Tag: pumped storage hydro

To solve northern power bottlenecks, future-proof the grid and UK’s energy storage

29 September 2026

Opinion

This article has been republished with permission from The Sunday Times Scotland.

Britain is making meaningful progress in developing a lower-carbon electricity system, thanks in large part to northern low-carbon generation.

The next challenge is building networks and sources of flexibility that can make the most of that investment, while supporting the growth of businesses and communities across the country.

Britain’s energy system is changing rapidly, and as it does it reshapes how regions are positioned to compete for opportunities to grow and prosper.

Offshore wind has become a major source of electricity, solar is growing rapidly, and investment into onshore renewables, energy storage and other forms of generation continues to advance.

Changing how we generate electricity also changes the demands we place on the grid.

One of the most noteworthy challenges is simply where electricity is being generated compared with where it is being used.

Why is electricity generation concentrated in Scotland and northern England?

A majority of the UK’s new generation and storage is being developed in Scotland and the north of England. Together, these areas account for more than half of Britain’s low-carbon generation capacity, while representing less than a fifth of electricity demand.

So, when the wind is blowing strongly in Scotland, for example, there can be a significant electricity surplus produced in the north while demand is much higher elsewhere.

Transmission lines whisk most of this power away to other regions experiencing higher demand, but there are limits to how much the system can handle at one time. Once those limits are exceeded, generators are often compensated to reduce their output – and the UK has already paid out more than £1bn in wind curtailment costs this year.

Solar adds another dimension. Large solar farms are now an established part of the generation mix, while thousands of homes and businesses are generating their own electricity from rooftop panels.

On a sunny summer day, solar can make a significant contribution to meeting demand but, naturally, output varies throughout the day and falls away altogether overnight.

Wind and solar are very different technologies, but they have something important in common: their output depends on the weather, and neither is guaranteed to produce electricity at the same time or place as it is needed.

Energy storage from technologies such as batteries and pumped hydro storage can soak up some of this excess power and deploy it when demand is high but, despite a recent battery boom, capacity today is still nowhere near the levels needed to utilise all of it.

Why does Britain need more transmission capacity?

To reduce our reliance on power redirection, there is a clear need to improve the network itself. That means continuing to invest in high-voltage transmission infrastructure, including new lines and subsea connections.

High-voltage direct current links will also have an important role to play in moving large amounts of electricity between regions.

This is particularly relevant as electricity becomes more important to the wider economy.

We need to think about the electricity network not just in terms of keeping the lights on, but as part of the infrastructure that supports economic growth.

A business deciding where to build a new factory, data centre or other major facility needs to know that it will be able to get the electricity it requires. Long connection times can make that decision much harder.

How is clearing grid connections backlog helping viable projects move forward?

The legacy first-come, first-served approach left more than 700GW of projects waiting for grid connections, including projects that are less likely to get built or less strategically vital. Prompting the National Energy System Operator’s (NESO) move towards giving greater priority to projects that are viable and strategically important is a sensible development.

We need to make sure that genuine projects can progress, while avoiding a system where network capacity is effectively reserved for projects that are less likely to go ahead. Getting this right will help unlock investment that is currently waiting on the sidelines.

What role do energy storage and flexible generation play in an efficient system?

A system that is increasingly reliant on wind and solar needs to be able to respond to generation changes and demand mismatches.

To maximise renewable generation at scale, the system needs to adapt seamlessly, shifting power across timelines and geographies to meet demand head on. When a diversified generation and storage portfolio is paired with a flexible grid, the system can absorb volatility to keep reliability, affordability and sustainability all stable under pressure.

Our acquisition of Scotland-based asset optimisation platform Flexitricity earlier this year reflects a key component of this mix, incorporating a tech-enabled solution to help streamline how and when organisations use power in response to the needs of the system. Long-duration storage, including pumped hydro, can also help by storing electricity when it’s abundant and releasing it when it’s needed.

Gas and biomass generation can also provide dispatchable power when the system needs it, helping to provide the reliability that consumers and businesses expect. As the generation mix changes, having a range of technologies that can respond at different times will become increasingly important.

