Welsh ministers accused of abandoning small-scale hydro operators

Small-scale hydro operators have today accused the Welsh Government of abandoning the sector and its own climate change commitments after ministers scrapped a vital grant and then, according to the operators,  failed to listen to businesses across rural Wales affected by punitive business rates.

Ministers are under fire from Welsh hydro owners for failing to introduce a long-term viable solution which will protect the renewable industry and rural jobs.

Business owners say they have been encouraged by the Welsh Government in recent years with support for excessive business rates, but now appear to have been left adrift, penalised by what they say is an unfair rates increase in 2017 which in some individual cases saw rateable values soar by nearly 1,000% since the previous valuation in 2010.

Simon Hamlyn, chief executive of the British Hydropower Association (BHA), the trade body, 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 an 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.”

Last month, the Welsh Government confirmed to the BHA that it was not renewing the business rates grant scheme for non-community hydropower schemes from April 1, 2021. The grant scheme was introduced after the BHA successfully persuaded ministers that the excessive rates increase was unfair.

The government commissioned its own report, which recommended a solution favoured by the industry – Prescribed Assessment – but it has never been implemented. Ministers have also ignored data provided by the small-scale hydro sector which shows that 75% of small-scale hydro schemes in Wales will be seriously affected if the relief is withdrawn.

Hamlyn added: “We understand the government’s budget has been affected by COVID. We’ve offered a short-term solution which would reduce the annual cost to government by around £140,000. This has also been ignored by a government which seems intent on ignoring the evidence presented and appears oblivious to the impact on renewable commitments and rural businesses.”

There are over 120 small hydro plants in Wales paying business rates. Around half benefit from the grant scheme following the rateable value increase in 2017, which wrongly assumes operators share small-scale hydro infrastructure costs with landowners.

Richard Rees runs North Wales Hydro Power, which owns and operates 11 small hydro schemes mostly in Snowdonia National Park. He said: “It is extremely disappointing that the government has deserted private hydro operators in Wales who provide much needed renewable energy and rural investment. They’ve taken away the short-term solution for a problem which they know exists, without implementing the long-term solution.

“I am especially grateful for the support shown over the last four years by the Welsh Government however I am incredibly frustrated that they have now taken a very short-sighted view in abandoning the sector without delivering on the long-term solution. It’s the worst of all worlds, it is ill-conceived, and it is unsustainable for businesses like ours.”

“Like any business, we aren’t averse to paying our share of business rates, we just want to pay our fair proportion.”

North Wales Hydro Power has suffered a business rates increase of more than 8,000% because of the removal of the grant scheme.

To add to an already unfair situation facing small hydro operators, seven community hydropower schemes currently operating in Wales will continue to receive the grant, which further acknowledges that the problem still persists.

Simon Hamlyn concluded: “The Welsh Government must reconsider fast and meet with the BHA to agree a mutually satisfactory solution. 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.”