Hydro energy to enjoy two-year boom before "cliff-edge" drop

by Search Gate staff. Published Tue 12 May 2015 11:41
Scottish hydro sector faces uncertain long-term future
Scottish hydro sector faces uncertain long-term future

Scotland’s hydro sector has until the end of the year before swingeing Government cuts “make further development unlikely”, according to an industry expert.

The stark warning comes a month ahead of Scotland’s largest hydro conference, held by business organisation Scottish Renewables in Perth on June 2.

Almost 65MW of small-scale hydro 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, according to Scottish Renewables.

Developers are now scrambling to consent hydro schemes before the drop-off, with supply chain businesses booming as demand for skilled construction staff soars.

Joss Blamire, Senior Policy Manager at Scottish Renewables, 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’re currently in the boom period of an entirely predictable boom-and-bust scenario, and unless something is done soon that bust could end Scotland’s hydro ambitions before they’ve had a chance to deliver their full clean energy, jobs and investment potential.”

Mounting problems with grid connections and project finance – exacerbated by a two-year window in which developers must build schemes to secure support – will feature heavily in the programme for June’s Hydro Conference & Mini Expo.

Speakers include Richard Round, CEO of developer Green Highland Renewables; Mary Drury, UK Hydro Development and Construction Manager at RWE Innogy UK; Jamie Corser, Business Development Manager at construction firm RJ McLeod and Kenny Hunter, Business Development Manager at MEG Renewables.

Joss Blamire continued: “The Hydro Conference is always one of our best-attended annual events, and with the FiT degression looming this year’s will be no exception.

“Hydro has a proud history in Scotland, and with the right support it can have a bright future. At the moment, though, the storm clouds are gathering, and we’ll be pressing hard to make sure the outcome of this unsettled period is the right one.”

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