Green Highland Renewables (GHR), based in Aberfeldy, has been selected to exclusively develop the schemes in the Highland region, the largest and most lucrative of three nationwide zones that are being tendered by the Forestry Commission (FC) to raise money to increase the rate of tree planting across the country. Together with Scottish and Southern Energy (SSE), which bought a third of the company in 2008, GHR will develop well in excess of 100 hydroelectric dams across the Highlands, many of them in the most remote glens in the region, in what is expected to be a 10 year programme.
GHR managing director Alastair Riddell estimated that this would include around 20 schemes in excess of 1MW; 30 to 40 between 500kw and 1MW; and a host of considerably smaller schemes that will be developed in partnership with Highland communities.
He said that his company and SSE had already been in discussions with potential backers, who will have to weigh the risks of investing in projects before they receive planning consent with the guaranteed pay-outs from the government’s feed-in tariff scheme for those that go ahead.
Riddell said: “Some of it will be debt to start with, then we will go onto equity. And the Forestry Commission and the communities will get some equity too. Quite a lot of work needs to be done thinking that through.
“For the [Highland region] alone, we are looking at a £100m project, all pretty much at private risk... We will go through a sieving process to identify the best sites over the next few months, but the phrase is ‘significant investment’.
“We are rather pleased. We feel it’s an awesome opportunity for the company, for the Forestry Commission and for Scotland and its communities. The Forestry Commission is being quite visionary. It is beginning very much to work for Scotland.”
The award is the first of three allocations that the FC will make on hydroelectric schemes in the coming weeks, having split the country into two other zones for the centre and the south. GHR’s so-called ‘north-west’ region is considerably larger than the other two, thought to be as much as half of the total. In the tender documents the FC estimated that schemes totalling 50MW could be developed across the country.
The FC, whose land covers 10% of Scotland, is also in the process of allocating swathes of the land for developing wind farms. The purpose of the two initiatives, which were announced last year, is to compensate for years of underinvestment in tree planting. The government is seeking to raise the annual rate of planting from 24,700 acres to 37,000, and the FC has estimated the wind and hydro initiatives could contribute £30m a year from stakes in projects.
Riddell said: “We have eight months to conduct feasibility studies, then it will take between two and five years to get consents, which will include huge issues with grid connections that will require government support because the structure isn’t right at the moment. Then to build them will take a year each. So it’s probably a 10 year programme.”
Scottish Environment Secretary Richard Lochhead said: “As part of the effort to develop a diverse, low-carbon economy, Scotland has committed to seeing renewables deliver 20% of our total energy used and 50% of our gross electricity consumed by 2020.
“Small scale hydro schemes can help to carry us towards that renewable energy future, but they bring many additional practical and tangible benefits to communities – from increasing the skills base for local trades, creating new jobs and bringing economic benefit.
“These schemes literally ‘empower’ communities by making them more self sufficient in meeting their own energy needs.”
