Buy-side · Renewable generation & storage
Power is head
times flow.
P = ρ · g · Q · H · η
density · gravity · flow · head · efficiency
So is capital. One number is the drop you are standing on. The other is how much actually passes through it. Everything else in this industry is engineering.
01 — Premise
Almost everyone in renewables is paid when the asset exists.
The engineering consultancy sells design hours. The developer sells a project. The O&M contractor sells a service agreement. The bank sells debt. Every one of them is paid at, or after, financial close.
An acquirer needs the opposite: somebody whose value is highest on the day they say no.
Headrace sits on the other side of the table. We do not build plants and we do not operate them. We take them apart and say what the number really is.
There is a second gap. The advisory market has organised itself around wind and solar, where the assets are standardised and the comparables are published. Small hydro is none of those things: every scheme is a one-off, and there is no price benchmark for the European fleet. That is inconvenient for a large adviser and it is exactly where the work is.
02 — The cliff
A fleet that stopped growing, and the capital that stopped looking.
Nine numbers, all from public datasets, all dated. Together they describe an asset class that nobody is building any more and that is about to lose a large part of its revenue on a known date. Assets in that position change hands.
The fleet
UK small hydro capacity under 5 MW — unchanged since 2023, and below its 2022 peak of 420.15 MW
DESNZ, Energy Trends 6.1, July 2026
New small hydro schemes commissioned per year: fourteen in 2017, effectively none since 2018
DESNZ, Renewable Energy Planning Database, Q2 2026
First generators retire from the Renewables Obligation. The scheme closes entirely in 2037
British Hydropower Association, July 2025
Modelled fall in net cash flow for a 10 MW dispatchable scheme at RO exit, on a 46 % fall in revenue
British Hydropower Association, July 2025
Hydro is eligible in the UK’s Pot 1 and it won nothing in the last allocation round. Italy opened a hydro band under FER X in 2025 and received no expressions of interest at all. Eligible in both markets, awarded in neither
DESNZ, CfD AR7a results, 10 February 2026 · GSE, FER X
The capital
Global annual investment into hydropower against solar. Wind takes another 200
IEA, World Energy Investment 2026
Capacity the EU added between 2016 and 2025 — hydro against solar. Ninety-six per cent of the world’s 2025 hydro growth was in China
IRENA, Renewable Capacity Statistics 2026
Total venture and private equity investment into hydropower worldwide in 2024, across three or four transactions
JRC, Hydropower in the EU — 2025 status report, citing PitchBook
Levelised cost of refurbishing an existing scheme, against 89 for building a new one under 10 MW. Brownfield work runs up to 70 % cheaper than greenfield
JRC, Hydropower in the EU — 2025 status report
The Renewables Obligation closed to new hydro in 2017 and the feed-in tariff closed in 2019. Nothing has been built since, and from 2027 the existing fleet starts coming off support in tranches. Some of those assets will be worth more to a new owner than to the current one. Establishing which is the entire job.
Sources
- DESNZ — Energy Trends, table 6.1, published 30 July 2026
- DESNZ — Renewable Energy Planning Database, Q2 2026, published 3 August 2026
- DESNZ — Contracts for Difference Allocation Round 7a results, 10 February 2026
- British Hydropower Association — Supporting Hydropower’s Transition from the ROC, July 2025
- IEA — World Energy Investment 2026, published 28 May 2026
- IRENA — Renewable Capacity Statistics 2026, published 31 March 2026
- JRC — Hydropower and Pumped Storage Hydropower in the EU, 2025 status report (JRC143929)
03 — The drop
Every scheme is a drop. So is every deal.
A run-of-river plant is five things in a line, and water loses something at each one. A transaction is the same five things, and so does capital.
OriginationIntake
Water enters where the resource is, not where it would be convenient. Deals are the same. Most of what reaches an investor has already been shown to somebody who passed.
What we look for before anything else: why is this for sale, and who has already seen it.
ScreeningHeadrace
The channel that carries flow to the drop. Losses here are small, invisible, and they come off the top of every hour the plant will ever run.
Screening kills most of the pipeline cheaply. That is the entire point of it.
StructurePenstock
The pressure pipe. This is where head stops being height and becomes force. Nothing is recoverable after this point without opening the whole thing up.
Share deal or asset deal, what transfers, what does not, and who keeps the accreditation.
The assetTurbine
The only part most people photograph, and the part that is easiest to replace. Civil works outlive electro-mechanical plant by decades.
Residual life of the civils versus the machine. They are two different assets on one balance sheet.
ExitTailrace
What leaves. It never leaves at the level it entered, and the difference is the only thing that was ever worth measuring.
Exit route, holding period, and what the asset is worth to the next buyer, not to the current one.
04 — The screen
Pick an asset and a market. This is the first page of the memo.
Not a database and not a recommendation. It is the structure of the problem — where the money comes from, what can take it away, and the questions we would ask before anyone opens a spreadsheet.
