Extracts from the Sept-October 2001 edition of Renew
These extracts only represent about 25% of it

6. Scottish Hydro complaints

At the Science and Technology Select Committee hearings on wave and tidal power, Dr James Martin from Scottish and Southern Energy plc. noted that the hydro plants that were one of their main sources needed extra funding to maintain and enhance output. They had been doing that themselves, via their own investment programme, but warned that they might not be able to continue, given that market competition was becoming so fierce, and given that hydro was partly excluded from eligibility for use by businesses seeking exemption from the Climate Change Levy, and for counting against the Renewable Obligation. ‘We are very proud of our heritage of being the lead in renewable generation and would very much like to continue in that position in the United Kingdom.(...) The route that we have taken through that hitherto has been to invest approximately £20 m (of Scottish or English pound notes) per annum in renewable energy. The purpose of that investment has been to sustain the hydro facilities which were built in the fifties and sixties of the last century. Those machines are now obviously 40 to 50 years old and a power plant typically has a life of 40 to 50 years. All our hydro is now in that age range and to keep it going we have found it necessary to invest £20 million-odd over approximately a 15-year programme, so we had committed to a £300 m investment programme which completely dwarfs any other investment in renewables in this country. I would submit that that investment is necessary to keep what the nation has’.

He went on ‘The position at the moment, with the decline in the price of electricity, means that that investment no longer meets our criteria so we have stopped that programme completely at the moment. I am studying at the moment de-commissioning hydro. Fundamentally the price of electricity has come down in this country which makes that investment in keeping Scottish Hydro going less attractive than other opportunities. Indeed, it does not meet our investment hurdle rates. Therefore we have stopped that programme. The solution, to move on along that particular line, is for the plants in the 10 to 30 megawatt range to receive some form of support. At the moment they are not eligible for renewable energy certificates. As such they are not economic to refurbish. The larger schemes are, and we have done most of those.’

As for the future he reported that ‘the Board has recently passed an investment in wind, our first, because we felt that sustaining the hydro was the right thing to be doing with this £20 million, but we have recently committed to our first wind power’.