Published: 1st Oct 2015

James high resResurrecting an old technology has enabled communities in Wales to chip away at a massive global problem – and provide an innovative means to regenerate otherwise isolated local communities.

Wales has long exploited its natural advantages in water sources, with its major hydro power schemes helping make the country a net exporter of electricity to the rest of the UK.

The immense pumped-reservoir scheme at Dinorwig can, through generators buried deep into the Elidir Fawr mountainside, bring its 1,727MW of power into use at the flick of a switch – enough to cover spikes in demand as the nation turns on its kettles at the end of Strictly Come Dancing.

But the latest developments in Welsh hydropower take place at entirely the other end of the scale. Thanks to the falling cost of generators, tiny hydroplants – up to 0.5MW in size – are helping a growing number of rural communities generate much-needed revenues and create local jobs. Twenty-three such schemes are currently in operation throughout Wales, with another 30 due to come onstream over the next year.

The thinking is simple: Wales’ abundance of small streams can be turned into a zero-emissions electricity source, operating on a scale that brings the price of installing a generator into the reach of small communities.

A typical ‘micro-hydro’ scheme will cost £5-8000 per kW – too much for anybody but wealthy individuals, but cheap enough for a local community, pooling its resources, to install and run. The key to this is the use of a legal vehicle for joint ownership, such as establishing an Industrial and Provident Society, and allowing a large number of smaller investors to pitch in. Wales has a long history of collective and co-operative ownership, with more co-ops per head of population than any other part of the UK. Community micro-hydro simply builds on that tradition, extending it to address two 21st century concerns: climate change and regeneration.

‘Wales’ abundance of small streams can

be turned into a zero-emissions electricity source’

It’s on the latter that the case for micro-hydro looks most compelling. New research from Cardiff University shows that the returns to investment are very substantial, and directly benefit communities. They found that every 1MW of community-owned micro-hydro installed creates 10 full-time equivalent jobs. For rural, often more isolated communities, this represents a significant boost where more conventional regeneration schemes may not work so well. And it’s a larger boost than other, similar technologies: the Cardiff researchers found that the next best scheme, community-owned solar photovoltaic, generated only 3.3 full-time equivalent jobs per 1MW installed.

In addition, as more micro-hydro is installed, the researchers found evidence of economic ‘clusters’ forming. Because effective installation requires a close knowledge of both the technology and the geography involved, a micro-economy of hydro suppliers is developing, involving suppliers and technicians operating at a local level. Whereas bigger schemes would draw in expertise – and employment – from elsewhere, micro-hydro, by its nature, had more direct impact on local areas.

There are two barriers to further expansion, however. The first is the antiquated electricity grid in many rural areas. The national grid was never intended for use with small-scale, decentralised electricity production. The presumption was that it would operate on large-scale, centralised generation from a few massive power-plants, with electricity distributed outwards across the country. Upgrading often elderly transmission lines to cope with smaller production can be a huge undertaking, but at present electricity operators are free to pass the cost on to producers. Costs can be astronomical: one proposed 18kW scheme was told a £5.2m transmission line upgrade would be required. Without systematic efforts to upgrade the national grid, requiring investment on a national scale, the further scope for micro-hydro may be limited.

Alongside this, changes to the Feed-in-Tariff (FiT) scheme that allows small renewable operators to sell their electricity to the National Grid are threatening the economic viability of schemes. FiT was purposely designed to bring newer, renewable technologies into use, offering generous rates of payment for small-scale production. These generous rates were scheduled to be phased out over time, on the presumption that, as technology improves, the need for any subsidy diminishes. This ‘degression’ in payments has, however, been accelerated rapidly over the last year. NEF research, due to be published soon, suggests that a drop in the price per kWh from 21.9p to 19.2p last October resulted in a 24% drop in planning applications for micro-hydro. A smoother transition to full economic costs will be needed if micro-hydro is to expand.

There’s plenty of potential here. But allowing community micro-hydro, alongside other, small-scale renewables generation to achieve that potential will require a smarter approach from government: a willingness to plan and install new infrastructure where needed, and a closer attention paid to the needs of small-scale generation technologies.

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