AN EDITOR whose newspaper has criticised a renewable energy levy on household bills is expected to reap the benefits of a new hydro scheme at his Highland estate.

The project being built on Paul Dacre’s estate north of Ullapool owned by the editor-in-chief of the right wing Daily Mail, stands to earn over £15m over the next 20 years.

Most of the money will come from the levy on all consumers’ energy bills, but guaranteed by the government to renewable energy producers. The peer is editor-in-chief of the Daily Mail which has carried critical coverage of this support in the past.

But Mr Dacre’s family share from the Wester Ross hydro should be double the £2.45m they paid for the 17,000 acre Langwell Estate north of Ullapool in 2009, with nearly another £1m on top.

Planning permission for the 1.2MW hydro scheme including powerhouse, buried pipelines, replacement footbridge access track, and increasing the size of the existing dam on Loch a’Crois, was granted by the Highland Council almost two years ago.

Work began last July and is due to be completed in the autumn.

The applicant was DHG Hydro Ltd, whose HQ is in London. It bills itself as “one of the largest privately owned hydro-electric developers” in the UK.

But the £4.25m hydro scheme is owned by Canaird River Company Ltd, based at Langwell Lodge, the big house on the estate. Company annual reports show there are four directors:

James McKellar, DHG’s Financial Director and Nick Curtis DHG’s Commercial Director. The other two Paul Dacre, and Alexander Peter Dacre, understood to be his son, who are the Langwell Estate Family Partnership, quoted as shareholders.

The annual reports indicate DHG owns 60 per cent the Dacres 40 per cent, with parties entitled to share revenues accordingly.

The timing of planning consent on on August 26 2014 was crucial to the scheme’s financial prospects. According to the energy regulator Ofgem under the Feed in Tariff (FIT) scheme, hydro schemes with installed capacity greater than 500kW but less than 2MW, were guaranteed to be paid 12.8p per kilowatt hour if planning permission was granted from April 1 to September 30 2014.

After that the rates fell as the UK Government cut its support for renewable energy.

However, one industry insider explained that the calculation was more complicated.

“Larger schemes like this one at 1200kw normally have a load factor of 30 to 40 per cent, and that is the percentage of FIT money they would earn for producing the power. But in this case because there is a loch and a dam, it could be greater than 40 per cent.

“However it is highly likely that in addition to FIT, this hydro will have a power purchase agreement with a power company for exporting it on to the grid. That could easily be 5 or 6p per kilowatt hour. The details of such agreements are commercially confidential, but at a conservative estimate, this scheme could be easily earning another 5.2p, giving a total of 18p per kw hour.”

With a capacity of 1200kw that would mean £216 an hour, but with a 40 per cent load factor that is reduced to £86.4 an hour or £756,864 a year for 20 years, the life of the FIT payments - a total of £15,137,280

The Herald approached the estate, its representatives and DHG Hydro Ltd, but there was no comment on the figures.

John Finnie Scottish Green MSP for the Highlands and Islands, said. “I am all in favour of hydro development. But it seems while some press barons attack public support for green energy in their day job, when they become Highland landowners they are happy to profit from it.”

Meanwhile down the road Lochbroom Community Renewables Limited (LCR) is trying to raise £900,000 before the end of September to build a small 100kw hydro on the Allt a’ Mhuilinn burn nine miles south of Ullapool, which flows into Loch Broom. So far under £250,000 has been committed.

Dave Maxwell, a volunteer director of the Ullapool-based BroomPower, said “Langwell isn’t really a rival to us. They are on a different scale. We are a scheme for the wider community around Ullapool and are still at the fundraising stage. We are trying to attract investors across the UK.”

They would a 4 per cent return. “That is pretty good these day. But the rest of the money will go back to local community projects.”