The Scottish Government has been accused of inflicting a “special punishment” on hydro power schemes with a huge hike in business rates.
Industry representatives claim that increased valuations threaten to wipe out the current crop of privately owned water-based renewable technology north of the border.
Some small-hydro businesses are now facing an increase in rates of up to 650 per cent, according to a hydro power consortium.
And the SNP have been accused of “abandoning” its green agenda by removing rates relief and asking the sector to pay its “fair share”.
But representatives for Alba Energy, a group of private hydro-producers set up in 1998 to share expertise, say that the “sudden, exponential increase” in property valuations is “out of all proportion to the economic realities of these sites”.
Some producers fear rateable bills for their sites may double, treble or even quadruple.
Martin Foster, chairman of Alba Energy, said: “We are not seeking special treatment. We want to know why we have been singled out for special punishment.
“Hydro is the original renewable energy source: the cleanest, most efficient, least obtrusive and longest-lasting.
“Yet the Scottish Government has facilitated a rates regime that will cripple the independent hydro industry it once claimed to support – while leaving the big energy companies unaffected.”
According to Alba Energy, an “average” hydro scheme such as the 500kW Buckny Hydro in Perthshire has seen its draft valuation rise from £32,000 to £93,000.
The sum represents 29 per cent of the facility’s overall turnover.
The lobbying group further claim that the worst hit schemes have seen increases up to seven times their original value, with rateable valuations of up to 50 per cent of turnover.
The 1.9MW Ederline scheme on the banks of Loch Awe had a previous valuation of £98,000, now revised upwards to £405,000.
Alba say that in 2015, while attacking the UK Government for removing subsidies for renewable energy, SNP ministers removed their own system of support for the industry.
Alex Linklater, director of Buckny Hydro, said: “The new rates regime contradicts the Scottish Government’s own energy strategy.
“Hydro power is not merely crucial to this strategy; it has brought significant growth to some of our remotest rural communities.
“As independent operators find themselves threatened with punitive levels of taxation, we are seeking government support, until a longer term solution is agreed. All Alba is
asking for is an equitable model of valuation, one that will allow our industry to remain financially viable, while paying its fair share of rates.”
Scottish assessors responsible for the revaluation have refused to publish a clear account of the
method they are using to calculate the new valuations for hydro.
Alba is calling on the SNP government to make it clear how these alleged “extreme perversities” in rates increases have come about.
A Scottish Government spokeswoman said rating valuations of business properties are undertaken by independent assessors.
She added: “Individual business rate payers can appeal their valuation via independent processes if they feel it is incorrect. Each council retains all the business rates revenue it collects, and it is for councils to apply rates reductions, on top of statutory reliefs, as they see fit.
“The Scottish Government announced a package of action to reduce business rates as part of the draft budget presented to Parliament by Finance Secretary, Derek Mackay. We have also committed to expand renewables relief, and have been engaging the sector ahead of confirming detail shortly.
“Our recently published draft Energy Strategy outlines an ambitious vision for a modern, low carbon Scotland. Hydropower generation makes a valuable contribution to Scotland’s renewables targets and it will have an important role to play in meeting our target to deliver the equivalent of 50 per cent of the energy required for Scotland’s heat, transport and electricity needs from renewable sources by 2030.”
