Small hydro-power operators furious over ‘damp-squib’ Barclay Review of Scottish business rates

The Barclay Review into business rates in Scotland has failed to tackle the fundamental problem faced by the hydro industry in Scotland, according to Scottish hydro-power industry leaders.

Alba Energy and the British Hydropower Association have both called on the Scottish Government to act quickly to bring non-domestic rates for the hydropower industry into line with that paid by industries of commensurate scale, most particular the wind sector, which may be achieved by a minor clarification of – or amendment to – Plant & Machinery legislation.

Industry representatives also said that they do ‘not want relief – just fairness’.

The Barclay Review focuses on the implementation of government relief schemes, when what is actually required is a fair system of valuation to bring the non-domestic rates system into the modern era, so that local taxation of industry reflects the complexity of modern business

Instead of proposing solutions to a crisis in the renewable energy system, the Barclay Review simply suggests further investigation of the Plant & Machinery Order – key legislation determining Rateable Values for energy sites – and offers no prospect of change until 2022.

The valuation methodology is a devolved matter, prescribed by Scottish Government legislation (Plant & Machinery order).

“Small hydro” is here used to define hydro projects that fall within the Feed-in-Tariff scheme, which includes hydro sites of up to 5 megawatts of generating capacity.

Feed-in-Tariffs were introduced to pay back the development costs of building hydro schemes, but have been calculated by assessors as simple income.

Adrian Loening, Chairman of the British Hydropower Association, explained: “The much-hyped Barclay Review does little to challenge the Scottish Government to bring non-domestic rates legislation into the 21st century.

“After an entire year of consideration, all the report offers are minor amendments and further reviews – all too little, or too late, for the beleaguered hydropower industry in Scotland.”

Martin Foster, Chairman of Alba Energy, representing independent Scottish hydro operators, said: “For the last five years, the small hydro industry has repeatedly reported and appealed a crisis in methods used to generate rateable values for small hydro – which have now increased by hundreds of percentage points, out of all proportion to the small wind sector.

“Ken Barclay and his team have had a year to investigate, but have produced little of significance for independent hydropower operators.”

The British Hydropower Association is the trade membership association representing the interests of the UK hydropower industry. Alba Energy is a collective of independent hydro operators in Scotland.

For more information contact: Simon Hamlyn Chief Executive British Hydropower Association Tel 07788 278422

24 Aug 2017

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