Hydroelectric power is the energy derived from flowing water. This can be from rivers or man-made installations, where water flows from a high-level reservoir down through a tunnel and away from a dam. Turbines placed within the flow of water extract its kinetic energy and convert it to mechanical energy. This causes the turbines to rotate at high speed, driving a generator that converts the mechanical energy into electrical energy. The amount of hydroelectric power generated depends on the water flow and the vertical distance (known as ‘head’) the water falls through.


Most suitable sites for large-scale hydropower in the UK have already been utilised, but refurbishment and small-scale hydro schemes could see up to £500 million invested up to 2020. Investment opportunities still exist. A number of sites need to be refurbished and operators of these facilities will be seeking support from investors. There are significant opportunities in small scale hydro. Studies in Scotland and England and Wales indicate that there is a maximum remaining potential of around 1 – 2.5GW to be exploited.


Building power plants in general is expensive. Hydroelectric power plants are not an exception to this. On the other hand, these plants do not require a lot of workers and maintenance costs are usually low. Electricity generation and energy prices are directly related to how much water is available. It should also be noted that hydroelectric dams collect nitrogen which can be harmful to fish and other animals.


There are no national grant schemes for hydropower systems, though there are sometimes regional grants that become available, particularly for community-based projects. Feed-in Tariffs are available for hydroelectric projects, as are Renewables LECs.