Rates relief move aims to give hydro generation a boost

Calum Innes reports on two items of good news for an important sector of the Scottish renewables industry.

Owners and operators of hydro projects have welcomed further support from Government in their campaign to ensure the viability of renewable energy schemes in the face of business rate rises, with help from Galbraith. 

In response to the hydro industry’s concerns over significant increases in business rates following the 2017 rating revaluation, the Scottish Government introduced interim measures for the financial year 2017/18 to provide transitional relief for schemes less than 1mW. 

Subsequently, in response to the Government commissioned Barclay review of the Scottish non-domestic rating system, Finance Minister Derek Mackay announced a pledge to review the underlying legislation as it relates to hydro and the introduction of a new relief to reduce liabilities. 

Now, a policy note issued by the Scottish Government has confirmed it is upholding that earlier promise and from April 1 it introduced a new 60% relief for hydro schemes with a rateable value up to £5 million. Galbraith assisted the British Hydro Association and the Scottish group of hydro operators – Alba, in their talks with Government to find a long-term solution. 

After long, detailed discussions, it was clear the valuations imposed by assessors in connection with the 2017 revaluation would threaten the viability of many schemes unless special measures were undertaken, possibly undermining the hydro industry in its current format. 

The February guidance note said:

Renewable energy is one of Scotland’s most important industries, creating jobs and investment opportunities while delivering secure, low-carbon, cost-effective energy. The Scottish Government is committed to reducing carbon emissions, and the development and promotion of renewable energy generation is one of a number of measures aimed at tackling this issue. 

Decreasing the non-domestic rates payable on these properties should increase the attractiveness of renewables technologies as a means of energy generation. This should, in turn, promote greater energy generation in the sector and a reduction in carbon emissions.