A Labour MS has turned his guns on the Welsh Government for the ‘bizarre’ decision to scrap a hydropower grant.
Alun Davies, Member of the Senedd for Blaenau Gwent, and former government minister, criticised the decision that some industry leaders believe will force many green energy schemes to go to the wall.
He was echoing the criticism of Plaid Cymru environment spokesman Llyr Gruffydd, who has called for a U-turn and labelled the decision “bizarre” and “short-sighted”.
According to Mr Gruffydd, the Welsh Government has turned its back on hydropower in Wales.
Hydropower generates electricity by harnessing the power of water as it flows through a turbine.
Mr Davies said: “I agree with @LlyrGruffydd This is bizarre. @WelshGovernment should be proactively seeking new ways of supporting hydro and other renewable schemes.”
According to the Welsh Government, the support scheme, which was introduced in 2018 to help hydropower schemes offset a huge rise in business rates, has provided more than £1M to the sector.
The rise in business rates was caused by a revaluation by the Valuation Office Agency, and independent body that in charge of how they are calculated in Wales and England. In some cases, this caused business to rocket by an eye-watering 1,000 per cent, which wiped out a huge chunk if not all the money the projects made.
The Welsh Government has some control over how the business rates are raised and sought to mitigate some of the impact of the rise.
The British Hydropower Association, a professional trade body that represents the interests of the UK hydropower industry, wrote to the then Finance Secretary Mark Drakeford to ask for support at the time.
Chief executive Simon Hamlyn told the BBC: “Community hydro schemes are suffering, and those businesses will say we can’t afford to pay these rates and they’ll abandon these schemes and that’s the last thing we want.”
The fear is that without government support, many of Wales’ hydropower schemes will become unviable.
Support will only be available to Wales’ community-run hydro schemes as of April 2021 the British Hydropower Association has been told.
This means that over 80 per cent of the hydro schemes that received support in the year 2019-20 will no longer to be able to benefit from the grant.
Seven community plants benefitted from the grant that year, and 50 other schemes, some of which are owned by farmers and other landowners, were also supported. This cost the Welsh Government an estimated £435,000.
According to the Welsh Government, there are 363 hydropower projects in Wales, and these contribute two per cent of the country’s electricity needs.