It’s critical to remember that no single technology can solve every problem. The electricity system of the future will need the right combination of generation, transmission, storage and flexibility to meet projected demand consistently.

Powering future economic opportunity with a stronger electricity grid

Power is essential to all economy opportunity, and reliable access to power is a game-changing differentiator at both the regional and national level.

As electrification continues to advance across major industries ranging from technology and transportation to manufacturing and healthcare, it’s increasingly clear that power has become a prerequisite for growth.

At the same time, building and upgrading the grid requires engineers, construction workers, manufacturers and a wide range of specialist businesses. Developing energy infrastructure can support skilled jobs and supply chains across the country.

There is an opportunity here to make sure the benefits of the energy transition are felt beyond the places where electricity demand is highest. Scotland and the north of England have enormous renewable energy potential, and better connections can open opportunities and help attract industries that want access to clean and reliable power.

That could be particularly important as Britain looks to strengthen its industrial base and compete for investment in areas such as manufacturing, technology and other energy intensive industries.

Companies like Drax are already working to build out the right mix of low-carbon generation and storage to meet the needs of the future. The next step is to ensure the infrastructure surrounding that generation is capable of keeping pace.

A stronger transmission network, a more effective approach to grid connections and a good mix of flexible technologies will allow us to make better use of the electricity we are already generating.

It will also give businesses, consumers, investors, and governments greater confidence that the power they need will be available when and where they need it.

The energy transition is changing not just how Britain generates electricity, but where that electricity comes from and how the energy system as a whole needs to operate.

If we build the right system, developing the network alongside our changing generation mix, that flexibility will help to insulate against market shocks, improve affordability, unlock future innovation, and strengthen our collective competitiveness for current and future economic opportunities.

First Minister visits Cruachan Power Station as £80 million upgrade progresses

11 August 2026

News

Scotland’s First Minister John Swinney visited Drax Group’s Cruachan ‘Hollow Mountain’ Power Station, near Oban in Argyll, on Monday to see progress on an £80 million upgrade and refurbishment of the iconic pumped storage hydro plant.

Carved into the interior of Ben Cruachan, the plant was the first large-scale reversible pumped storage hydro facility in the world when it was opened by the late Queen Elizabeth II in 1965. Today it continues to play a vital role in balancing the electricity grid and supporting the country’s transition to clean power energy grid by storing excess renewable electricity at times of low demand.

During the visit, Mr Swinney toured the underground power station and met Drax colleagues involved in operating and maintaining the site, as well as those delivering the major refurbishment works which will increase Cruachan’s generating capacity.

The investment will see two of Cruachan’s generating units refurbished alongside the replacement of all four of the plant’s main inlet water valves. Each water valve weighs as much as three double decker buses, and in one minute can transport enough water to fill an Olympic swimming pool.

First Minister John Swinney said:

“Pumped hydro storage is a technology with a long heritage in Scotland, and Cruachan Power Station a powerful example of how we can make our energy system more resilient and flexible for the future.

“As Scotland transitions to net zero, energy storage solutions like batteries and pumped hydro will be crucial in helping us scale up our renewable generation and ensure stability and security in our electricity supply.

“It was a privilege to be able to see first-hand the progress being delivered to upgrade facilities and meet some of the skilled workers involved in this iconic feat of engineering.

“The work underway at Cruachan demonstrates how Scotland’s vast renewable capacity continues to grow – with a strong pipeline of future projects providing well-paid, sustainable jobs and securing lasting benefits for communities.”

Steve Scott, Plant Manager at Cruachan Power Station, said:

“Cruachan is one of Scotland’s great engineering achievements and remains central to the country’s clean energy future. As more renewable power comes onto the system, flexible assets like Cruachan will be vital to keeping the grid stable and secure, storing power when there is too much and generating it when homes and businesses need it most.

“It was a pleasure to welcome the First Minister to Cruachan and show first-hand the scale of the work underway, as well as introduce some of the skilled people who keep this remarkable power station operating for Scotland and the wider UK energy system.”

