The UK Government’s confirmation of a cap and floor regime as the investment framework for new large-scale, long-duration electricity storage projects has been welcomed by renewable energy leader Drax.
Despite their critical role in decarbonisation, a gap in energy policy support has hindered the development of new pumped storage hydro plants for a generation. No new plants have been built in the UK since 1984, leaving the country to fall behind international competitors.
Drax is progressing an option to expand its existing Cruachan pumped storage facility in Scotland through the construction of a new 600 MW plant. Built adjacent to the existing underground plant, the new power station would effectively more than double the site’s total generation capacity to more than 1 GW.
During the construction phase, the project is expected to support around 1,100 jobs across the UK and contribute a potential £470m to the economy. It would be one of the most significant infrastructure projects in Scotland in a generation.
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’s turbines to generate power when the country needs it. This process both strengthens energy security and enables the grid to decarbonise.
Ian Kinnaird, Drax’s Scottish Assets Director, said: “Today’s announcement is a critical step forward to removing one of the key hurdles developers face in building a new generation of pumped storage hydro plants. I would like to thank the new Government for moving at speed to do this within their first 100 days in office.
“Pumped storage stabilises the electricity system, helping to balance supply and demand through storing excess power. When Scotland’s wind turbines are generating more power than we need, Drax’s Cruachan steps in to store the renewable electricity so it doesn’t go to waste.
“We look forward to working constructively with the UK Government and other stakeholders on the next steps of this process so we can deliver in partnership a clean power system by 2030 which strengthens our energy security and delivers for consumers.”
In addition to the proposed construction of a new plant, Drax is currently progressing an £80 million major refurbishment of its existing Cruachan site. The refurbishment will see original parts replaced and the generating capacity of the power station upgraded from 440 MW to 480 MW.
ENDS
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Editor notes
- Drax’s plans to build a new 600 MW pumped storage hydro plant at Cruachan was granted development consent through the Section 36 process from the Scottish Government in July 2023.
- A report by KPMG for Drax found that a Cap & Floor regime was the standout solution to unlock private investment in the technology while incentivising system needs to be met efficiently.
