Hydropower in the UK

Total number of schemes in the UK: 1,657
Total installed capacity: 2 GWs
Total generation: 5,496 GWhs
Storage capacity: 900 GWhs
Undeveloped potential: 1–3 GWs

Hydropower creates 2% of annual UK generation. Two-thirds of hydropower generation is in winter, helping meet peak demand.

Reservoir hydro is dispatchable. Run-of-river hydropower is less intermittent than wind and solar, providing a steady baseload across the winter months.

Hydropower has been generating electricity in the UK since 1878, with a large number of schemes being developed from the early 1900s.

The North of Scotland Hydro-Electric Board was formed with the Hydro Electric Development Act in 1943, delivering electricity to the Highlands for the first time.

Many hydro dams and power stations were built across the challenging terrain – dramatically improving lives across the region. These schemes are still operational today.

As evidenced by the large number of schemes still in operation after 100 years of service, hydropower has a very long operational life, providing true energy security.

Reservoir hydro offers low-carbon, dispatchable generation and currently provides approximately 900 GWh of storage across multiple schemes. This is a key requirement for a decarbonised grid. Hydropower has been used to meet the morning and evening peak demands of the UK grid for many decades.

Hydropower generates most of its energy steadily across the winter months when we need energy the most, especially as we look to electrify heat and move away from gas and oil heating. Its winter and night-time generation complements solar generation (summer/daytime).

The large spinning turbines create ‘inertia’, which is really useful for helping keep the grid stable.

The UK’s energy demand is expected to almost treble as we look to decarbonise heat, transport and industry. Hydropower’s generation profile is well matched to the UK’s energy demand, providing two-thirds of its generation across the winter as baseload. Hydropower schemes are well suited to meeting the decarbonisation needs of rural communities as part of localised energy systems solutions.

Additional hydropower could replace high-cost and high-carbon fuels such as gas used at peak times during the winter. This has significant value to the grid and in reducing costs for consumers.

Government incentive: There are currently no price stabilisation or incentive mechanisms to enable new hydropower schemes to be developed. With the volatile global fossil fuel market setting wholesale prices, this makes it difficult for hydropower schemes to develop a bankable business case within a payback time that is acceptable to investors. The current market does not give value to hydropower’s ability to generate across the winter, when we have the highest energy demand.

Business rates: Business rates are assessed by the Valuation Office, which applies a Rateable Value (RV) to each separate unit of rating assessment. The Rateable Value is then used by the Billing Authority to calculate the amount of rates payable. Sites are reassessed and new Rateable Values put in place at the start of each Rating Revaluation. The Rateable Value is an estimate of the annual rental value of the rateable parts of the asset at the valuation date. The BHA is calling for a change in how the Hydropower Rateable Value is determined, which is an excessive tax burden on generation plant that is stymieing potential to improve plant, increase storage and optimise hydropower for the future grid.

Grid constraints: Moving from a centralised grid, powered by fossil fuels, to a decentralised grid, powered by intermittent renewables, poses a number of problems for the electricity grid operators in terms of capacity constraints, curtailment, needing new flexibility and storage. The network is being reinforced and innovations are being brought forward to solve some of these issues but not as fast as needed, causing connection delays and generation curtailments. The BHA is calling for more resource to be put into the speeding-up of innovation roll-out.

Environmental permits: To get a hydropower scheme permitted, there needs to be a suite of environmental studies undertaken and approved. As with all public sector services, austerity has pared back the available services and increased application fees, alongside the introduction of an hourly rate to answer queries for those wishing to develop a new scheme. As expected, this has significantly damaged the ability to bring forward schemes financially, and engaging and progressing through the service has become a Herculean task.