There is something huge coming out of Loch Ness.
It's not Nessie, but a project that could go a long way to overcoming the drawbacks of renewable energy.
“It is exciting, very exciting,” says Mark Wilson, chief executive of Intelligent Land Investments Group (ILI), whose brainchild the project is.
“With renewable energy, generally, the issue is inconstant supply from offshore and onshore wind; but here we are talking about a project that just doesn’t have those issues at all.”
The technology is pumped hydro storage and the particular project he is referring to is Red John, ILI Group’s £500m development at Dores on Loch Ness.
It is one of a handful that together have the potential to create 10,000 jobs and inject £3bn into the Scottish economy.
Simply put, pumped hydro storage aims to use Scotland’s greatest natural asset - water - to fill the intermittent power generation gap and keep the lights on. It involves pumping water up to a reservoir when there is more energy on the grid than is needed, storing it until the power is needed and the water is released to drive generators.
Red John is the most advanced of ILI’s such projects, that also include a 600MW plan at Loch Awe and a 520MW site Loch Tay.
Those projects are the result of years of work for the group. Wilson explains: “From 2009 to 2016, we were doing onshore wind - while we were on that journey it just became so clear that energy storage had to become part of the energy mix.”
This became evident, Wilson says, from the UK Government announcement in 2015 that “unabated” coal-fired plants were to close from 2025. It became clear to him and his colleagues “working on the front line” that there had to be another solution beyond renewables, because of the intermittent nature of them as a power source.
“So, we looked at all the different technologies. We looked at green hydrogen, which is good, but it’s just not quite there yet. We looked at pump storage, which is what we’re doing. We looked at lithium battery, which we’re also doing. And we looked at compressed air.
“But the reason we went with pump storage is Scotland’s got the topography for it, and you can do it very big-scale, big-capacity: Red John is 450 megawatts.
“That’s a project that will cost somewhere in the region of £500m to build, but it will offset millions of tonnes of CO2 emissions and it will allow significant amounts of renewables onto the system so we hit our net zero targets.
“So, when the sun’s not shining and the wind’s not blowing, it kicks in and powers the grid. It also gives the country - not just Scotland, the whole of the UK - energy security.
“Where a lot of the time we’re relying on interconnectors from Europe with the pump storage projects that are looking to get built in the UK, that can give the UK, and Scotland especially, more security of supply, which is vital.”
When there’s excess wind on the system, the grid will turn those turbines off – this 'curtailment' costs the consumer hundreds of millions of pounds a year. “Rather than doing that, we buy that power at a cheap price, or even for nothing, and we use that power to pump the water from Loch Ness up to an upper reservoir in the mountain and it’s stored there,” explained Wilson.
“Then when there’s a need for it, when the wind’s not blowing, they’re able to hit a button, the water goes down the tunnels underground through gravity, goes through the turbines and generates electricity - it’s that simple and it can be repeated time and time again.”
He also argues that the approach is a long-lasting one, providing answers to Scotland’s energy needs for many years to come.
“Cruachan, which is up near Oban, I think that’s 65 years old now, and was bought recently from ScottishPower by Drax, that will have another life of maybe 50, 100 years on it.
”These things are seriously historic bits of infrastructure - Cruachan was opened by the Queen when she was in her thirties.”
Indeed, Cruachan has been supplying significant amounts of power since October 1965, when the Queen opened what was then the first reversible pumped hydro storage system to be built anywhere in the world on such a scale.
In addition to its supply of power to the grid, Cruachan is also significant in that it has a “black start” capability – when there is a total or partial power shutdown it can restore power without relying on an external power transmission network, something that Red John and the other projects ILI are developing would also have.
Wilson says: “I’m very proud of what we’re doing in ILI: we’re bringing three of these projects to the market and we’re hoping to have them all built by 2030.
“What is exciting is that, coming out of Covid, obviously you need to stimulate the economy, and if you look back in history it’s always been big infrastructure projects that have done that.”
In addition to the three projects with a generation capacity that ILI is developing, SSE, Drax and Buccleuch Estates are also working on pumped hydro storage projects, with SSE having received revised consent from the Scottish Government for its Coire Glas hydro plant near Loch Lochy in Lochaber in the Highlands.
That plant would double the current amount of pumped hydro store capacity in the UK. Research commissioned by SSE from Imperial College London concluded that pumped hydro storage could save up to £690m per year on energy costs by 2050.
Wilson sums up the impact of the projects: “That four gigawatts in total is enough to power London, Glasgow and Liverpool, so it’s quite significant.
”There are 40 gigawatts of pumped energy storage going to be needed on the system by 2050, so there’s still a long way to go - it’s not the answer, but it is part of the solution.”
Even that part of the solution, it comes with significant capital costs – ILI’s projects come with a price tag of somewhere between £2bn and £2.5bn.
Wilson argues that, while the capital costs are significant, there is funding out there. “We’ve been approached by more than 18 global infrastructure funds in the past two years - at the moment there are six global infrastructure funds in our data room looking at Red John.”
But he says there is still a missing piece in the puzzle. “Scottish Government are very supportive of this, it’s on their radar, and that of the UK Government.
”We’re doing a lot of lobbying and we’re getting there and we believe we’re not that far away, but we need the UK Government to make a policy change now. It’s not a difficult policy change, all we need is for them to put a floor price for long-duration storage.”
He hopes the government will bring in a measure that is technology agnostic, that would cover both hydro pumped storage and other options, such as green hydrogen.
“Back in the day there was always talk of a race on between technologies, which technology would win the race. My belief is that you just can’t have that these days with where we are with climate change – you don’t have that luxury of choosing.
“All we need is a floor price that will get the investors all on board - it’s the investors that’ll take the risk.
“The government has done due diligence on this, they know that pump storage will not hit that floor price - it will be way above that - but that will get investors to take that jump, it doesn’t need to be government-funded.”
He cites a research report, Strategy for Long-Term Energy Storage in the UK conducted by engineering group Jacobs, that was released in August last year. “It showed that pumped hydro storage is the cheapest form of energy storage,” he says.
“If you’re looking at short-term storage, lithium batteries are the way to go – that’s up to four hours. If you’re talking anything above eight to 12 hours of storage, pump storage is three times cheaper than lithium battery. So that in itself is a reason to do it, because it’s going to save the consumer money.
Wilson continues: “We’re doing two bad things at the moment: we’re stopping the turbines when you could be turning them and making energy. At the moment you’re switching them off, you’re losing that energy.
“But the consumer is also having to pay the wind operator for switching them off, so it’s like a double whammy.
“Whereas with pump storage on the system, they can continue to run, you can bring more renewables onto the system, and you’re not wasting that energy, and you’re not wasting the consumer’s money.”
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