The decision, made through the Section 36 process, represents a significant step in Scotland’s journey to net zero, as these long-duration storage facilities will facilitate the introduction of more wind and solar power over the coming decade.

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

Mr Yousaf visited Drax’s 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”.

The new 600 MW plant at Cruachan forms part of Drax’s broader strategic plan, investing £7 billion in clean energy technologies from 2024 to 2030. This involves initiatives such as long-duration storage and bioenergy with carbon capture and storage (BECCS), aimed at addressing climate change and enhancing national energy security. The new plant, situated alongside the existing facility, will more than double the site’s total generation capacity to over 1 GW.

Pumped storage hydro plants, akin to giant water batteries, are integral to integrating more wind and solar power into the energy grid. Energy is stored 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.

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, however, hinges on the UK government providing an updated financial stabilisation mechanism. The current lack of a framework for large-scale, long-duration storage technologies has halted construction of new plants in the UK since 1984, despite their crucial part in the decarbonisation process.

First Minister Humza Yousaf said: “I’m delighted to visit Cruachan today to hear more about the plans to grow Scotland’s pumped storage hydro capacity through the expansion of the existing facility in Argyll.

“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. The expansion of Cruachan will help to strengthen our energy security by providing much needed resilience in the system, supporting hundreds of jobs and providing a real boost to the Scottish economy.

“However, 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.”

Drax acquired Cruachan alongside the Galloway and Lanark hydro schemes in 2019, growing the company’s position as a provider of flexible, renewable power generation.

Morag Watson, director of Policy at Scottish Renewables, said: “Today’s announcement from Drax and The Scottish Government is not only exciting news for Cruachan power station and the wider renewable energy industry, it’s a really positive step forward for the transition to net-zero in Scotland.

“Long-duration electricity storage, such as pumped storage hydro, will be essential for ensuring energy security and keeping energy bills low for consumers as we decarbonise our energy system. And the extension to the plant at Cruachan is one vital step towards maximising the benefits available from this technology.

“More pumped storage hydro means we can store cheap renewable electricity for when it is needed most, but much more needs to be done to support investment in the technology.

“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.”