Farmers have urged the Welsh government to keep the production of hydropower on farms a viable option amid the possibility a crucial business grant may end.
The Welsh government has changed their grant scheme to only supporting community owned hydropower projects with their rates bills, a scheme that has previously provided £1m of support to the sector over the last four years.
But farmers who cannot afford to pay the rates might be forced to abandon these schemes, the Farmers Union of Wales (FUW) has warned.
Farms have been instrumental in helping achieve a more than five-fold increase in renewable energy production in the past 15 years, according to the union.
FUW Policy Officer Charlotte Priddy said: “We are dismayed to hear that the Welsh government has changed their grant scheme.
"It will deter future take up of opportunities with hydropower, which is also a valuable source of extra income for farmers.”
Hydro schemes, Mrs Priddy outlined, were hit particularly hard when business rates were recalculated across England, Scotland and Wales in 2017 by the Valuation Office Agency.
In some cases their business rate bill rose by as much as 1,000%, offsetting much - if not all - of the money they made generating electricity.
It led to the introduction of a rates relief scheme by the Welsh government, offering grants to cover some of the costs.
But Mrs Priddy said it was 'unfathomable' why support for the scheme had been dropped, as Welsh government had a target for 1GW of locally-owned renewable energy generation by 2030.
She added that the government also wants 70% of Wales' electricity to come from green sources by the same year: “We can not lose sight of the importance of climate change," Mrs Priddy said.
But a Welsh government spokeswoman said the impact of the Covid-19 pandemic had put 'unprecedented pressure' on budgets.
“The support scheme we introduced in 2018 has provided more than £1m of support to the sector," she added.
"We have worked closely with the British Hydropower Association to address the impact of the 2017 revaluation of business rates on the sector, and will consider options for longer term support for hydropower and other renewable technologies when the next revaluation takes place.
"To date, we have no evidence of hydropower projects ceasing to operate due to unsustainable costs.”
