Currently operated as a surface coal mine, the Glenmuckloch project will employ around 327 workers in its construction phase and create up to 15 permanent jobs.

It is being developed by Glenmuckloch Pumped Storage Hydro Ltd – a joint venture between Buccleuch Estates and 2020 Renewables.

The joint venture said the proposed scheme has the potential to become a catalyst for industrial regeneration in the region; however any proposal will require major financial investment from other partners to proceed. Meetings have taken place with the UK government to discuss the need for a stable revenue mechanism that will encourage investment.

Alan Baker, managing director of 2020 Renewables, said: “Pumped storage brings considerable benefits to the country’s energy system. Major pumped storage schemes already exist in Scotland – for example at Foyers and Cruachan – but no new projects have been built in over 30 years.

“The challenge is in finding the package of support measures which will unlock private investment in the project. We have been working with the UK and Scottish governments and others to find a way to make this work. A successful project will be a major driver of economic activity and growth across the region.”

John Glen, chief executive officer of Buccleuch, added: “For five years we have been working closely with the local community and Hargreaves Surface Mining to restore and transform the site. Our vision is to create an energy park that will support local jobs and deliver major new investment in Dumfries and Galloway, and that has taken a step forward today.

“Renewable energy offers great opportunities for the area and the combination of pumped storage and on-site wind generation are a very natural fit. Viewed together as an integrated system, they would act as a catalyst for economic growth and could form a central plank of a collaborative regional industrial strategy that would generate new jobs and economic growth.”

Pumped storage hydro electricity stations have the capacity to store large quantities of energy, providing important flexibility in electricity supply when there is a greater proportion of electricity from renewable energy technologies.

The Glenmuckloch pumped storage facility will have a 400 MW capacity.

The Glenmuckloch site already hosts two community-owned wind turbines, and Buccleuch subsidiary, Glenmuckloch Renewable Energy Limited, recently received planning permission from Dumfries and Galloway Council to build eight 3.2 MW turbines.

Cabinet secretary for economy, jobs and fair work, Keith Brown, said: “Renewable energy sources generated more than 56 per cent of gross electricity consumption in Scotland in 2015, helping support our world-leading ambitions to become a low-carbon economy.

“The Scottish Government believes there is a huge opportunity around pumped storage hydro. This tried and tested technology can support peak demand and effectively store greater levels of electricity at times when renewable energy output is high but demand is low.

“With an installed capacity of up to 400 MW, and supporting 327 temporary and up to 15 permanent jobs, the Glenmuckloch station will help support the local economy in Dumfries and Galloway and support the growth of renewables in Scotland’s energy mix.”

Hannah Smith, Policy Manager at Scottish Renewables, said: “Renewable energy is already providing jobs, investment and direct financial benefits to the communities of South West Scotland.

“The Glenmuckloch development is a perfect example of how green energy projects can make use of the infrastructure of the past and rejuvenate the local economy.

“Pumped storage hydropower allows excess energy generated throughout the day to be stored and used when it’s needed.

“It is vital that the UK government works to recognise the potential of this technology if we are to realise these benefits across the country.”