Community hydro scheme may be last renewable project

A green energy scheme in a remote part of the north-west Highlands looks set to be one of the final community hydro projects to be built in Scotland after the recent axing of subsidy guarantees by the UK government.

The road to Applecross. Picture: Alan Macmillan

The ending this month of pre-accreditation, which allowed solar and wind projects above 50kW and all hydro and anaerobic digestion schemes to confirm the level of support they can secure, means a venture in the scenic village of Applecross is likely to be one of the last to benefit from the initiative.

The axing of pre-accreditation is part of a major policy overhaul by the Tories that aims to curb renewable energy subsidy spending. A consultation on cuts to the Feed-in Tariff (FiT) ends tomorrow.

But community leaders and industry experts say the ending of subsidies will have a damaging effect not just on climate change targets but also on crucial income streams and jobs in remote parts of Scotland.

Applecross is one of Scotland's remotest communities

The Scottish Government has set out ambitions for 100 per cent of energy to come from renewable sources by 2020.

Nicholas Gubbins, chief executive of members’ organisation Community Energy Scotland, said: “It’s currently an open question as to whether the FiT will survive after January 2016, and the uncertainty that the UK Government has created is highly corrosive to community energy development.

“Community renewables have provided a ‘development lifeline’ to many communities, especially those in fragile, remote or deprived areas.

“The FiT has not only enabled the generation of renewable energy but has also triggered a blossoming of community confidence and innovation around community-owned projects.

“Ironically, community projects have only taken a very small share of the overall FiT budget. It will be a tragedy if this fantastic progress grinds to a halt owing to this hasty policy change.”

Joss Blamire, senior policy manager for onshore schemes at Scottish Renewables, said uncertainty over income will be a major obstacle for potential developers, with serious knock-on effects.

He said: “Since predicting tariff levels years in advance without pre-accreditation is so risky, this makes funding new projects hugely problematic – especially for technologies like hydro, which take longer to build and which have higher initial costs.

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“While it may seem like a highly technical issue, the removal of pre-accreditation will have a very tangible effect: the demise of green energy projects which would have helped meet our carbon reduction targets and delivered clean, affordable energy to businesses, homeowners and community organisations across the country.

“Taken together with a full-scale review of the feed-in tariff, which is under way at the moment, these changes have left many of the 1,700 people who work in Scotland’s hydro sector fearing for their future.”

The 90kW Applecross scheme will export up to 50kW to the grid, allowing the local community to take advantage of FiT rates set in 2013. But plans are to use much of the energy locally. This includes the installation of a district heating scheme to provide heat and hot water to 16 households.

The project is being spearheaded by the local charity Applecross Community Company (ACC), which was set up in May 2008 to promote sustainable development across the area.

Alison Macleod, local development officer for ACC, said: “The Applecross hydro scheme is a long-term income generator for the community, as well as a source of cheaper power and heat.

“It makes sense to use local resources, especially in remote areas such as ours. It is a real shame other communities may not get the chance to benefit due to the reduction in FiTs and abolition of the pre-accreditation scheme.”

Renewables developer Highland Eco Design was commissioned to build the hydro scheme and agreed to provide the initial funding to get it off the ground.

Repayment will come from funds raised through an innovative share scheme, organised by local community benefit society Apple Juice and supported by Inverness-based social media firm Tuminds.

Profits will be used to fund projects identified through consultation with the community, including affordable housing and care of the elderly.

Apple Juice aims to raise a total of £780,000 via the share scheme and is currently looking for investors. The company has already raised £120,000 following the share launch last week. Shareholders will receive interest and may qualify for tax incentives.