Achi news desk-
Drax is about to start work on a £500 million project to build a second pumping station at Ben Cruachan.
This would double the factory’s capacity but depends on Drax getting the right support from UK ministers.
Ian Kinnaird, Director of Scottish Assets & Generation Engineering at Drax, says that with the right support from the Government, the new plant could be operational as early as 2030.
During the construction phase, the expansion project is expected to support over 150 jobs in Argyll and Bute and over 500 jobs across the wider Scottish supply chain. Across the UK, the total number of jobs supported is over 1,000.
The Scottish Government has already granted development consent so what remains to date is an agreement on the formula that would reimburse Drax for carrying out the work and allow it to recover its costs.
“What we are in favor of as a Long Energy Storage industry is a ‘cap and floor’ scheme, like the one used to fund the development of the electrical interconnectors between Europe and the UK,” said Kinnaird.
It was clear when those projects were being considered that the private companies involved needed to be sure of a minimum revenue from the assets they were building to cover the cost of equity. That created the ‘down’ part of the deal.
At the same time, with power prices sometimes fluctuating wildly throughout the day, the government needed to be fair to consumers, so the return to the companies was capped at a certain level above the floor price. The balance was returned to users (so ‘cap and floor’).
According to Kinnaird, discussions are progressing well with ministers, but the final decisions are still to be made. Part of the problem in devising a suitable cap and floor formula for Cruachan is that the problem is much more complex than with the electric interconnects.
“When you’ve laid a submarine cable, the job is pretty much done. The cable continues to function and electrons go back and forth and do not create wear and tear on the cable. A pumping station is a very different beast. There you get wear, and the more you use it, the more wear you get,” he notes.
The great thing about pumping storage hydro as a ‘battery’ for containing electrical power that would otherwise be wasted, is that it can be turned on at a moment’s notice, almost literally. This ability to respond quickly to the changing demands of the national grid is what gives it an advantage over traditional thermal power stations such as coal plants.
These plants can take many hours to be ready to produce power, leaving them unable to meet short-term increases in electricity demand.
However, pumped storage hydro plants can produce electricity in a matter of seconds. “The conundrum with electricity is that it’s use it or lose it,” notes Kinnaird. “When the wind blows out at sea in the early hours and all those floating wind turbines that are going to be built are generating power, where is it going to go if the demand isn’t there ?”
It makes sense to use that electricity to pump the water from Cruchan’s lower reservoir to its upper reservoir. That water is then released, as needed to generate electricity. With the existing power station, Drax can supply power to the National Grid for up to 16 hours. This is much more consistent power than grid storage batteries can provide.
“The UK government has promised to introduce a new policy framework by the end of 2024 with the aim of unlocking private investment in new pumped storage hydropower plants. We urgently need the UK and Scottish governments to honor these commitments,” said Kinnaird.
To date, although there are numerous examples of successful pumped storage facilities around the world, 95 percent of these have been built with state support rather than private enterprise.
“No new pumped storage facilities have been built in the UK for over 40 years because we haven’t had the right policies or investment frameworks from Government to support new private projects. These are projects with high upfront capital costs and a lot of uncertainty about future revenue. This is what makes a cap and floor plan key,” argues Kinnaird.
With the right government regulatory framework in place, Drax is ready to invest the £500 million required for a new pumping station at Cruachan. The group has just given the green light for an £80 million upgrade to the existing installation.
“It is important to emphasize that we see a very bright future for hydropower in Scotland. All that awaits is the right policy framework,” he concludes. n
www.drax.com
