Hansard

This is a timely debate that examines the past, present and future of one of Scotland’s most valuable assets—a source of renewable energy that can help to combat the current problems of high fuel bills and fuel poverty in many of our communities.

Hydro power is the oldest form of renewable energy in Scotland and has a proud history. It contributes about 12 per cent of our electricity needs, as we have heard. In 1930, Scotland had a mere 45MW of large-scale hydro, and the rest of the UK also had 45MW. In 2012, Scotland had 1,339MW of large-scale hydro, while the rest of the UK had 132MW. We currently have enough hydro power to provide almost 1 million homes with their electricity every year. Hydro has been a reliable source of energy for decades; today we celebrate 70 years since the passing of the 1943 act.

In the race for cheaper, cleaner and renewable energy sources, it is too easy to forget the role of hydro power—not only in the past, but when we look to the future. There is potential for more than 1.2GW of smaller-scale hydro to be developed in Scotland, but some issues need to be resolved for that to happen. They include feed-in tariffs, which my colleague Rob Gibson touched on. Feed-in tariffs have been cut by a set amount every year, depending on the level of deployed capacity. Other issues include electricity market reform and delays in connecting new projects to the national grid.

Many, if not all, of those delays are due to the slow pace of the Westminster Government. With independence, a Scottish Government of whatever hue could provide stronger support to that key industry, which could certainly provide renewable energy to tackle the scourge of fuel poverty. The report on the achievability of the Scottish Government’s renewable energy targets by the Economy, Energy and Tourism Committee, which I was a member of until the report was drafted, highlighted that

“the support the Scottish Government can provide to the development of the renewables sector is limited by the current constitutional arrangements.”

It was also interesting to note that

“The Committee does not believe that there is significant evidence that the current constitutional debate is undermining investment decisions regarding renewable energy.”

That report also highlighted a number of issues that need to be addressed, including the transmission system and the charging regime. There is widespread concern that Scotland’s generators are being penalised for providing power while those in other parts of the UK receive generous subsidy.

Although the committee report welcomed the recent decisions that have been taken to level the playing field for mainland generators in Scotland compared to the rest of the UK, there is still concern that the improved incremental cost-related pricing that has been proposed by the Office of Gas and Electricity Markets does not go far enough, and that island generators remain at a distinct disadvantage compared with those on the mainland. I have touched on that point in previous debates. The situation will render many projects uneconomic—I expect that Liam McArthur will touch on that in his speech, as he is an Orkney MSP. Given the significant renewables resources that are located on and around Scotland’s islands, a fairer system must be found.

The committee’s report also mentioned the empowering of communities either to generate their own energy or to gain the maximum benefit from developments in their area. Microgeneration provides the opportunity for householders, businesses and communities to participate in the low-carbon economy. The importance of community and locally owned renewable energy is also recognised by the target of achieving 500MW of community and locally owned renewable energy by 2020.

I am aware of moves in West Scotland to create a community-led micro-hydro generation company. That would, I hope, provide hydro power to the grid and provide community benefits, much as similar community-led projects have worked with onshore wind farms. I genuinely believe that that is an exciting prospect for areas in West Scotland. The one that I know of is in Inverclyde, which as members will know has no lack of rainfall to provide the raw resource that is necessary to drive hydro power projects. A number of sites across Inverclyde are being looked at as potential locations for micro-hydro generation. It is hoped that they can be developed either in partnership with Scottish Water or as stand-alone community-interest companies.

By following a community-led approach, such as has been used by the Neilston community wind farm, we could empower community groups to generate additional funding for their areas while they generate electricity for the grid. Such funding could be used to help to combat fuel poverty and to improve energy efficiency in homes, or it could be used for a range of developments that are aimed at improving communities. Inverclyde Council has been investigating the possibility of hydro power schemes being in council ownership or control, as part of its approach to renewable energy generation.

It will certainly be interesting to see how those schemes develop and, I hope, combine to support communities in Inverclyde. It is of great interest to me that, in the past, much of the heavy industry in Inverclyde was powered by hydro power and that much of that infrastructure still exists. With a bit more investment, who knows what could happen?

Another positive side to community hydro schemes is that they can help to address flooding, which would be greatly advantageous in Inverclyde.

We need to make it easier for communities to come together with councils and businesses to form community interest groups to ensure that at least some of the profits of hydro power go back into those communities. For that reason, the Scottish Government’s decision to retain the level of support for the sector is significant. That will certainly be a boost to the smaller developments that are being looked at across the country. Such developments face more challenging conditions and higher risks, so maintaining of support—unlike what appears to be happening in the rest of the UK—is significant and will provide some stability for investment. Further support through streamlining planning consents will also encourage the future development of smaller facilities.

In conclusion, hydro power has a long and successful history in Scotland. It provides a significant amount of clean renewable electricity. With the continuing support of the Scottish Government, there are good prospects for the future development of hydro power in Scotland—potentially on a smaller, community-led, basis.

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