Cruachan supports the national grid by releasing water from its upper reservoir to flow through its turbines and into Loch Awe below. The flow of water rotates the turbine which in turn rotates a generator to produce electricity. Excess electricity from the grid can at other times be used to drive the turbine in the opposite direction, pumping water from Loch Awe up into the upper reservoir, storing it for use later like a giant water battery.

Drax has a significant and growing presence in Scotland. Alongside Cruachan, the Group owns and operates the Lanark and Galloway Hydro Schemes, has acquired Edinburgh-based Flexitricity, added new wind and solar assets, and is progressing two battery energy storage system developments. Together, these assets are helping support a cleaner, more secure energy system.

ENDS

Media contact

Aidan Kerr
E: [email protected]

About Drax

Drax’s purpose is to enable a zero carbon, lower cost energy future. Our strategic aims are to be a UK leader in flexible, renewable generation and a global leader in sustainable biomass pellet production.

Our operations

Drax owns and operates a portfolio of flexible, low-carbon and renewable UK power assets – biomass, hydro, solar, wind, pumped storage and OCGT generation – which provide power and system support services to the electricity grid.

We are the UK’s largest source of renewable power by output, and Drax Power Station is the UK’s largest single source of renewable electricity by output.

Through our pellet production facilities in North America, Drax is a leading integrated producer of sustainable biomass.

Drax supplies renewable electricity to UK industrial and commercial customers, offering a range of energy-related services including energy optimisation, as well as electric vehicle strategy and management.Website: www.drax.com

Why investors are flocking to the energy powerhouse that is Scotland

8 June 2026

Opinion

This article first appeared in The Scotsman. 

The conversation about energy is often framed as a choice: security or affordability, climate ambition or economic growth, urgent action or long-term planning. But that is a false divide. Households, businesses and communities want a power system that is dependable, affordable, and capable of supporting a lower-carbon future.

That was reflected in the recent Scottish Parliament debate, “It’s Scotland’s Energy”, which underlined the growing importance of the subject to the country’s economic future, and increasingly its politics. The debate may have taken place in Holyrood, but the issues it raised matter for all the UK.

Scotland is exceptionally well placed to help solve the UK’s energy challenges. As Britain’s electricity system evolves, long-term investment is increasingly flowing to the places with the renewable resources, engineering capability and network infrastructure to support a more flexible power system. Scotland stands out on all three, and this is being recognised by investors.

Late last year,  ScottishPower announced plans to invest up to £12 billion to transform the grid, and SSE announced it was generating £3.4bn for Scotland’s economy as it delivers on its five-year investment plan.

Scotland’s strengths

Scotland has been central to Britain’s energy story for decades. With abundant renewable resources, a resilient and modern grid, and deep engineering expertise, Scotland has established itself as a true energy hub.

In 2025, Scotland generated record levels of renewable energy, while continuing to export surplus power to the rest of the UK. Its position as an energy powerhouse means it is also home to a highly skilled workforce with generational expertise.

Alongside the dedicated workforce, Scotland’s unique geography and heritage offer significant structural advantages. It’s home to some of Europe’s strongest offshore wind resources, with considerable opportunities for future development. It has long been at the heart of Britain’s hydroelectric industry and remains home to many of the UK’s most important, long-duration energy storage assets.

These technologies may not always attract the same attention as nuclear power or solar parks, but they will be essential to delivering a reliable, low-carbon power system.

Bringing greater stability to the National Grid

Generating renewable power is only one piece of the energy transition puzzle. As more wind and solar power comes online, and as transport, heating and industry continue to electrify, Britain’s electricity system will need to manage rising demand while balancing increasingly variable sources of generation.

Developing a reliable system under these conditions requires technologies capable of responding quickly and flexibly to today’s demands. This means long-duration storage technologies such as pumped-storage hydro and battery energy storage systems, or BESS, will play an even more central role in the transition.

These solutions allow the grid to respond more effectively to supply and demand fluctuations, while aiding long-term system stability. In fact, the National Energy System Operator has identified long-duration energy storage as a critical component of delivering a secure, decarbonised electricity system by 2035.

