UK power group Drax submits plans for 500 mln stg Scottish hydro project

An employee works inside the control room at Drax power station in Drax
An employee works inside the control room at Drax power station in Drax, northern England, February 16, 2011. REUTERS/Nigel Roddis

LONDON, May 17 (Reuters) - British power generator Drax (DRX.L) has applied to build a new 500 million pound ($613 million) underground pumped storage hydro power station at its existing Cruachan hydro plant in Scotland, the company said on Tuesday.

Pumped hydro plants work by pumping water uphill to an upper reservoir and then releasing it to enable to water to flow downhill through turbines to produce electricity when it is needed.

Developers of the technology say it can help to balance out a growing amount of renewable electricity on the power grid, using their surplus renewable power when demand is low to pump the water and storing it so it is ready to be released when demand high.

“When the wind isn’t blowing and the sun isn’t shining this is when you need your long duration energy storage to kick in and fill that gap,” Ian Kinnaird, Drax’s Scottish Assets Director, told Reuters in an interview.

He expects the planning approval will take around one year, with construction of the 600 megawatt plant beginning in 2024 and taking around six years to complete.

Kinnaird said the company would need market support from the government to enable it to go forward with the 500 million pound investment needed to build the project.

He said the company was seeking support like the cap and floor regime used to incentivise power interconnectors between countries which sets a minimum return developers can expect but also caps the amount of revenue they can make.

The British government’s Energy Strategy, published last month, said it was seeking to develop appropriate policy to enable investment in long-duration energy storage. read more

($1 = 0.8163 pounds)

Reporting By Susanna Twidale. Editing by Jane Merriman

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