Government launches new deal for hydroelectricity

Wilson made the announcement while opening a newly refurbished hydroelectric power station in Pitlochry, Scotland. He said that the new measures ‘would give hydro its biggest boost in 50 years’.

The new measures increase the size of refurbished hydro-electric power stations that can receive support from the renewables obligation from 10MW to 20MW. Additionally, all new-build hydro-electric power stations will fall under the renewables obligation. The Government also intends to broaden the scope for research and development to include environmental protection for hydro projects.

“Refurbished hydroelectric power plants are roughly 10% more energy efficient,” said Wilson. “These new measures will wash away the cobwebs on old hydro-electric power plants. They will give companies the confidence to invest in this forward-looking industry.”

It is expected that the deal will result in the refurbishment of around 30
hydro-electric power stations and company investment of around £250 million into hydro-electric power projects. An additional 200Gwh of new renewable energy generation is also expected to come on stream – equivalent to 70 wind turbines. However, new hydro stations, over 1MW in Scotland and 50MW in England and Wales, will still need local planning and ministerial consent.

Since the UK’s hydro capability is concentrated in Scotland, the initiative is intended to create substantial employment opportunities and give a boost to the Scottish engineering industry.

The Government is expected to create a £1 billion market for renewable energy by 2010 – it has set a target of 10% of total electricity to come from renewable sources by this date. The main driver for this will be the renewables obligation, which means it is critical for the hydroelectric sector that the mechanism is encompassed.

The Renewables Obligation and the Renewables Obligation (Scotland) will require electricity suppliers to supply a percentage of their total supplies from renewable sources, rising to 10% by 2010. Detailed proposals for the obligations will be announced soon.

The government is investing over £260 million in green energy over the next three years. Around 2.8% of the UK’s total electricity came from renewable sources in 1999, with hydro-electric sources accounting for around half of all renewable electricity. Over £55 million has been committed for research and development into renewable energy over the next three years as part of a wider £260million support programme for renewables.

“This is a major signal today that hydroelectric power still has a huge part to play in the Government’s strategy for renewable energy,” said Wilson. “The expansion of hydro was one of the great visionary acts of the post war period. The politicians, engineers and navvies of that era bequeathed to us the major source of renewable energy down to the present day. This announcement ensures that their legacy will continue to serve us, far into the 21st century.”