However, storage alone is not enough to solve the challenge. We also need significant investment in transmission infrastructure capable of moving renewable electricity. As Scotland’s capacity continues to expand, strengthening connections between the regions and nations is also important, lowering system costs and ensuring power can reach homes and businesses across the country.

Reducing exposure to shocks

Recent memory tells us we can’t take energy security for granted. The global gas crisis triggered by Russia’s invasion of Ukraine exposed the vulnerabilities that can emerge when energy systems lack resilience. Even today, UK industrial electricity prices remain among the highest in Europe, creating challenges for competitiveness, manufacturing and investment.

Scotland has worked to create an environment that encourages sustained, long-term investment. Recently, the Scottish Government committed to invest up to £500 million over five years to support offshore wind infrastructure, manufacturing and supply chains. Additionally, the UK Government’s National Wealth Fund, Great British Energy and the Scottish National Investment Bank backed the development of the Pentland Floating Offshore Wind Farm, which could power up to 70,000 homes.

Last month, I saw first-hand how Scotland’s energy assets are supporting the whole of the UK. I visited colleagues at Drax’s Cruachan Power Station in Argyll, which this year celebrated its 60th anniversary, and where we are investing £80m in a refurbishment programme designed to increase generating capacity and strengthen the long-term role of pumped storage hydro in Britain’s electricity system.

At Glenlee in Dumfries and Galloway, which has been generating renewable power for almost 90 years, we  installed solar panels at our plant, making it the first of eight planned solar projects across our Scottish hydro assets. In the wider sector, projects such as Zenobē’s Coalburn battery storage facility demonstrate growing confidence in Scotland’s role as a centre for large-scale energy storage and grid innovation.

The value of investments like these extends far beyond the energy system itself. They support jobs, strengthen local supply chains and generate opportunities for communities. Scotland’s energy strength isn’t just beneath the seabed or in the wind, it’s in its people.

Too often, the energy debate is framed as a choice between competing priorities. In reality, energy security, affordability and decarbonisation depend on one another. Getting them right will help deliver a stronger economy and a more resilient future.

Our shared ambitions require continued support, but investment in the necessary infrastructure is already underway. This is particularly true in Scotland, which will have a pivotal role in helping Britain deliver that future.

The opportunity to strengthen Britain’s energy security, support economic growth and accelerate the transition to a lower-carbon power system is significant – and so is the responsibility to deliver it.

Expanding pumped storage hydro to support the UK’s transition to Net Zero

9 April 2024

Opinion

By Steve Marshall, Drax’s Development Manager 

In July 2023, Drax received development consent from the Scottish Government to build a new 600MW underground pumped storage hydro plant at its existing Cruachan facility in Argyll, which will more than double its electricity generating capacity.

Whilst a major milestone for the Cruachan expansion project, the right support is still needed from the UK Government to facilitate its development and we’re pleased to see some positive progress has recently been made.

During a visit to Cruachan Power Station following last year’s announcement of development consent, Scotland’s First Minister, Humza Yousaf, called on the UK Government to “provide an appropriate market mechanism” for projects including Cruachan’s expansion. Mr Yousaf also 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.

In order to incentivise investment for new-build pumped storage hydro plants, new financial mechanisms are needed to enable investors to back capital-intensive, long-length construction projects that will save consumers and the grid millions. The current lack of these frameworks is a key reason why no new pumped storage hydro plants have been built in the UK since 1984.

Growing the UK’s pumped storage hydro capacity is crucial to integrating more wind and solar power onto the energy grid, enhancing the nation’s energy security while tackling climate change. Pumped storage plants act like giant water batteries 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.

At the start of this year, the UK Government announced that it has selected a cap and floor regime as its preferred investment framework for new large-scale, long-duration electricity storage projects, which is a huge step towards making a new generation of pumped storage hydro plants a reality.

What is a ‘cap and floor’ mechanism?

A cap and floor mechanism works by setting an upper and lower revenue limit an operator participating in the mechanism can earn from a particular asset. The lower revenue limit, or ‘floor’, is the guaranteed minimum amount of revenue that a generation asset can earn. If a generation asset does not generate enough revenue from its operations, this gets topped up to reach that floor level from the system operator using an allocated budget. At the other end of the limit, the ‘cap’ is the maximum amount of revenue the operator can earn from the asset. In cases where an asset’s revenue exceeds the cap, a proportion of the funds earned above the cap threshold are paid back to the system operator and used to reduce the cost of using the system for customers.

