In this era of rising utility prices and mounting challenges over future sources of energy supply, there is growing pressure to exploit green and cheap sources of power generation.
That backdrop set the tone of this summer's Scottish Government's announcement which stressed the urgency for additional hydro energy power sources to be developed across Scotland to help meet its ambitious targets for low carbon electricity generation.
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It was 70 years ago that the Hydro-Electric Development (Scotland) Act was introduced, enabling large-scale renewable energy development. In the short period which followed a number of the big players led a rapid expansion of hydro power schemes across Scotland where we saw 78 dams built and the installation of over 20,000 miles of transmission lines delivering much needed electricity to 200,000 homes.
While several decades have passed and the energy and environmental requirements may have changed, hydro remains as an important part of today's solution. For Scotland, there is great potential to grasp the opportunity which the next phase of hydro power schemes can deliver.
At present there are around 120 hydro schemes operating in Scotland which produce around 5TWh of electricity each year. These range from major installations generating more than 100MW down to small micro-sites providing just a few kilowatts. The combined output of all these schemes amounts to more than 1,800MW of capacity, roughly 12 per cent of our current electricity demand.
Despite the fact that it provides us with a clean and reliable source of electricity, hydroelectric power has been significantly under-represented in the current renewable energy debate, lost in the cacophony that has been generated over wind and solar power.
There is certainly life in the old dog with the potential for Scotland to extract a lot more from hydro energy. A recent study by Scottish Government has shown that there is potential for up to 7,000 schemes across the nation which could generate carbon-free electricity for up to a million homes. These new schemes could produce around 3 TWh of additional electricity per year, more than a 50 per cent rise on current output levels.
So given the potential, why don't we see more hydro projects undertaken in Scotland each year?
In most cases there is a combination of issues of which funding and investment is one. The upfront capital costs associated with getting a hydro scheme from concept to operational are substantial compared to other renewable energy developments. This factor combined with uncertainty over the future level of the feed in tariff (FIT) has frightened many potential investors. The Scottish Government could help circumvent this problem by creating a more predictable and longer term FIT and contemplating different solutions for funding, such as making some support capital available to take projects through to financial close.
The lengthy process of grid connection for new hydro projects is another concern. Scottish Power and SSE have committed to improving their processes but, for the developers, it is still not fast enough to secure grid connection dates that align with funding.
When grid capacity is released for an area of the network it should be split between the various renewable technologies to encourage a mix of energy generation sources. A time limit should also be put on the availability of a connection to release this capacity to projects further down the list.
The processing of planning applications, a problem for all energy projects, also has a huge impact on the development of hydroelectric schemes. Planning is often long-winded and presents further risks for developers and investors should delays make the projects less financially viable. Solutions, such as limiting the number of consultations and response delays from planning authorities and statutory consultees, could be implemented to shorten this process. Closer working practices between hydro developers and local authorities would also be a positive step forward.
Because many of the new hydro energy schemes would be micro-sites, the development of new projects has a real scope to benefit local communities across Scotland. Of course financing remains a barrier and there are also concerns about how to implement a long lasting organisation to pursue the projects to insure proper management of funding and monitoring. However, good leadership as part of a cooperative system with communities working together to pool resources has been an effective combination in surmounting these challenges.
The Scottish Government has also put programmes in place to help communities and landowners develop hydro projects but more has to be done to ensure that they have sufficient understanding of technical, financial, legal and other core issues.
So despite being 70 years on and facing a number of current challenges, hydro energy continues to offer a viable and affordable option for Scotland's energy needs. The challenge now is to get investors, governments and local communities working in tandem to ensure we maximise the opportunity. Onshore wind generation is reaching its capacity in Scotland so hydro is an obvious and abundant resource that we need to get the most from. In doing so we could enjoy the benefits for the next 70 years and beyond.