It was to be Europe's biggest on-shore windfarm and would have powered one in every 10 Scottish homes. But the islanders of Lewis did not fancy their unique peatbogs marred by 181 turbines. They objected in their thousands and last week were rewarded when the Scottish Government vetoed the scheme.

Environmental groups, along with the renewables industry, are devastated, claiming that the UK will be unable to meet its target for 15% of clean energy by 2020. With hundreds of windfarms held up by planning disputes, doom and disaster is forecast.

Is the future really more black than green? Some experts claim we already have an abundant, untapped supply of green energy and the technological expertise to develop it. It's not in the air - it's in the water, something Scotland has in abundance.

Hydropower is a tried-and-tested method of generating electricity and is an area in which Scottish engineers traditionally excel. In the 1940s and 1950s, it was seen as a way to modernise the then remote Highlands. It was embraced by Tom Johnston, the Labour Scottish secretary, to bring heat and light into dark crofts and to provide skilled jobs in rural areas.

The schemes built under Johnston's stewardship have lasted well. Almost 12% or 1.3GW of Scotland's electricity comes from hydropower. It could be much more. Less than a third of the lochs and rivers identified as suitable for dams in 1944 have been developed. Only one significant hydropower plant has begun construction in Scotland in the past 50 years, at Glendoe, near Fort William. It is due for completion next year.

The Scottish Nationalist government has an even more ambitious renewables target than Westminster - 50% of electricity by 2020 without any help from new nuclear stations. So it is perhaps time for Alex Salmond to go back to the future and draw inspiration from Johnston.

Tom Douglas, a consultant at the engineering firm Mott MacDonald, is one of the few professionals still working who has personal experience of Scotland's hydro heyday. As a young engineer in the 1940s, he worked for the firm tasked with identifying potential hydropower sites. Asked why Scotland had embraced the technology with such enthusiasm, he replies: “The real reason was one man: Tom Johnston. He was the champion.

“It was very well organised by the Hydro Board. You didn't have this wretched business of European Union rules. We had a sense of mission. It was done without the constraints of today's world.”

He remains evangelical about the potential of hydropower. In a study paper he wrote for the then Department of Trade and Industry seven years ago, he calculated we could double the power we generated in this way. He said Scotland had 1.4GW of undeveloped capacity in “technically feasible” locations.

Of the 102 sites identified in 1944, only 29 were developed, as other forms of energy - nuclear and gas - became more popular.

“There's considerable potential,” says Douglas. “These old figures need a proper update ... but my guess is that all of the [undeveloped] schemes would be viable options.

“We still have the original plans, although they would have to be reconsidered in terms of layout, economics and investment.” But just as hydro was overtaken by the nuclear craze of the 1950s, it suffers today from our tendency to favour the new.

Alan Ervine, professor of water engineering at Glasgow University, also believes that only half of the potential sites have been developed. “Just now, it's far more sexy to be talking about wave power, tidal current power and on- and off-shore wind, whereas the hydro potential in Scotland is not fully developed,” says Ervine.

“Hydropower is far cheaper compared to other renewable sources. Each of the large dam schemes will probably last for 100 years. So they have good cost-effectiveness.”

There are signs that hydro may have a new political champion. Jim Mather, Scotland's energy minister, has commissioned a report into the technology that is due next month.

The minister, a native Highlander who is said to be “wildly enthusiastic” about hydro, has even requested a meeting with Douglas. But the engineer warns that any politician backing hydro faces pressure from power companies concerned about costs and environmentalists worried about the effect on rivers and fish.

“On a recent exercise we did for a private client, we updated our assessments and [provided] a selection of schemes, in areas that would be reasonably easy to connect to the grid,” says Douglas. “Having looked at the figures, they went for further wind investment, for the simple reason that it is hugely subsidised. As a personal view, I would get rid of all subsidies, because I think there is a tendency now to invest purely on the short term, for a quick return.”

Hydropower requires damming glens to create the water pressure required to turn the turbines, or river flow schemes, which can affect the water level downstream. A 13-mile stretch of the River Garry, a tributary of the Tay, was drained as a result of an earlier hydro scheme. But done sympathetically it is a cost-effective and reliable source of energy, because the supply can be turned on and off in response to demand.

At Glendoe, a £140m project is under way to build a dam, tunnels to collect water and a hydropower station deep inside a cavern below ground level. It will produce about 100MW of electricity, enough to power a city the size of Glasgow.

Another politician who is sympathetic to more hydro schemes is Brian Wilson, the former UK energy minister. “Remember that the only reason Scotland can set higher targets for renewables than the UK as a whole is because of what was done with hydropower 40, 50 years ago,” said Wilson.

“I'm in favour of looking at every potential scheme. But nobody's going to do it unless they're reasonably confident of not running into major environmental confrontations. There has to be a political will to put renewable energy before the blocking powers of the environmentalists.”

But if hydro faces opposition from vested interests, that's nothing new. In the 1940s, Johnston fought off challenges from the Coal Board, which saw other forms of energy as a threat.

“A heck of a lot of people seemed to be against it,” recalls Douglas. “The biggest group against it were the coal miners, because they thought they were going to lose out on the post-war development of coal. But Tom Johnston was the political driving force.”

If Johnston could face up to the miners, with their special place in the Labour party, perhaps Mather will find it comparatively easy to see off hydro's 21st-century opponents.

However, Scottish and Southern Energy (SSE), which is developing the scheme at Glendoe, says it will be the last hydro plant of its size in Scotland.

“The guys that built hydro in the 1940s, 1950s and 1960s knew what they were about. They developed the good and easily developed schemes,” says Peter Donaldson, renewable generation manager at SSE.

“What's left is technically more difficult, like Glendoe, which adds to the capital expense. Then there are environmental constraints on other sites. It's a case of finding a balance between global environment and local environmental impact.”

The Holyrood government has established a forum on renewable energy, a liaison group between state and industry representatives, which includes a hydropower subgroup. That group has been commissioned to study the resources for hydropower.

“It's to see if there are ways to narrow the gap between theoretical potential and practical potential,” says Jason Ormiston, chief executive of industry body Scottish Renewables. “This report will come up with recommendations for trying to do that. We are hopeful it will identify there is still quite a lot to play for.”

Douglas is in no doubt that Scotland's hydropower potential has not been fulfilled, but he believes it will require a unified approach, rather than leaving each power company to follow its own course. “There is a huge long-term return to those who are prepared to do it,” he says.

“There's at least the same potential as has been developed, but only on a planned basis. In other words, individual schemes will not fit the bill as far as private investors are concerned.”

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