Written evidence submitted by Glen Earrach Energy (NRG0023)

Scottish Affairs Committee - GB Energy and the net zero transition

Glen Earrach Energy - Response

About Glen Earrach Energy:

Glen Earrach Energy is a large scale, high efficiency, long duration Pumped Storage Hydro (LDS Long PSH) project (30GWh, up to 2GW, 15 to 30 hours) uniquely located at Balmacaan Estate, Scotland, in close proximity to existing wind energy generation sites. It is set to be the largest and most water-efficient pumped storage scheme in the UK.

The project takes full advantage of the site’s unique geography and topography to maximise energy storage with minimal environmental impact while ensuring that water use is optimised. The site was identified over a decade ago as one of the UK’s best locations for pumped storage. With recent progress in support mechanisms and the urgent need for long-duration energy storage, Glen Earrach Energy (GEE) was established to push the project forward, aiming to begin construction in 2026.

This project alone is estimated to reduce the UK electricity grid’s post-2030 carbon footprint by over 10%, and lower grid running costs by roughly £3bn (with 30GWh) in the first twenty years of operation.

Consultation Response:

4. What actions should the UK and Scottish Governments take to ensure the necessary generation and transmission infrastructure to support the development of Scotland’s renewables sector?

The Department for Energy Security and Net Zero’s recently published Clean Power 2030 Action Plan recognises the need for 4-6GW of long-duration energy storage capacity (LDES) by 2030 to alleviate grid capacity constraints, reduce the UK’s reliance on gas fired power stations and reduce amounts paid in curtailment payments. Expanding the capacity of pumped storage hydro will play a vitally important role in this, with Glen Earrach alone able to fulfil 2GW of capacity. As an established, proven technology, PSH offers unmatched reliability for large-scale grid stability and renewable integration.

The anticipated high proportion of wind power connected to the electricity grid will require a significant amount of large-scale long duration energy storage to ensure grid stability and security of supply, particularly in instances in which the wind is not blowing. Projects such as GEE can lead to reduced energy costs by stabilising the electricity grid and mitigating the need for costly and carbon-intensive flexible generation. They can also ensure a more reliable energy supply, lower production and distribution costs, and lead to decreased energy bills for consumers.

In order to achieve this objective and enabling investment in long-duration energy storage, an investment framework will be vital for delivering projects like ours and allowing the UK to unlock its potential for an efficient and sustainable energy grid. Reducing uncertainty in revenue projections will help unlock critical investment and development in this sector.

A Cap and Floor mechanism for LDES will be a critical step in providing revenue certainty, enabling the investment needed to bring forward LDES projects and reinforce Britain’s future energy security and sustainability. Pumped Storage Hydro projects can be costly, but this reliable renewable technology can provide a long-lasting, balanced, and responsive solution for renewable energy storage and supply. Without the necessary support of a Cap & Floor, it could prove difficult to reduce risk enough to encourage the investment required for these crucial projects, hampering Britain’s wider net-zero strategy. We are pleased to see DESNZ progress with this at pace.

Development of a Cap and Floor mechanism for LDES is currently underway, with Ofgem appointed to undertake delivery of the scheme. Ofgem are currently undertaking engagement with developers to progress the scheme and establish criteria for eligibility.

We believe that projects should be delivered in a way that provides the greatest net benefit to the system, local community and the environment. With this in mind, we suggest that emphasis should be placed on delivering and fast-tracking projects that will have the largest impact on the energy grid and net-zero targets, rather than those that have priority through the planning system. It will be important to move swiftly to ensure their delivery before 2035. Being clear about targets, or at least being clear early on about which projects will be included in the Cap & Floor, will allow resources to be devoted to their rapid development and deployment.

Delivering increased LDES capacity provides the ability to store excess power from renewables and ensure energy security as we transition to net zero, and allows existing and new renewable projects to deliver improved benefits to consumers by reducing constraint payments, which in turn will reduce consumer bills. Given that a high percentage of investment in renewables will be retained within the UK, this will certainly contribute to economic growth, creating extensive job opportunities as well as reinforcing domestic energy security.

