Drax are calling for dramatic changes in the way hydro power is funded as they reveal more details of a £500m plan.
The firm is calling for a change in UK government policy, which they say will spur them on to invest the cash in Cruachan Power Station in Argyll.
The ambitious move will allow the company to double its hydro electricity production at the famous Hollow Mountain.
Sited 19 miles from Oban by Loch Awe, it will be the biggest energy infrastructure project in Scotland for 40 years.
And it will provide 900 jobs during the six year construction period.
Cruachan 2 could be operational by 2030. It will be located to the east of the existing cavern.
Two million tonnes of granite to be excavated
Around two million tonnes of granite will be taken out of the mountain to make way for the new power station.
The cavern will be large enough to fit Big Ben on its side and provide 600MW.
Pumped storage hydro is flexible. It provides electricity to the national grid when the wind doesn’t blow and the sun doesn’t shine.
Consumers save money, because the need for wind farms to be paid to turn off when they are generating excess power is reduced.
Wasted wind power cost £806m
Richard Gow, senior government policy manager at Drax, said: “It is estimated that wind curtailment cost £806million in 2020-2021.”
Tunnels to Cruachan 2 will be separate from the existing station during construction. They will later be connected.
The reservoir will have its own intake for Cruachan 2.
With the crisis in Ukraine, energy security is more important than ever, said Ian Kinnard, Scottish Assets Director.
Last month the National Grid warned of possible power cuts in the coming winter.
Drax is calling on the UK Government to introduce a new revenue system that will give confidence to investors.
Making the final investment decision
Mr Gow said: “To be able to make a final investment decision, we need the UK Government to introduce a new revenue stabilisation mechanism which will give confidence to investors.
“We believe what’s known as a cap and floor regime is the best way to do this. A floor price ensures that the project will receive a minimum rate of return should market revenues be unexpectedly low and also ensures, through the cap, that excessive revenues are handed back to consumers.”
He added: “Pumped storage hydro is absolutely key to getting more renewable power onto the grid. It is reliable, flexible and provides lifeline support services to the grid to help keep the lights on.”
The system can absorb excess power generated by technologies like wind.
History of Cruachan Power Station
The existing power station is more than half a century old, housed within the hollowed out Ben Cruachan with its mountain dam.
When there is excess electricity, the power station draws water from Loch Awe.
The reversible turbines pump water up to the dam where it is stored. The water is released back through the turbines to generate quick and reliable power when demand increases.
Maximum production can power the needs of an entire city.
It is hoped Cruachan 2 will be approved by the Scottish Government within the next year.
With a commitment from the UK Government to bring forward a policy mechanism to support the deployment of this technology, Cruachan 2 could be operational by 2030.
The UK Government has been contacted for comment.
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