Small hydro schemes ‘at risk’ from new Sepa charges

Rural businesses have warned that small-scale hydro production in Scotland faces uncertainty over its future as a result of proposed new Scottish Environment Protection Agency (Sepa) charges.

According to Scottish Land and Estates (SLE), which represents rural businesses, concern centres on a new fee regime for the monitoring of hydro schemes, which has been placed for public consultation by Sepa.

SLE say this would see larger hydro providers have their costs reduced while smaller schemes, previously exempt from monitoring charges, face new bills of thousands of pounds per year.

The British Hydropower Association estimates the average business, operating 0.1-2MW schemes, will be hit by new charges averaging more than £3,000 per annum and there are nearly 300 such schemes in Scotland.

SLE said the additional expenditure was a further disincentive to the renewable sector, which has been affected by uncertainty over feed-in tariffs as well as the prospect of large bills as a result of the non-domestic rates revaluation.

SLE policy officer Gavin Mowat said: “Hydro power has been heavily promoted by government as a reliable power source, one which usually has a predictable year-round power output and is typically low maintenance when compared with windfarms.

“Such systems are quiet and can be made unobtrusive on the landscape which also makes them more attractive to local communities.

“It is disappointing, however, that we continue to see the viability of small hydro schemes placed under increasing strain despite the wide-ranging commitment to renewable energy.

“Sepa’s proposed charges are problematic on their own, but they are compounded by uncertainty over the future of feed-in tariffs and the recent revaluation of non-domestic rates, which would see huge increases in rates for this technology.

“There is a real risk that new schemes won’t be viable and that the ability of existing providers to produce energy at a cost acceptable to the market could be adversely affected.”