise substantial funds from local share issues.’
‘With a few tweaks to government policy and intervention we can get the package for hydro back on track. The consequent benefits of dozens of community hydro schemes around the one megawatt scale across Scotland will be very substantial.’
The Community Hydro session will include contributions from Gregor Cameron, Director, Gregor Cameron Consultancy Ltd of Cairndow, Rab Lees, the CARES Regional Manager North from Local Energy Scotland and Alex Reading, Development Director, Green Highland Renewables.