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by Ian Kinnaird
23 June 2022
Associate Feature: Moving mountains to tackle climate change

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Associate Feature: Moving mountains to tackle climate change

There can hardly be an area of the UK better placed to reap the rewards of the transition to clean, renewable energy than rural Scotland.

In the last decade we have seen dozens of projects successfully deliver not only green power to communities, but thousands of jobs in sectors from engineering to transport. With the scale of the changes needed to make net zero targets a reality, more green energy projects will need to be delivered in the coming years.

At Drax, we are progressing plans to deliver one of the largest infrastructure projects seen in Scotland in a generation. We have applied for planning consent to build a new pumped storage hydro power station at our existing Cruachan facility in Argyll. The development – which could be the first newly constructed plant of its kind in the UK in more than 40 years – will strengthen the UK’s energy security as well as enabling net zero.

Currently, the only proven grid scale technology that can store vast quantities of energy for long durations is pumped storage hydro. These sites act like giant water batteries, using excess power from the grid to pump water to an upper reservoir where it is stored, before re-releasing it to generate electricity.

Drax’s plan to expand Cruachan will be a major infrastructure project which will support around 900 jobs during six years of construction across the supply chain in a range of industries from quarrying and engineering, to transport and hospitality. Around 150 on-site local construction jobs will be created during the development.

Like the existing plant, the new power station will be built underground inside Argyll’s highest mountain, Ben Cruachan. This will be done by creating a new hollowed-out cavern which would be large enough to fit Big Ben on its side.

The project is a solution to help solve a growing problem. Each year, the UK spends hundreds of millions of pounds turning off wind and solar farms as there is either too much power being generated with not enough storage capacity, or there are bottlenecks on the transmission system meaning it can’t be transported to where it is needed.

An independent report commissioned by Drax found the cost of turning off UK wind farms rose from almost £300m during 2020 to over £500m in 2021, contributing to higher energy bills and carbon emissions. In a world dealing with an energy crisis and a climate crisis, we can’t afford to be letting renewable power go to waste.

In pumped storage hydro we have a tried and tested solution to a growing problem, but unfortunately there are barriers to unlocking private investment in this transformational project.
While the UK’s policy and market support mechanisms have evolved to support new build renewables, the current framework isn’t suitable for pumped storage projects that can have a lifespan of many decades. That’s part of the reason why no new plants have been built in the UK since 1984.

Alongside other developers of long-duration electricity storage projects, Drax is calling on the UK Government to take action to help secure private investment to get these projects off the ground. The case for introducing a new policy mechanism to provide revenue certainty to these types of projects, such as a cap and floor, is overwhelming.

This mechanism is tried and tested and has been integral to supporting the roll-out of cross-border interconnectors over the last decade. It enables private equity to see the project’s maximum and minimum revenues over an extended period which reduces uncertainty.

Operators would hand back excessive profits if annual revenues breached the cap. On the other hand, support from the government would only be given in the event revenues do not meet the floor level, providing value for money for consumers.

With the right support from government, Drax can begin the project as soon as 2024. We are ready to move mountains to tackle climate change.

This article is sponsored by Drax.

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