Energy company Drax Group has secured consent from the Scottish Government for its plans to build a £500m underground pumped storage hydro plant in its “hollow mountain” Cruachan facility in Argyll.

Drax is aiming for the new plant to be operational as soon as 2030, with almost 1,000 jobs created and supported during development if it secures required support from the UK Government.

Scotland’s First Minister Humza Yousaf visited Drax’s iconic power station on the shores of Loch Awe today where he underlined his call for the UK Government “to provide an appropriate market mechanism for hydro power and other long duration energy storage technologies.”

Mr Yousaf recently wrote to the Prime Minister urging him to take action so developers can have the certainty required to build the new generation of pumped storage hydro plants. 

He said: “Hydro power has real potential to play a greater role in our transition to net zero, and to help ensure a resilient and secure electricity supply across the UK.”

Drax described today’s decision as a significant moment in Scotland’s journey to net zero, with new long-duration storage plants critical to enabling more wind and solar power to come online in the next decade. 

The new 600 MW plant at Cruachan is part of a wider £7 billion strategic investment plan by Drax in clean energy technologies between 2024 and 2030, such as long duration storage and bioenergy with carbon capture and storage (BECCS), which tackle climate change and enhance national energy security.

Constructed adjacent to the existing underground facility, the plant would effectively more than double the site’s total generation capacity to over 1 GW.

Drax acquired Cruachan alongside the Galloway and Lanark hydro schemes in 2019, helping to make the company a leading provider of flexible, renewable power generation.

Will Gardiner, Drax Group CEO, said: “This is a major milestone in Drax’s plans to build Britain’s first new pumped storage hydro plant in a generation.

“These plants play a critical role in stabilising the electricity system, helping to balance supply and demand through storing excess power from the national grid. When Scotland’s wind turbines are generating more power than we need, Cruachan steps in to store the renewable electricity so it doesn’t go to waste.

“With the right support from the UK Government, Drax will invest c.£500m to more than double Cruachan’s generating capacity and support almost 1,000 jobs across the supply chain during construction.

“The expansion of Cruachan requires an updated financial stabilisation mechanism from the UK Government. The current absence of a framework for large-scale, long-duration storage technologies has resulted in no new plants being constructed in the UK since 1984, despite their critical role in the decarbonisation process.”

Morag Watson, director of policy at Scottish Renewables, said: “We know that six projects currently under development in Scotland will more than double the UK’s pumped storage hydro capacity to 7.7GW, create almost 15,000 jobs and generate up to £5.8 billion for the UK economy by 2035.

“Therefore, we urgently need the UK Government to clarify its support for pumped storage hydro projects, deliver the investment framework needed to get these shovel-ready projects into construction and unlock the huge value these projects promise to deliver.”

Pumped storage plants act like giant water batteries by using reversible turbines to pump water from a lower reservoir to an upper reservoir which stores excess power from sources such as wind farms when supply outstrips demand.

These same turbines are then reversed to bring the stored water back through the plant to generate power when the country needs it.