The Government must provide financial incentives to harness the massive potential of community renewable energy generation, according to Friends of the Earth. The call comes as a giant hydrodynamic screw is lifted onto site in New Mills, Derbyshire, as part of the UK's first ever community-owned hydro power project.

The fish-friendly, welded steel hydrodynamic screw - 11m long and 2.6m wide - is a modernised version of the 2,000 year-old Archimedean screw, used in ancient times to transfer water into irrigation ditches.

The new version will generate 260,000 kWh of renewable energy every year, which will be used to power a local Co-op store - with any surplus energy sold to the National Grid.

Friends of the Earth is urging the Government to exploit the UK's huge potential for community renewable energy projects. The environmental campaigning group is calling for the Energy Bill to be amended to require energy companies to give long-term contracts that would guarantee a premium price for all renewable energy generated by homes, businesses and communities.

The scheme, known as a feed-in tariff, would make renewable technologies significantly more cost-effective to install. Friends of the Earth's Energy Campaigner, Nick Rau said:

"The potential for this kind of project is enormous - but the Government must provide a financial incentive to encourage their development."

"Ministers must amend the Energy Bill to guarantee a premium payment to homes, businesses and communities for installing small-scale clean energy systems, and help kick-start a green energy revolution."

The Managing Director of Water Power Enterprises, Steve Welsh, who is leading the project on behalf of Torrs Hydro New Mills Ltd said:

"I can't quite believe that, literally, the driving force for the project is now in place. It's taken a lot of hard work and commitment from the founding directors of THNM, New Mills Town Council, The Peak District National Park, The Co-operative Group, East Midlands Development Agency and all the people who bought shares to get where we are today, but it just shows what can be done. It's fantastic to think that we're breathing new life into the Torrs and at the same time producing renewable electricity for years to come."