Welsh Government have announced that they will scrap business rates grants for hydropower schemes in local ownership from April 1, 2021 with support only being available to Wales’ community-run hydro schemes. Small-scale hydro operators have accused the Welsh Government of abandoning the sector and its own climate change commitments.
Welsh Government have a target to produce 1GW of renewable energy from local ownership by 2030. Its estimated that 75% of hydro schemes in Wales are operated by local ownership consisting of local businesses including farmers and Estates – this cohort that will be hardest hit by the Welsh Government pulling their support for business rates.
Ed Bailey of Baileys and Partners suggests that “Pulling the plug on the Welsh Government grant for business rates for locally owned hydro operators is likely to adversely impact the Welsh Governments own target of 1GW of renewable energy being locally owned by 2030.”
Simon Hamlyn, chief executive of the British Hydropower Association (BHA), said: “The Welsh Government has pushed small-scale hydro operators to a cliff edge and now it seems they’re simply abandoning them. Ministers are using multiple excuses to withdraw support for this important renewables sector. The government is seeking to hide behind COVID-19 and at the same time it’s also using the Valuation Office as an excuse, saying it doesn’t have the power to intervene when it clearly does, on this devolved matter. At the same time ministers are reneging on their published commitments to climate change.”
Ed Bailey believes that this action may cause those hardest hit, being the local owners (small businesses and farms) of micro hydro schemes, to consider selling their assets in order to release capital in anticipation of further volatility in the agriculture and energy markets.
Ed Bailey is in full support of the BHA’s proposal to meet with the Welsh Government to agree a mutually satisfactory solution for the locally owned hydro schemes. Simon Hamlyn concludes saying “Small-scale hydro operators are the bedrock of many rural communities in Wales, and by abandoning them and failing to listen, ministers are blatantly ignoring their own decarbonisation targets.”
Ed Bailey of Baileys and Partners is a leading authority on hydropower, he has designed and built a hydropower scheme on the family farm in North Wales. Ed would be happy to answer any of your renewable energy questions and would encourage hydro scheme owners to get in touch to voice their concerns about the Welsh Governments decision to pull the rates relief.