HYDRO SCHEMES can produce very attractive returns - but also require huge investment, so farmers must take a conscientious look at what is on offer before parting with their cash.

Michael Woods, business manager at hydro specialists Dulas, was positively brimming with enthusiasm as he spoke about the Balnacarn hydro scheme which the company installed early last year, at Glenmoriston, near Fort Augustus.

The scheme itself is a 700kW high head scheme, meaning the flow of water travels downhill creating force against a pelton turbine to generate electricity. On its way, the pipeline passes through 1.5km of Forestry Commission Scotland land, towards a generating station on land owned by local farmer Tom Girvan, both of which now rent the land involved to Dulas.

The scheme has a control system in the power house based at the foot of the hill, and Dulas can monitor the turbine from there and also remotely via the internet, while a local caretaker carries out back maintenance alongside another scheme across the valley.

It was a pretty major operation to install the scheme, it took about seven-and-a-half months to dig trenches to install the pipe, build the intake and install the turbine. This timescale is pretty typical of hydro power schemes, and planning can take even longer. As Michael explained: "There are often restrictions over when you can work in rivers due to salmon spawning. Typically, from the first thought through to completing the installation can be three years - that's what I'd say was a realistic time scale."

For interested farmers looking at that stream on their land and wondering if it could turn into pound signs, there are a few things to consider.

There needs to be a good balance between 'head and flow', which is the vertical distance between the intake and the turbine, and how much water is flowing.

Dulas typically work with schemes of over 100kW, which make up the larger and more commercial side of the industry. Experts such as Michael can usually tell straight away whether a stream will produce a large amount, or if it would be more cost effective to perhaps install a smaller scheme with another company.

It's an impressively pragmatic approach from the company which basically just wants people to use renewables. "Our work ethic is that we want people to do renewables, we work on bigger projects but we can point people in the right direction if they perhaps would be better suited to a smaller operation," said Michael.

If a large hydro scheme suits the land, then Dulas can take it from that first thought straight through to completion and could maintain it throughout its life too.

Michael explained: "People choose Dulas because we are slightly unique in that we do everything from feasibility, design, planning and can also organise the build and take care of maintenance. There's not many companies in the market that do that.

"We very much believe in finding the right turbine for the site and finding the right solution the client is happy with."

To build the Balnacarn site, engineers diverted the flow of water before installing the Dulas patented AquaShear Coanda screens to filter the water through to the pipe with little to no debris.

There are official rules to be followed, as you would expect when dealing with aquaculture, that are set by SEPA at the planning stages. Balnacarn has a 'V' shaped gap beside the screen which determines the 'hands off flow', which is the water that must remain untouched by the scheme before 'abstraction'. It also has splash pools for fish to ensure they can still thrive in the river. These regulations will vary with each scheme, but it is something Dulas are very particular about, and are keen to create schemes with the minimal environmental impact.

It's a big investment, in time and money, but one that could pay off in eight or nine years because of the current favourable FiT.

The Balnacarn site can produce up to 700kW, but like most turbines, it doesn't produce to full capacity at all times as it is restricted by abstraction allowances and what rainfall has recently occurred. The ground at this is particular site is peaty, so if there hasn't been much rain there will not be a huge flow through to the turbine - and in turn less energy created.

However, Michael is positive that if clients install a decent system, their investment should pay off and particularly canny farmers can use the electricity generated to power operations on farm, powering a dairy for example.

"Hydro schemes have only become viable because of the Feed in Tariff, meaning you can get payback in eight or nine years on a reasonable site. People using better sites at present could get payback quicker. It really depends on how diligent you are during the development process," said Michael.

"There has definitely been a boom recently. Development was fairly slow between 1995 and 2009, then came the FiT and a boom time. Hydro's first heyday was 100 years ago, when there was no grid. By the time the late 50s and 60s came around, everyone wanted electricity from the Grid and hydro schemes fell out of use.

"The FiT came in at a reasonable amount. It will reduce but many people believe the electricity price will go up so will compensate. In terms of farming, what also maximises payback is using the electricity generated on farm, payback is better than with paying to buy electricity from the Grid."

Farmers shouldn't be blindsided by the amount of money that could be generated, warned Michael, as it is a huge investment and they should put as much thought into it as they would when buying a tractor.

Michael said: "One of the most important things is for people to be critical, build up knowledge and go and see examples of projects a company has undertaken in the past.

"The best showcase will be past schemes and talking on the phone will never be as good as seeing a site first hand. People must question what they are told, they shouldn't feel embarrassed if they don't know much about the technology and shouldn't be scared to ask questions. It's not a cheap option so you need to be sure what you're getting will be reliable."

He also pointed out that farmers don't necessarily need to own the scheme, they may be able to have a company commission it and rent the land, similar to Balnacarn. There is also potential in such cases for the farmer to become the caretaker of the scheme and earn a little extra through that.

And as for whether hydro is a better scheme than wind or solar power, Michael firmly believes they all have their place: "It is a completely different technology, farmers have to make a judgement on what's right. It is perhaps easier and less capital intensive to put in a wind turbine, but you can expect a hydro scheme to last over 50 years with upkeep.

"The FiT is arranged so return is roughly the same. Hydro schemes are very unobtrusive, and it's a very old technology so is tried and tested. Modern Wind turbines are a new technology, however there's a place for everything in the market."