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What is clean, green, and reliable and provides the greatest proportion of the world鈥檚 renewable electricity, yet is all but forgotten as a green energy source? The answer is hydropower which provides 16% of the world鈥檚 electricity. In the UK only onshore wind trumps hydro for renewable energy output: last year 3,603GWh of the UK鈥檚 electricity was generated using hydropower. Compare that to the measly 33GWh of power generated by photovoltaic panels, now at the centre of a high-profile row over cuts in a government subsidy for new installations.

Hydropower has several plus points; it is more reliable than PV or wind power with power generation only stopping during prolonged dry spells. It is cheaper than PV; a small scale hydropower installation has a typical payback period of seven years. PV had a payback of 11 years before the feed-in tariff cut from 43p a unit to 21p; with that cut the payback period has now extended to 20 years. By contrast the feed-in tariff rate for hydropower is beginning to look generous; remaining at 21p for schemes with an output up to 15kW whereas PV schemes between 4kW and 10kW only get 17p. Does this mark the beginning of a hydropower revolution?

The evidence says yes. The Environment Agency, which licenses hydropower, has seen a massive increase in applications.

鈥淚 would say there has been a tenfold increase in the last year or so,鈥� says Steve Naylor, the agency鈥檚 hydropower project manager for the South-east. 鈥淚n 2010 we licensed 65 schemes but in 2008 we only licensed 10.鈥� A month ago the first hydropower scheme to be built on the Thames in recent times, at Mapledurham Estate, started operating and will generate 500,000kWh a year. Work is coming to a close a few miles downstream at Romney Weir, the 1,400,000kWh yearly output is enough to power 300 homes and will supply Windsor Castle.

According to a report prepared by the department for climate change in October 2010, the potential is there for many more schemes. Currently 1.3% of the UK鈥檚 electricity supply comes from hydropower but there鈥檚 potential for another 1%-2%. This additional power could be supplied from a wide variety of sources and could include installing more efficient turbines to existing schemes. There is the potential for several large-scale schemes in Scotland; in 2008 the first scheme for 50 years started operating at Glendoe. This 拢140m plant has an annual output of 180gWh which is enough to supply 5% of Glasgow鈥檚 energy needs. A rockfall in the tunnel connecting the storage reservoir to the outfall at Loch Ness stopped it operating but it is scheduled to reopen next year.

Raising the level of existing reservoirs by a metre or so is another way of increasing capacity and is much less controversial than trying to build new reservoirs. But much of the extra capacity could come from small schemes. These include breathing new life into abandoned mills or adding a hydropower plant to an existing weir.

Another valuable source of power could come from abandoned reservoirs which were specifically built to power the machinery needed for the industrial revolution. Adding a hydropower plant would be relatively straightforward and the power could be used locally to get around the problem of the lack of a grid connection. Many of these are on land belonging to the Forestry Commission and there is a new impetus for them to press them back into service.

Raising the level of existing reservoirs by a metre increases capacity and is less controversial than trying to build new reservoirs

That impetus is the Flood and Water Management Act which was introduced last year in response to serious floods in 2007. Part of the act aims to reduce the risk of flooding from reservoir failure and it will take effect in the next year or so. Under previous legislation owners of reservoirs with a capacity of 25,000m³ or more were obliged to maintain them and carry out regular inspections. The new act reduces the cut off limit to just 10,000m³.

鈥淚f those reservoirs have to be brought up to some sort of standard, it could be quite expensive,鈥� says Dr Andy Hughes, director of dams and water resources at Atkins. He adds that many of these reservoirs are located in narrow valleys in the uplands of the UK and were built to provide power for machinery. 鈥淲hile that work is being done it makes sense to think about putting in some sort of hydropower plant that could help to meet those costs.鈥�

Natural stone company Forest Pennant is located next to precisely the type of reservoir that will be affected by the new legislation. Owned by the Forestry Commission, Cannop Ponds in the Forest of Dean were built in 1826 to drive what was at the time Europe鈥檚 largest waterwheel which powered an ironworks. Modelling showed the 8m head made the scheme viable. It took three years to get planning permission and the necessary consents (see box), and a turbine and associated equipment was installed at a cost of 拢70-80,000. It produces 50,000kWh per year which meets one third of the stoneworks鈥� electricity needs. Once the feed-in tariff payment is factored in, this adds up to meeting 83% of the plant鈥檚 electricity bill. According to Hughes the original payback period was seven years but with recent energy price increases, he reckons this has reduced to just five.

Forest Pennant paid for the plant and will give the Forestry Commission a percentage of the money it saves on bills. Richard Davis, the Forestry Commission鈥檚 area land agent for south central England says it typically receives around 10% and wants to see more schemes. 鈥淲e are keen to promote the idea of mini hydro on Forestry Commission land,鈥� he says, adding this has to be done in partnership with an organisation prepared to pay for the plant. He is working on three other schemes in his area at the moment. The types of organisations interested in developing hydropower schemes include industry and developers doing it for a financial return on the investment, and power companies. Increasingly, groups of householders are clubbing together to pay for a plant that will power their homes. Hughes says he is advising on a scheme in mid-Wales where five houses downstream of a Forestry Commission-owned reservoir are trying to build a scheme.

The main barrier to building more hydropower schemes is the upfront cost and the associated difficulty of getting funding. Payback periods are relatively short compared to other forms of renewable energy but are still too long for the banks. The green infrastructure bank could help once this gets going next year and could help usher in a new wave of hydropower schemes. Hydropower won鈥檛 solve the UK鈥檚 energy problems but could make a useful contribution with the added bonus of providing some work for the industry too.