Drax given green light for new £500 million underground pumped storage hydro plant

Renewable energy leader Drax Group has secured development consent from the Scottish Government for its ground-breaking plans to build a new c.£500m underground pumped storage hydro plant at its existing Cruachan facility in Argyll.

  • Scotland’s First Minister Humza Yousaf called on the UK Government to “provide an appropriate market mechanism” for projects such as Cruachan’s expansion while on a tour of the facility today (Tuesday). 
  • The Scottish Government has formally approved plans to expand the iconic ‘Hollow Mountain’ Cruachan Power Station through building a new underground plant at the site. 
  • The new plant would strengthen UK energy security with flexible generation while enabling more wind power to come online. 
  • With the right support from the UK Government, the new plant could be operational as soon as 2030, with almost 1,000 jobs created and supported during development. 

Renewable energy leader Drax Group has secured development consent from the Scottish Government for its ground-breaking plans to build a new c.£500m underground pumped storage hydro plant at its existing Cruachan facility in Argyll. The decision, made through the Section 36 process, is a significant moment in Scotland’s journey to net zero, with new long-duration storage plants critical to enabling more wind and solar power to come online in the next decade. 

Scotland’s First Minister Humza Yousaf visited Drax’s iconic power station on the shores of Loch Awe today (Tuesday), 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.” Mr 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. 

The new 600 MW plant at Cruachan is part of a wider £7 billion strategic investment plan by Drax in clean energy technologies between 2024 and 2030, such as long duration storage and Bioenergy with Carbon Capture and Storage (BECCS), which tackle climate change and enhance national energy security. Constructed adjacent to the existing underground facility, the plant would effectively more than double the site’s total generation capacity to over 1 GW. 

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. 

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 requires an updated financial stabilisation mechanism from the UK Government. The current absence of a framework for large-scale, long-duration storage technologies has resulted in no new plants being constructed in the UK since 1984, despite their critical role in the decarbonisation process. 

First Minister of Scotland, 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, helping to make the company a leading provider of flexible, renewable power generation.


Media contacts: 

Aidan Kerr
Media Manager
E: [email protected]
T: 07849090368

Editor’s Notes:  

  • Drax applied for development consent from the Scottish Government under Section 36 of the Electricity Act 1989 in May 2022. 
  • The UK Government has pledged to introduce a new policy and market support framework to enable private investment in large-scale, long-duration storage projects by 2024. 
  • A report by KPMG for Drax found that a Cap & Floor regime was the standout solution to unlock private investment in the technology while incentivising system needs to be met efficiently. 
  • No investment decision has yet been taken by Drax and development remains subject to an appropriate regulatory framework among other considerations. 

About Drax  

Drax Group’s purpose is to enable a zero carbon, lower cost energy future and in 2019 announced a world-leading ambition to be carbon negative by 2030, using bioenergy with carbon capture and storage (BECCS) technology.  

Drax’s around 3,000 employees operate across three principal areas of activity – electricity generation, electricity sales to business customers and compressed wood pellet production and supply to third parties. For more information visit www.drax.com 

Power generation:  

Drax owns and operates a portfolio of renewable electricity generation assets in England and Scotland. The assets include the UK’s largest power station, based at Selby, North Yorkshire, which supplies five percent of the country’s electricity needs.   

Having converted Drax Power Station to use sustainable biomass instead of coal it has become the UK’s biggest renewable power generator and the largest decarbonisation project in Europe. It is also where Drax is piloting the groundbreaking negative emissions technology BECCS within its CCUS (Carbon Capture Utilisation and Storage) Incubation Area.  

Its pumped storage, hydro and energy from waste assets in Scotland include Cruachan Power Station – a flexible pumped storage facility within the hollowed-out mountain Ben Cruachan.   

The Group also aims to build on its BECCS innovation at Drax Power Station with a target to deliver 4 million tonnes of negative CO2 emissions each year from new-build BECCS outside of the UK by 2030 and is currently developing models for North American and European markets. 

Pellet production and supply:

The Group has 19 operational pellet plants and developments with nameplate production capacity of around 5 million tonnes a year. 

Drax is targeting 8 million tonnes of production capacity by 2030, which will require the development of over 3 million tonnes of new biomass pellet production capacity. The pellets are produced using materials sourced from sustainably managed working forests and are supplied to third party customers in Europe and Asia for the generation of renewable power.  

Drax’s pellet plants supply biomass used at its own power station in North Yorkshire, England to generate flexible, renewable power for the UK’s homes and businesses, and also to customers in Europe and Asia. 


Drax supplies renewable electricity to UK businesses, offering a range of energy-related services including energy optimisation, as well as electric vehicle strategy and management.  

To find out more go to the website www.energy.drax.com