Finance

SSE announces £100 million investment in Coire Glas pumped storage

SSE announces £100 million investment in Coire Glas pumped storage
(Coire Glas pumped storage project)

SSE announced it is providing a £100 million (US$122.7 million) investment boost into Britain’s Coire Glas pumped storage project.

The announcement was made 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, the Coire Glas project is expected to require a capital investment of over £1.5 billion ($1.8 billion) to construct and, if approved for final delivery, would be the first pumped hydro storage scheme to be built in the UK in 40 years.

The project, which received planning consent from the Scottish Government in 2020, would also more than double Britain’s total electricity storage capacity – providing vital back up to an increasingly renewables-led system and bolstering energy security. 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. At peak delivery, the project would create up to 500 full time construction roles.

Once complete, Coire Glas would be capable of delivering 30 GWh of long-duration storage. Coire Glas could begin generating enough renewable energy for 3 million homes in just under five minutes, SSE said. Critically, the Coire Glas project could provide this level of firm, flexible power for up to 24 hours non-stop.

“Coire Glas … is a key component of SSE’s commitment to helping lead Scotland and the UKs’ energy transition,” said SSE plc Finance Director Gregor Alexander. “The £100 million investment … will help play a crucial role in further advancing the Coire Glas project towards a final investment decision in 2024, which will enable the project to move towards construction. 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.”

The next phase of detailed project design and refinement, construction planning and procurement will progress through 2023 and into early 2024. Around half of the £100 million development investment will be allocated to the pre-construction refinement phase of the Coire Glas project, including a comprehensive package of site investigation works that have commenced and will complete later this year. These include the construction of a major exploratory tunnel to enable the project team to fully assess the geological conditions that will be encountered in constructing the scheme.

SSE’s £100 million commitment to further developing Coire Glas comes as the low-carbon energy infrastructure company 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.

This could include the introduction by the UK Government of a “revenue stabilization mechanism” in the form of an adapted cap and floor scheme to support investment in long-duration storage, SSE said. This would also be alongside broader consideration of how the electricity market, including the Capacity Mechanism and the Flexibility Markets, value the contribution of low-carbon flexible assets such as pumped storage.

“The Scottish Government has long been supportive of pumped hydro storage capacity, which we believe will play a key role in the energy transition and is a vital component of a more flexible, resilient and secure electricity supply,” said Net Zero and Energy Secretary Michael Matheson. “However it is critical that the UK Government puts 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 realize its full potential.”

The delivery of Coire Glas is at the heart of SSE’s Net Zero Acceleration Programme, or NZAP, which commits to investing around £7 million ($8.6 million) a day on critical low-carbon infrastructure needed in the net zero transition.