Developers say hydro power 'being missed' because of wind focus
Foster Turner Hydro has halted construction of a 5-megawatt hydroelectric scheme in Scotland’s Highlands due to uncertainty in securing a grid contract, citing unfair competition with cheaper wind and solar projects in government auction rounds. The British Hydropower Association argues small-scale hydro could provide winter power stability but is being overlooked in favor of intermittent renewables, despite Scotland’s historical leadership in hydroelectricity.
Foster Turner Hydro has suspended construction on its Gaineamhach hydroelectric scheme near Gairloch, Scotland, after failing to secure a contract to supply electricity to the national grid. The project, expected to generate up to 5 megawatts and power around 4,500 homes, was halted following the completion of a 7-kilometer access track across the moorland. The company’s Projects Director, Toni Ramage, stated that without price certainty through the Contracts for Difference (CfD) auction process, the project could not proceed financially. The CfD system operates as a closed auction where developers bid for fixed-price contracts, but small-scale hydro projects compete against cheaper wind and solar schemes. Unlike wave and tidal energy, which have dedicated funding pots, hydro must compete in the same pool, making it less viable. The British Hydropower Association (BHA) highlights that Scotland hosts 80% of the UK’s 1,800 hydro schemes and that hydroelectricity provides stable, continuous power—unlike intermittent wind and solar—especially during winter months when solar output drops. Scotland has a long history of hydroelectricity, with the North of Scotland Hydro Electric Board connecting rural communities post-World War II. The Sloy power station on Loch Lomond, completed in 1951, remains operational today. The BHA’s chief executive, Kate Gilmartin, emphasizes that hydro should complement other renewables rather than compete, particularly for winter generation when demand peaks. High transmission costs in Scotland’s north are further straining renewable projects, as seen with the shelving of the West of Orkney wind farm due to unviable charges. The UK government’s Clean Power 2030 Mission aims to phase out gas in electricity generation, but rising oil and gas prices from Middle East conflicts have intensified debates over energy security. The Department for Energy Security and Net Zero has not yet finalized funding structures for the next CfD auction round, scheduled to begin next month.
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