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United Kingdom
IEA member :
No
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Country Brief
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Hydropower provides only about 2% of the total electricity consumption of the United Kingdom. Most of the generation takes place in Scotland, which is both mountainous and wet, with Wales also making a contribution. England and Northern Ireland have many quite small hydroelectric projects but their total contribution is not large. Total installed capacity (excluding pumped storage sites) is 1349 MW.
History of Hydropower development
The great period of hydropower construction occurred in the years after the Second World War - from 1948 to 1965, when most of the Scottish schemes were built by the North of Scotland Hydroelectric Board. Since that time there has been little further construction due to increasing opposition to reservoir construction, on environmental grounds. Today, there are over 50 main hydropower stations in Scotland with an installed capacity of around 1050 MW. In addition there are three pumped storage power stations with a combined capacity of 830 MW. In Wales the Dinorwig pumped storage scheme has an installed capacity of 1200 MW and there are two other main hydro stations providing 16 MW.
Hydropower Potential
Various estimates have been made about how much potential hydropower is available for development in the U.K. There is probably a further 750 MW of capacity in Scotland, but it is difficult to say how much of this would be economically viable and equally importantly, environmentally acceptable.
So far as small hydro is concerned, there is a potential for about 300 MW of plants less than 10 MW, but probably not more than one third of this would be economically exploitable.
Organization of the Electricity Sector
As part of the process of privatising the U.K's electricity industry, an Office of Electricity Regulation (OFFER) was established and a
Director General and staff appointed. Scotland and Northern Ireland have Deputy Director Generals, (Scotland) and (Northern Ireland) respectively. OFFER has powers to regulate prices to ensure they comply with a formula based on the Retail Price Index. It can require individual companies to sell generating capacity, if it judges that competition is being adversely affected by monopolistic tendencies. The whole of the hydroelectric generating capacity in the U.K. is now privately owned, including the pumped storage stations. The national grid has also been privatised, and in 1998 the electricity market is to become completely open to competition, though it will continue to be regulated by OFFER.
The Non Fossil Fuel Obligation
There is a programme for the subsidising of renewable energy (including small hydropower under 5 MW installed) known as the Non-Fossil Fuel Obligation (NFFO), which applies to England and Wales. Similar programmes are run in Scotland (SRO) and Northern Ireland (NINFFO). So far as hydro is concerned these programmes have resulted in the building of 33 small plants to date with a total installed capacity of 20.8 MW. There is no programme for subsidising hydro greater than 5 MW installed.
All the renewable energy programmes are funded by electricity consumers through the fossil fuel levy. This is, in effect, a tax on the producers of electricity from coal, gas and oil, which is inevitably passed on to their consumers in the price of energy. it is important to make this point - that it is not taxpayers as a whole who pay for the additional cost of renewable energy. The levy was about 11% of the producers' selling prices for the first 7 years after privatisation, since more than 90% of it was expended on nuclear electricity. Since part of the nuclear industry has been privatised in 1995, the levy has been reduced to about 3%. It is still used to subsidise the part remaining in the Government's hands, together with the additional payments made for renewable energy.
The Non-Fossil Fuel Obligation has been introduced in a series of phases, the fourth of which is approaching completion. Developers of hydropower schemes, and other forms of renewable energy, submit proposals for projects with a price for the energy produced. Contracts are then offered on a competitive basis once all the bids have been submitted. The Government decides the upper threshold price for each technology in each successive round. All schemes below this price are awarded a contract provided they can obtain the necessary authorisation from regulatory authorities for abstraction of water and for planning permission. The UK Government places strong emphasis on competition and the requirement for the price of new and renewable forms of energy to converge with the price produced from existing fossil fuel generators. The process is designed to stimulate cost reductions in renewable forms of energy. This has proved difficult for hydropower because of limited opportunities-for savings in capital costs. The main advantage the system has is the prospect of a guaranteed fixed price contract for a period of 15 years, with a 5 year planning window. This policy has stimulated the development of small-scale hydro in the UK and provided a mechanism for developing other forms of renewable energy.
Government Policy and Licensing
The U.K. Government does not discourage hydropower development and indeed claims the converse. However, the process described is rather bureaucratic and is an expensive gamble for the small developer, as experience indicates that no more than one in three bidders is successful.
Water resources in England and Wales are controlled by the Environment Agency (EA), a recently established quasi- governmental body which has subsumed the duties of the previous National Rivers Authority. The EA issues licences for all "abstractions" from water courses. In Scotland this duty is fulfilled by the River Purification Boards and in Northern Ireland by the Environment Department. Appellants--may appeal to the relevant Secretary of State against decisions, but negotiation is generally a better route.
Total Hydropower Installed Capacity
Total hydroelectric capacity in the UK has e last remained approximately the same over the last ten years, at about 1,400 MW, but because of the gradual increase in total generating capacity, currently about 60,000 MW, its share is gradually decreasing. There is however a definite increase in small hydro, due to the NFFO, but this is too small to compensate for the declining market share. The breakdown by country and category of the installed capacity of hydropower facilities is shown in table 1.
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