The cap and floor mechanism enables private investors in long-duration electricity storage projects, such as Drax’s planned expansion of Cruachan, to have a better degree of confidence by alleviating a significant amount of risk and uncertainty around whether they can recover their costs. Having a predictable revenue stream makes it more likely investors and lenders will support projects with high upfront capital costs. As well as de-risking investment and providing better value for money to customers, a cap and floor mechanism also rewards availability and efficiency, as operators are still exposed to opportunities between the cap and the floor. This includes participating in a number of different markets like the ancillary services markets, where Cruachan is able to earn revenue by providing critical inertia and stability to the grid, ensuring the safe and stable operation of the electricity system. Similarly, wholesale market arbitrage allows Cruachan to respond to price signals both in times of low/high generation and peak demand. These market opportunities incentivise operators to optimise their operations to generate revenue towards the highest end of the cap thresholds, driving innovation and efficiency in the sector. This efficiency is not only beneficial for the operators but also for the overall National Grid, bolstering the stability and reliability of the UK’s electricity supply. This enables projects to benefit from competitive market opportunities and provide services in response to price changes and benefit the consumer by providing critical services that the system needs at a competitive price.

What does this mean for Drax’s Cruachan expansion project and what are the next steps?

The UK Government’s consultation on designing a policy framework to enable investment in long-duration electricity storage ran from 9 January to 5 March 2024, and is now closed.

The consultation proposal of a cap and floor is very positive news for Drax’s planned Cruachan expansion, as it will provide the project with a route to market once the mechanism is in place. Without it, the significant upfront capital expenditure and revenue uncertainty would remain a barrier to investing in the project.

One of the most immediate benefits of pumped storage hydro is that it provides extremely quick back-up during periods of peak demand. For example, when deployed alongside intermittent renewables like wind or solar power, Cruachan can step in to store excess energy and provide it back to the grid when the wind doesn’t blow and the sun doesn’t shine. This reduces the waste and cost to customers associated with renewable curtailment.

With the Government’s ambition to deliver 50GW of offshore wind by 2030 as part of its Net Zero targets, it is in the interest of both Government and the grid to ensure enough storage is available by this point to manage the inherent intermittency of this technology. Pumped storage hydro projects have long construction times, over 5 years in the case of the planned Cruachan expansion. This means that delivery of the mechanism in the near-term is critical to ensuring that it’s available to support the electricity system in the early 2030s and beyond.

What are the benefits of pumped storage hydro for the UK?

A report by Scottish Renewables and BiGGAR Economics recently found that six projects currently under development in Scotland, including the Cruachan expansion project, will:

  • More than double the UK’s pumped storage hydro capacity to 7.7GW.
  • Create almost 15,000 jobs.
  • Generate up to £5.8 billion for the UK economy by 2035.

During its construction phase, the Cruachan expansion is projected to provide up to £73m GVA and over 150 jobs in Argyll and Bute. Across Scotland this increases up to £260m GVA and over 500 jobs, which is a total possible UK benefit of over £470m GVA added to the economy and over 1,100 jobs supported amongst the wider supply chain and indirect local area support.

Pumped storage hydro can also provide a number of extra balancing and ancillary services outside of energy storage and generation, across multiple different markets. These markets play a critical role in ensuring the safe and stable operation of the electricity system by providing grid inertia, voltage control frequency response and restoration services, alongside quick flexible response to price signals both in times of low and peak demand. Being able to support wider services in this manner means pumped storage hydro offers better value for money to both investors and consumers, with an Imperial College study finding that it could help to reduce total system costs like these by between £44m and £316m per annum by 2050.

We look forward to working constructively with the UK Government and other stakeholders to help deliver a policy environment which secures investment, strengthens our energy security, and delivers for consumers. We’re ready to move mountains to tackle climate change.

Find out more about Cruachan’s plans for expansion here: drax.com/cruachan2