small hydro

Dozens of Small Hydro schemes to be hit by new increases in Scottish business rates

Renewable energy operators with assets in Scotland have been left stunned and angry by another hike in rates on their businesses, of up to 579 percent next year, announced by Scottish assessors.  
Dozens of Small Hydro schemes to be hit by new increases in Scottish business rates
Inver Hydro on the Isle of Jura. Courtesy of Inver Hydro.

Dozens of small hydro schemes in Scotland say they are likely to be hit by new hikes in business rates while still engaged in legal disputes over increases imposed in 2017. One Scottish hydro scheme now faces increases that have accumulated from 2010 to more than 500 percent in 2023.

“What does the Scottish Assessor have against us – and why this continual assault on our green businesses?” asked John Lithgow, director of Inver Hydro, located on the Isle of Jura. “Inver Hydro on the Isle of Jura has seen its rateable value rise from £104,000 in 2010 to £264,000 in 2017, to a ridiculous £565,000 for 2023. That’s an increase of 543%, with no explanation or justification. Inver is a producer of clean, green, efficient, long-lasting electricity– and it is essential to the energy security of Islay and Jura. This latest shock is one which we might not be able to survive.”

Attempts to explain the system by which hydro rates are calculated by Scottish Assessors have been further confounded this week by a small number of hydros receiving reductions, without any change in the valuation methodology used by assessors. One scheme will see its bill drop by more than £60,000, to just £14,000.

“In 2017, the Assessor inflicted rateable valuations on the Small Hydro sector that were on average 240% of those applied to onshore wind of similar capacity” said Alex Linklater, executive director of Alba Energy, which represents Scottish hydro operators. These represented rates on a scale beyond any normal business. Yet now Scottish assessors have decided to increase these even further, not just by a few percentage points but sometimes doubling or trebling them. And to make a mockery of their own system, they have also chosen to reduce a few selected schemes by equally extraordinary amounts. The schemes have not changed, the data has not changed, the method of valuation has not changed. The Assessor has produced a madness without a method. There does not appear to be any reasonable logic or rationale for the extreme and inconsistent range of valuations the Assessor has produced across the small hydro sector.”

Industry representatives say that the 2023 draft valuation busts the myth of a level playing field for green energy businesses and makes a mockery of Scotland’s pretensions to being a pioneer of European renewables.

There are still more than 200 appeals outstanding at the Lands Court in Scotland over the 2017 valuation.

Kate Gilmartin, the newly appointed CEO of the British Hydropower Association, says she will be working shoulder to shoulder with Alba to champion a proportionate and fair rateable vale for Hydropower operators, which falls into line with other renewable energy generators.

“This excessive tax on Hydropower will discourage new developments at a time when we need to be accelerating this low impact, low visibility, clean energy generation technology” said Ms Gilmartin. There are around 500 small hydro schemes in Scotland. A 60 percent Scottish Government relief scheme which was extended in 2021 means some, but not all operators, receive a reduced business rates bill.

For additional information:

British Hydropower Association

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