WITH THE reduction in feed-in tariffs for new renewable energy projects as the number of installations increase, there is a view that if you are not already on board you have missed the boat.

This may be the case for more marginal sites, but good sites can still provide an attractive return when compared with other investments on the farm. With all the pressures on farm incomes from CAP reform etc, the option of having an additional income stream from a renewables project where the income can be predicted for 20 years is an attractive one to many.

Micro-hydro installations on hill burns are a good example. Where a suitable resource exists that can be developed within the guidance provided by SEPA and SNH at reasonable cost, and where a grid connection can also be obtained at reasonable cost and within a reasonable timescale, these sites are well worth investigating. SAC Consulting have taken numerous sites of this type forward in recent years, such as the 46kW scheme recently commissioned on Skye for the North Talisker Sheep Stock Club.

The site for the Talisker scheme has a head of 79 metres and was originally identified during a Whole Farm Review carried out by SAC Consulting, who subsequently undertook the planning submission and licence applications.

The project was supported by a loan from the Scottish Government's CARES scheme. This scheme provides finance for the pre-development stages of renewables projects and includes a write-off facility should a project fail to make it to the construction phase. In return a small annual payment from the proceeds of successful schemes must be paid for the benefit of the local community.

Grid connection was initially anticipated as being a limiting factor at the site. However, SSE were able to offer a connection at 46 kW at reasonable cost which was only a slight curtailment on the potential of the site.

SAC Consulting have provided support through the installation and commissioning phase and the scheme has now received full accreditation with OFGEM and will receive the feed-in tariff rate pre-registered in December 2013 when approvals were obtained. Pre-registration of a hydro site allows for up to two years to commissioning. Installation of the Talisker scheme was carried out by Proterra Energy.

Ideal high head micro-hydro sites for development will have the following characteristics:

- A steeply falling burn, ideally a fall of 1 in 10 or greater and with a drop in excess of 50 m between the potential intake and the proposed turbine location;

- A catchment area above the intake in excess of 1 km2 and annual rainfall in excess of 1100 mm;

- Good access for the abstraction pipe from the intake;

- Ideally an existing barrier to migratory fish below or immediately above the proposed outfall;

- A convenient grid connection.

A number of issues will have to be addressed through the planning and licensing phase and a range of environmental studies will be required depending on the specific site. These may include:

- Fish and fish habitats;

- Otters, badgers, squirrels;

- Great crested newts;

- Water voles;

- Bryophytes;

- Fresh water pearl mussels;

- Bats.

Raising finance for the construction phase can be difficult if other assets are not available to use as collateral. However, there are plenty of private investors keen to invest in hydro and once approvals and a grid connection agreement are in place a reliable return on investment can be predicted.

The Talisker scheme is predicted to generate an income in excess of £50k annually.