Ian Kinnaird, Scottish Assets & Generation Engineering Director at Drax Group
Over the past decade, Scotland’s business community has put net zero at their heart of their future growth plans.
Changing how your business or industry operates is never easy, but doing so amid the dual challenges of a pandemic and a cost-of-living crisis makes it all the harder. If net zero was a race, then we know we have many more hurdles to overcome before the finishing line.
One of those hurdles is known as the ‘energy trilemma’. This is the challenge of ensuring a reliable supply of energy, keeping the cost of it low, and protecting the environment. It’s a tough balance, as focusing too much on one goal can cause problems with the others, like relying on cheap but polluting energy sources, or using cleaner energy that might be more expensive or less reliable.
In the last decade, the UK has decarbonised its power grid faster than any other major economy thanks to the growth in renewables. But what happens to our power grid when the wind doesn’t blow, or the sun doesn’t shine? How can we have a green grid but at the same time have secure power supplies at an affordable price?
At Drax, we believe pumped storage hydro is a critical technology which can help solve the UK’s energy trilemma. It’s the only proven grid-scale technology which can store vast quantities of energy for long durations. 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 when demand requires.
Drax is progressing plans to build a new pumped storage hydro plant at our existing Cruachan facility in Argyll. Like the existing plant, the new power station will be built underground inside 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 development – which could be the first newly constructed plant of its kind in the UK in more than 40 years – will give the UK a more secure, affordable, and sustainable power grid. It would be a transformative project, creating jobs across its supply chains during its construction. It’s exactly the sort of shot in the arm Scotland’s economy needs at this time.
However, the UK’s policy and market support mechanisms are currently unsuitable for pumped storage projects. No new plants have been built here since 1984.
Alongside other developers, Drax is calling on the UK Government to help secure billions of pounds of private investment to get these projects off the ground. The case for introducing a new policy mechanism, such as a cap and floor, to provide revenue certainty to these types of projects is overwhelming.
This scheme lets investors see the highest and lowest possible earnings of a project over time, making it less risky and more attractive to invest in. It also ensures value for consumers, as companies return any extra profits and receive support only if their earnings fall below a set minimum.
By working in partnership with business, this is one big hurdle government can knock down in the race to net zero.
