Consent granted for Drax to expand the Cruachan Power Station as Scotland looks to reignite a sector that hadn’t grown for decades.
The Scottish Government has granted permissions for energy producer Drax to expand its “Hollow Mountain” pumped storage power plant through a £500m investment to more than double its capacity.
The new 600MW plant at Cruachan is part of a wider £7bn strategic investment plan by Drax in clean energy technologies to be delivered between 2024 and 2030. Those technologies include significant focus on long duration storage and the proposed project at the Cruachan plant will expand capacity to over 1GW.
Pumped storage is a valuable asset for a renewables-rich nations like Scotland, enabling excess energy produced through wind and solar to be stored and then released at times of lower renewables production or peak electricity use.
Scotland Net Zero 2045
Scotland has ambitions to be among the first nations on Earth to achieve Net Zero, focusing on a 2045 target, rather than the widespread 2050 aim. To do that, it has opened up land and seas to enable significant expansions of renewable energy production – particularly through wind energy.
To balance out the peaks and troughs in wind production as it becomes Scotland’s largest source of power, pumped storage represents a low carbon option and Scotland’s mountainous and wet terrain is well-suited to it.
However, while Scotland has supported the development of new pumped storage projects, none have been delivered since 1984. This partly reflects the move towards extensive gas-led energy around the time, and partly reflects the high investment cost of pumped storage schemes.
Although assets can run for a very long time, the initial cost of building them is high. And unlike other high-cost energy facilities like nuclear power stations, the UK government does not allow pumped storage investors to engage in Contracts for Difference auctions that help to reduce investment risk.
Scotland seeking a solution
Drax is not the only company seeking to invest heavily in pumped storage in Scotland. SSE has announced plans for an even bigger investment in the Coire Glas scheme on the shores of Loch Lochy in the Scottish Highlands. That scheme would deliver 1.5GW of capacity following investment of £1.5bn in two reservoirs and the power station but, having been approved by the Scottish Government in 2020, the project is still awaiting regulatory market decisions from the UK.
This led the Scottish First Minister Humza Yousaf to say at the Cruachan plant “We know that there remain a number of challenges in developing new hydro power projects in Scotland. The Scottish Government will continue to urge the UK government to provide an appropriate market mechanism for hydro power and other long duration energy storage technologies, to ensure that the potential for hydro power is fully realised.”
That mechanism will not only be needed to deliver greater low-carbon energy capacity for the UK – which itself has a legally binding target of net zero by 2050. The value may be significant energy cost savings.
Research by Imperial College London found that just 4.5GW of new long duration pumped hydro storage, with 90GWh of storage capacity, would save up to £690m per year in energy system costs by 2050.