Asset class
Market
Revenue stack
- —Legacy support where the scheme still holds accreditation — this is usually the largest single line, and it is finite
- —Wholesale sales or a bilateral PPA for the balance of output
- —Embedded benefits from connecting at distribution rather than transmission level
Risk register
- —Hydrology — inter-annual variation is wide, and a short generation record hides it
- —Abstraction licence: expiry date, renewal terms, and any hands-off flow condition that can be tightened
- —Civil asset condition — weir, intake screen, headrace, penstock. Expensive, long-lived, easy to underestimate
- —Fish passage and environmental compliance obligations attached to the consent
- —Grid constraint and curtailment at the point of connection
Diligence questions we would ask first
- 01How many years of metered generation exist, and is the flow record measured on site or transposed from a gauged catchment nearby?
- 02What is P50 against P90, and which one is in the seller’s model?
- 03When does the abstraction licence expire, and on what terms has the regulator renewed comparable licences?
- 04What is the residual life of the civil works, separately from the electro-mechanical plant?
- 05How does this scheme’s load factor compare to the fleet? UK small hydro ran at 38.1 % in 2025 against 30.7 % for large hydro — run-of-river without storage is a different asset from a reservoir, and a seller’s comparables often mix the two. (DESNZ, DUKES 2026)
- 06Does the support accreditation survive a share sale? Does it survive an asset sale?
Market structure · UK
- —The legacy feed-in and certificate regimes are closed to new accreditation. Assets that still hold them are being valued largely on a finite, dated revenue tail.
- —Contracts for Difference are the principal contracted route for new build. Hydro between 5 and 50 MW is eligible in Pot 1 — and won nothing in the AR7a round of February 2026, where solar took 4,905 MW and onshore wind 1,306 MW. Anything under 5 MW is excluded from CfD altogether.
- —The Capacity Market pays for firm availability, derated by technology and duration — material for storage, marginal for run-of-river hydro.
- —Connection queue reform has moved the basis of the queue from application date towards project readiness. Queue position is now a diligence item, not an administrative footnote.
- —A cap-and-floor framework has been developed for long-duration storage, which changes the risk profile of longer-duration assets relative to one-to-two hour systems.
Structural notes. Support schemes, market rules and grid processes change — verify against the regime in force on the day of the transaction.
05 — Models
Two calculators. No assumptions of ours in either one.
Every number below is arithmetic on inputs you set. We publish the formula next to the result so you can see exactly what it did. This is not a valuation and it is not advice — it is the first thirty seconds of one.
Run-of-river hydro
P = ρ · g · Q · H · η ÷ 1000Inputs
Output
Illustrative only. Gross figures before losses, availability, curtailment, opex, tax and financing.
Battery storage
E = P · h · n · 365 · aInputs
Output
Illustrative only. Gross figures before losses, availability, curtailment, opex, tax and financing.
06 — What we do
Five things, and a short list of things we deliberately do not.
Market mapping & screening
Building the picture of what exists in a market and what condition it is in — and killing the candidates that should not reach an investment committee. We do not run a deal platform and we do not present opportunities.
Technical & commercial diligence
Generation records, resource assessment, civil and electro-mechanical condition, licences and consents, grid position, and the revenue model that sits on top of all of it. Owner’s engineer and lender’s technical adviser mandates.
Transaction support
Working alongside the legal and financial advisers on structure, warranties, price adjustment mechanisms and the conditions that actually matter at completion.
Hybrid repowering of existing sites
An operating hydro scheme already holds the three things that now hold new projects back: a live grid connection, secured land, and consents that exist. Assessing what a second technology on that connection would be worth is a specific piece of work, and almost nobody does it.
Portfolio & asset review
After acquisition: performance against the model, contract review, and where a portfolio is leaking value it did not know it had.
What we are not
- We do not develop, build or operate generating assets.
- We do not operate a deal platform, publish investment opportunities, or introduce investors to projects.
- We do not manage client money and we do not hold client assets.
- We do not provide investment, legal or tax advice.
- This website is for general information only and is not an invitation or inducement to engage in investment activity.
07 — Standing
Twenty years of this has a shape, even without a name on it.
This practice was built by people who have sat at every position in the line below — including the ones on the other side of it. We are deliberately not the story. The method is.
Phases worked
- Development
- Financing
- Construction
- Operation
- Divestment
Asset classes
- Small hydro
- Solar PV
- Battery storage
- Hybrid & co-located
Markets
- United Kingdom
- Italy
- Central Europe
Sides of the table
- Seller
- Buyer
- Lender’s adviser
We work under our clients’ names, not our own. Counterparty references are available under NDA.
No individual is named on this site by choice, not by omission.
08 — Contact
Send the asset, not the pitch.
The fastest way to start is four lines. If there is a data room, say so and we will tell you within a week whether it is worth your committee’s time.
Enquiries are treated as confidential. No mailing list, no newsletter.