I have heard it said that any hydropower plant under 5 MW cannot afford to pay for it's paperwork.

This is a very important point Alan. In fact it really can't be stressed strongly enough. There is a substantial gap, in terms of project size, for renewable energy, where projects are currently being rendered non-viable purely by regulatory barriers to entry. The issues are not technical - they are purely political.

Small systems (50kW and below) are feasible here, if they are associated with a comparable load, because they can set up a net-metering arrangement fairly easily and cheaply. Above that size the regulatory burden (and it's associated cost) is completely disproportionate for projects below a certain minimum size, a size which would vary by jurisdiction and by renewable energy technology. Unfortunately, the gap is where most of the community or farm-based initiatives would fall.

I'm tempted to write another post specifically on this issue, but I'd have to do a lot of research first. I'm also planning to write something on islanding.

By the way, did you hear that the planned Ottawa electrified light rail scheme was derailed by political interference? It might be reconsidered as the jilted construction company is threatening to claim damages against the city for breach of contract, but everything is still up in the air at the moment.

For small hydro, I would STRONGLY recommend MhyLab at

http://www.mhylab.com/fr/index.html

High quality & innovative designs that can be built in small machine shops (CNC capability required).

Smallest they have ever done was 100 watts; largest 1 MW (limit as a non-profit so as to not compete with commerical firms).

Yes, I have been following Ottawa. (I supported the subway section in downtown but I understood & respected both positions). STUPID is about as kind a remark as I can make for recent developments.

Best Hopes,

Alan