Hydro electricity can power 'thousands of homes'

The number of licences for small-scale projects has increased sixfold since 2000, with the Government granting 31 last year compared with five in 2000.

The Environment Agency has issued 29 licences this year and is considering a further 166 applications, as businesses and communities attempt to cash in on a government incentive which pays people for generating electricity from small-scale renewables.

There are about 400 hydropower schemes in England and Wales, which produce electricity to power about 120,000 homes, and the Environment Agency estimates the number could rise to 1,200 by 2020.

The agency has identified thousands of hotspots for projects which could benefit from "feed-in tariffs", which pay people for generating electricity from small-scale renewable technology.

The feed-in tariffs scheme, which came into force in April, could pay £25,000 a year for a medium-sized hydropower project which would cost between £100,000 and £150,000 to install, the Environment Agency said. It has identified 4,000 sites where a hydropower scheme could be installed without harming fish or increasing the risk of flooding.

At a speech to the Chartered Institution of Water and Environmental Management National Hydropower conference today, Environment Agency chairman Lord Chris Smith will say that hydropower presents a "unique set of challenges".

"It is a great example of a natural resource which produces few wastes. It is a reliable and proven technology and is increasingly attractive to local communities.

"But it can have a big impact on fish, in particular migratory fish. It can increase the risk of flooding. The change in the quantity of water in a river can have impacts on the wider ecology. On top of that, climate change may impact on the future flow of rivers."

He will tell delegates: "The challenge is to encourage the deployment of renewables, build public confidence, meet obligations on nature conservation and the environment, and not increase the risk of flooding.

"For the Environment Agency there is an extra challenge - to regulate these technologies in a simple and efficient way. We are committed to getting the regulatory balance right - making it as easy as possible for organisations to apply for hydropower permits while still protecting the local environment."