SSE makes £100m “down payment” on Coire Glas hydro project

The announcement is being made today as part of a visit by Scotland’s cabinet secretary for net zero, Michael Matheson, to SSE’s Pitlochry Dam and Hydro Station.

Located on the shores of Loch Lochy, between Fort William and Inverness in the Scottish Highlands, the Coire Glas project is expected to require a capital investment of more than £1.5bn.

The project, which received planning consent from the Scottish Government in 2020, would more than double Britain’s total current electricity storage capacity, with Coire Glas capable of delivering 30GWh of long duration storage. The scheme would take excess energy from the grid and use it to pump water 500m uphill from Loch Lochy to a vast upper reservoir where it would be stored before being released to power the grid when wind output is low and customer demand is high.

SSE hopes to make a final investment decision on Coire Glas in 2024, subject to positive development progress and the prevailing policy environment, and to fully construct and commission the pumped storage scheme by 2031.

Around half of the £100m investment will be allocated to the project’s pre-construction refinement phase, including site investigation works which Strabag started in December last year. The company is building a tunnel approximately 4m wide and up to 1km long, cutting into the hillside towards the proposed location of the underground powerhouse complex.

In July last year SSE received six tenders submitted for the civil engineering and mechanical and engineering works. The six shortlisted tenderers are:

For the civil engineering scope:

• Bechtel Ltd, Acciona Construcción SA and Webuild consortium
• BAM Nuttall Ltd, Eiffage Génie Civil SA and Marti Tunnel AG consortium
• Dragados SA and BeMo Tunnelling UK Ltd consortium
• Strabag UK Ltd

For the mechanical and electrical plant scope:

• Andritz Hydro GmbH and Voith Hydro GmbH & Co KG partnership
• GE Hydro France

It is expected that one preferred tenderer will be selected for the mechanical and electrical scope and two for the civil engineering works.

The selection of the preferred civils tenderer, who will work with the chosen mechanical and electrical tenderer to construct Coire Glas on a turnkey basis, is scheduled for autumn this year.

SSE’s £100m commitment to further developing Coire Glas comes as it awaits the UK government’s decision on how it intends to financially support the deployment of long-duration electricity storage, as set out in last year’s British Energy Security Strategy.

Net zero and energy secretary Michael Matheson said the Scottish government had long been supportive of pumped hydro storage capacity but it was critical that the UK government put in place the appropriate market and regulatory arrangements to support the industry’s development as a matter of urgency.

“Only with a supportive policy environment can this sector realise its full potential,” he said.

SSE finance director Gregor Alexander said Coire Glas would be one of the most ambitious energy infrastructure projects the UK had ever seen.

“Our investment commitment today… signals a significant down payment by SSE to keep this critical project moving forwards. And our ability to reach a positive final investment decision will clearly depend on the prevailing policy environment for long duration electricity storage and long-term infrastructure projects more broadly,” he said.

“Whilst Coire Glas doesn’t need subsidy, it does require more certainty around its revenues and it is critically important the UK government urgently confirms its intention on exactly how they will help facilitate the deployment of such projects.”