Scottish hydro power industry ‘faces financial cliff-edge’ this year

Hydro power general shot Scottish renewablesScotland’s hydro-electric power sector has until the end of the year before ‘swingeing Government cuts’ make further development unlikely according to expert analysis of market financials.

Almost 65MW of small-scale hydro power has been installed in the UK since 2010 – enough to power more than 44,000 homes – but future schemes could cease to be financially viable unless UK ministers take urgent action.

A forthcoming drop in the level of support under the feed-in tariff is “horrendously steep” and could stifle new projects, claims the Scottish Renewables trade body. Developers are now scrambling to consent hydro schemes before the drop-off, with supply chain businesses booming as demand for skilled construction staff soars.

An association spokesman, said: “Hydro in Scotland is currently booming, but recent cuts, along with more set to come by the end of this year, have the potential to make further development unlikely.

“Instead of gradual, considered and measured reductions to support, we are facing a horrendously steep drop-off. Feedback directly from our industry partners suggests many projects may not survive.

“We are currently in the ‘boom’ part of an entirely predictable boom-and-bust cycle, and unless something is done soon, that could end Scotland’s hydro ambitions before they’ve had a chance to deliver their full clean energy, jobs and investment potential.”

Hydro developers also face mounting problems with grid connections and project finance – exacerbated by a two-year window in which developers must build schemes to secure support.

 

 

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