Simon Hamlyn, chief executive of the British Hydropower Association (BHA), says Scottish politicians are undermining its hydro industry
Scottish Government first minister Nicola Sturgeon is guilty of blatant hypocrisy. She launched a ferocious attack on the cuts being made by the government at Westminster to renewable energy subsidies – but this came only a day after her finance secretary John Swinney confirmed that £10 million of rate subsidies for hydropower schemes in Scotland will be axed in April this year.
From 1 April, only community-run hydropower schemes will qualify for the subsidy, which offers hydropower companies rates rebates of up to 100%. We believe the decision was shocking and the timing appalling and it will make renewable energy in Scotland from hydropower far less economic.
The introduction of the Non-Domestic Rates [Renewable Energy Generation Relief] [Scotland] Regulations in 2010 was a great help in supporting hydropower schemes and the BHA fully supports the continuation of this scheme for all forms of hydropower as it is fundamental to the economics of schemes, many of which are located in fragile rural communities.
A reduction of support in Scotland, with the proposed withdrawal of rates relief for hydropower, will be a further blow for an industry already reeling from misguided cuts in subsidy.
The outcome of the UK government’s review of the feed-in tariff (FIT) in December 2015 has already threatened the future development of the hydropower sector, with the potential loss of thousands of jobs. A further reduction of support in Scotland, with the proposed withdrawal of rates relief for hydropower, will be a further blow for an industry already reeling from misguided cuts in subsidy.
At a time when the UK government is dramatically cutting support for hydropower through the reduction in FITs, it is desperately disappointing that the Scottish Government chose to take this action at this time. The Scottish Government is criticising the UK Government for reducing subsidies, but at the same time it is hitting hydropower schemes with a £10 million rates bill.
In a recent meeting with energy minister Fergus Ewing, the BHA made clear its objection to the removal of business rates relief for hydropower schemes.
In a letter to the finance secretary we highlighted the fact that removing rates relief for hydropower schemes in Scotland will affect jobs and local economies in the sector and indeed, there is a distinct possibility that it could make schemes economically unviable in the longer term. The BHA urges John Swinney to reconsider this proposal urgently and seeks a meeting to discuss the implications in greater detail.
First published in the February 2016 issue of New Power.