Government decision on business rate relief puts hydropower schemes in jeopardy

The Welsh Government has been criticised for withdrawing business rate relief for some private hydropower schemes from next month.

The British Hydropower Association has warned the decision leaves some schemes “on a cliff edge” and Plaid Cymru described it as “a huge backwards step for renewable energy in Wales”.

The Welsh Government introduced a rate relief scheme for the sector in 2018 following changes to the way business rates were calculated in 2017 by the Valuation Office Agency which resulted in some schemes facing huge increases to their rates bill.

The British Hydropower Association has called on the Welsh government to follow Scotland’s example, where the rate relief scheme has been extended until 2032 and said it would cost the less than £500,000 a year to do so.

“This decision by the Welsh Government is a huge backwards step for renewable energy in Wales” Plaid Cymru Shadow Minister for the Environment, Llyr Gruffydd MS said.

‘Unviable’

“Not only is the Government risking making large parts of the hydro sector unviable, it has also refused to consider a compromise put forward by the sector. It’s burying its head in the sand by ignoring a report the Government itself commissioned, which offers a long-term solution.

“Wales has quite rightly declared a climate emergency. Yet, the rate of installation of new renewable energy capacity in Wales has fallen every year under Labour since 2015. Now Labour Ministers are undermining what renewable energy generation we already have.

“How can we believe the Government when it says it wants a green recovery and to build back better when it has clearly decided that the hydro sector in Wales isn’t part of its plans? To have practically abandoned the sector in such a way is both short sighted and reprehensible.”

Over 50 private hydropower schemes are expected to be affected by the change on 1 April, however, community hydro projects will continue to receive business rate relief.

The Welsh Government says it had “no evidence of any projects ceasing to operate due to unsustainable costs”.