Government consultation could boost UK pumped hydro storage

The consultation announcement, made by the Department of Energy Security and Net Zero (DESNZ), delivers on a commitment in last year’s British Energy Security Strategy to have a policy in place to enable private investment in long-duration electricity storage projects by the end of 2024.  

SSE says the move is a positive step in the continuing development by SSE Renewables of the Coire Glas project at Loch Lochy in the Scottish Highlands, where exploratory works are ongoing.  

Subject to being successful in the administrative allocation of an investable cap and floor mechanism, SSE Renewables hopes to make a final investment decision on Coire Glas in late 2025 or early 2026, allowing for main construction to commence in the second half of 2026. Construction is expected to last up to seven years.  

“Confirmation the UK government is now consulting on an adapted cap and floor mechanism for long duration electricity storage assets is welcome news for the development of pumped hydro storage technology in the UK,” said SSE Renewables, director of onshore Europe, Finlay McCutcheon.

He said the project teams were making “steady progress” on exploratory works at Coire Glas but the company’s ability “to deliver a project of this scale hinges on reaching a positive final investment decision by late 2025 or early 2026 and will clearly rely on this consultation process yielding an investable cap and floor mechanism to be in place by the end of 2024”.

“Given the time taken to reach this point, much work is now needed to ensure an effective mechanism is finalised and put in place as early as possible this year to enable projects such as Coire Glas to take final investment decisions and move into construction,” McCutcheon said.

In May last year, SSE announced it was providing a £100m boost for the project, with around half allocated to the project’s pre-construction refinement phase, including site investigation works. Coire Glas is expected to require a capital investment of more than £1.5bn.

Strabag is undertaking the investigation works, which include building a tunnel approximately 4m wide and up to 1km long, cutting into the hillside towards the proposed location of the underground powerhouse complex.