Natural Resources Wales (NRW) has revised a proposal that would have seen an elevenfold hike in water abstraction licence fees for all on-farm hydro projects in Wales.
NRW had planned to increase all applications from £135 to £1,500.
It now says that it will introduce an alternative tiered charging system following concerns that a single fee would slow down a sector which has grown tenfold in Wales in the last five years. Around 87 hydro licences were issued in Wales last year.
Fees will now start at £375 for schemes with a capacity of 25kW or less which means that smaller on-farm project face substantially lower rises in abstraction charges than had first been feared.
Larger, commercial schemes with a capacity of more than 100kW will pay £1,500.
The rise in charges was first mooted because the previous fee structure did not reflect the administration costs of processing applications, which can add up to £10,000.
NRW’s planning director Ceri Davies said the agency was keen to support the hydro sector in Wales.
“Hydropower schemes can help farmers, landowners and community groups be more economically and environmentally sustainable,” she said.
“By keeping our charges as low as we can, especially for smaller schemes, this should encourage more people and groups to see if harnessing the power of nature can work for them.”
Efficiencies have now been made to the application process also. “This has halved the amount of time we take to assess a licence and we will continue to work with the industry to improve this further,” added Ms Davies.
The hydro industry, farm unions and conservation bodies were consulted over the new charges.
NFU Cymru’s Rural Affairs Board chairman, Bernard Llewellyn, welcomed the new fee structure.
“It is the aspiration of many farmers in Wales to produce their own energy and there is growing interest in utilising the full range of renewable technologies available including hydro,’’ he said.
“During the consultation process we expressed deep concern that proposals would challenge the viability of many of the smaller farm-scale hydro developments coming forward. While the increases proposed cannot be described as insignificant, we are pleased that NRW have opted to bring in a charging scheme that is more proportionate and reasonable for smaller-scale projects accurately reflecting their scale and impact.’’