Lessons from history can help fuel drive on hydro energy

This article was originally published by The Herald on 17th February 2015.

There is arguably nothing that defines Scotland so readily as its water.

It is a core ingredient of our most famous export, whisky. Our beautiful lochs are justifiably world-renowned. And then there is, of course, our weather. There is usually a lot of water involved in that.

On top of all this, water provides our most iconic form of energy. The story of Scotland and hydro-electric power is a truly magnificent and even romantic one. It is a tale of great characters, political vision and determination, jaw-dropping engineering innovation and real architectural achievement.

Long before the issue of climate change had sprung to global prominence, Scotland was a pioneer in renewable energy. What began more than 100 years ago as a handful of small private enterprises grew over decades into a world-leading technology. Across the world, hydro now provides nearly a fifth of all power, and as we work to address climate change it is inevitable that it will only become more important.

Scotland's relationship with hydro has become totemic. But it started small. One of the earliest schemes was put in place by a Colonel Blunt, husband of the Countess of Cromarty, near Dingwall in 1903, where it was used to light the front of the Raven's Rock Hotel in Strathpeffer. Even before that, in 1890, monks in Fort Augustus had developed a small scheme to power the town. Legend had it that whenever the monks played their electric organ the lights would dim.

It was not a simple matter to move from these humble beginnings to a situation where hydro could be useful on a national scale. The breakthrough came when the British Aluminium Company (BAC), having scoured Britain, decided to set up production facilities in the Scottish Highlands, due to the abundant supply of water power. Over the next 40 years BAC constructed three large industrial generating schemes. It is worth noting, as we debate our energy mix and its controversies today, that there were regular protests against new large-scale hydro projects for despoiling the landscape, which were countered with promises of new jobs and other economic and lifestyle benefits. Now they run bus tours to them.

The third of these schemes, at Lochaber, was an engineering game-changer. The development involved three major reservoirs, connected lochs Laggan and Treig with a three-and-a-half kilometre tunnel, and amazingly saw a 24-kilometre pressure tunnel bored through the rock under Ben Nevis to connect Treig Dam with a steel pipeline which dropped 180 metres to the powerhouse near Fort William.

The development of hydro for public rather than industrial supply was slower to take off - the early days were dogged by difficulties in securing funding and indeed it was only when the government threw its support behind the viability of the sector and technology that investors began to show interest.

Of course, no discussion of hydro is possible without mentioning Tom Johnston, the MP who became Scottish Secretary in Winston Churchill's wartime government. It was he who drove through its vast expansion. In doing so he extended the electricity supply throughout the Highlands and Islands, transforming the quality of life for many.

Hydro is not just a major part of Scotland's past - with the ongoing support of government it can be a big part of our future, too. As chairman of the Green Investment Bank I am delighted to announce today £60 million of new funding for smaller-scale renewable power schemes, with a big focus on hydro.

This first venture will be an £8.5m run-of-river hydro project near Crianlarich. It is being developed with Albion Community Power and Perth-based Green Highland Renewables and will generate 8GWh of electricity per year, enough to power 1,900 homes. We expect to back many more of these projects across the Highlands.

Significantly, one of our co-investors is Strathclyde Pension Fund. This is the first time a pension fund has co-invested in a GIB project, and it is clear that the financial mainstream increasingly sees renewable energy projects as a sound investment.

This is a vote of confidence in hydro as a part of our future energy mix.

Thank goodness for all that rain, eh? Let us raise a dram of uisge beatha... slà inte!

Lord Smith of Kelvin is chairman of the Green Investment Bank.