Scottish small-hydro power sector wins permanent 60% cut in business rates in ‘David v Goliath’ battle with Scot-Govt

In a victory for the small-hydro power industry in Scotland, the Scottish Government is today due to announce that with effect from 1 April 2018 it will introduce a new 60% relief for hydro schemes with a rateable value up to £5 million.

Owners and operators of hydro projects have welcomed further support from Government in their campaign to ensure the viability of renewable energy schemes in the face of business rate rises, with help from Galbraith, the leading independent property consultancy.

In response to the hydro industry’s concerns over significant increases in business rates following the 2017 rating revaluation, the Scottish Government introduced interim measures for the financial year 2017-18 to provide transitional relief for schemes less than 1MW.

Subsequently, in response to the Government-commissioned Barclay Review of the Scottish non-domestic rating system, Finance Minister Derek Mackay announced a pledge to review the underlying legislation as it relates to hydro and the introduction of a new relief to reduce liabilities.

A Scot-Govt spokesman said: “Renewable energy is one of Scotland’s most important industries, creating jobs and investment opportunities while delivering secure, low-carbon, cost-effective energy.

“We are committed to reducing carbon emissions, and the development and promotion of renewable energy generation is one of a number of measures aimed at tackling this issue.

“Decreasing the non-domestic rates payable on these properties should increase the attractiveness of renewables technologies as a means of energy generation. This should, in turn, promote greater energy generation in the sector and a reduction in carbon emissions.”

Further details of Government’s wider support for this industry have yet to be published pending the outcome of a committee recently commissioned to review the Plant and Machinery Regulations which impact upon the valuation methodology.

Calum Innes – a Partner of Galbraith, assisted the British Hydro Association and the Scottish group of hydro operators, Alba Energy – in their talks with Government to find a long-term solution.

He explained: “After long and detailed discussions, it became clear that the valuations imposed by assessors in connection with the 2017 revaluation would – unless special measures were undertaken –  threaten the viability of many schemes and possibly the continuation of the hydro industry in its current format.”

7 Mar 2018

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