6. How should GB Energy work with the Scottish Government and other Scottish bodies to identify appropriate funding and other mechanisms?

GB Energy should work closely with the Scottish Government and DESNZ to ensure that funding mechanisms, grid planning, and consenting processes are aligned to prioritise high-impact projects like Glen Earrach Energy. The Cap and Floor mechanism, currently being developed by DESNZ at a UK level, is critical to unlocking investment in long-duration energy storage (LDES). For the mechanism to succeed, collaboration between the Scottish Government, DESNZ, and NESO is essential to ensure that priority projects are identified and supported throughout their development.

The Scottish Government must engage with DESNZ to align planning processes with the Cap and Floor framework, ensuring that projects with the greatest system, community, and environmental benefits can progress efficiently. This requires a strategic approach to avoid delays caused by misalignment between funding, grid connections, and the planning system. By working in partnership with NESO, the Scottish Government can help ensure that grid infrastructure is prioritised for projects like Glen Earrach Energy, which deliver the highest value to the system and consumers.

Additionally, the Scottish Government should actively support the planning process by addressing resourcing challenges in local authorities and statutory consultees, ensuring they can handle large-scale renewable energy projects effectively.

A coordinated effort across DESNZ, NESO, and the Scottish Government is essential to achieve net-zero targets and deliver the Clean Power 2030 mission. By aligning funding, grid connection priorities, and planning processes, the UK and Scottish Governments can ensure that transformational, large scale and efficient projects are delivered on time, with maximum benefits to the energy grid, local communities, and the environment.

7. What does a just transition look like for workers and communities across Scotland’s highland and island communities, and what role might community energy and community benefits play in this?

A just transition in Scotland’s Highlands and islands must ensure that communities hosting renewable energy infrastructure receive substantial and long-term benefits.

Since commencement of the project, Glen Earrach Energy has engaged a wide range of stakeholders, including local residents, community organisations, councils, and government authorities to ensure the project delivers long-term benefits for the community.

Glen Earrach Energy’s project alone will generate power equivalent to all onshore wind farms currently operating in The Highland Council area – roughly 800 turbines. It is our desire to design a community benefit package that is both thoughtful and community driven.

Applying the Highland Council's social value charter, this project could deliver £3 billion over its initial 120-year lifetime (which can be extended) – equivalent to £25 million a year to the communities within the remit of the council charter.

By delivering a significant community benefit scheme, Glen Earrach hopes to deliver tangible benefits to the local community, on top of other economic, social and system benefits that the project will deliver, in order to compensate communities that host energy infrastructure.

Pumped storage hydro schemes make use of local water sources, meaning it must therefore be managed very carefully. Schemes with higher hydraulic head heights (the vertical distance between the upper and lower reservoir) generate greater water pressure, which allows the turbines to produce more energy for the same volume of water.

For instance, a project with a hydraulic head of 500 metres can generate the electricity needed to power 5000 homes with a single cubic metre of water per second flowing through the turbines. In contrast, a project with a hydraulic head of 150 metres would only power 1500 homes with that same cubic metre of water flowing through the turbines each second. The 500 metre project can therefore produce over three times more power for the same amount of water used, and by the same principle it can store over three times more energy.

As the UK’s largest and most-water efficient pumped storage hydro scheme, Glen Earrach’s high hydraulic head means it will be able to store more energy and generate more power than all other projects on Loch Ness combined, whilst also using less water to do this. The greater the amount of energy stored and generated, the greater the economic benefits delivered to local communities can be.

8. Can the UK learn lessons from international examples about how to effectively manage Scotland’s energy sector transition?

A key factor within policy objectives should be prioritising projects that will have the most significant impact on aims such as achieving net zero and ensuring Britain’s energy security rather than those with priority through the planning system.

One critical takeaway was the importance of hydraulic head height in determining the efficiency and impact of pumped storage hydropower projects. Hydraulic head—the vertical distance between the upper and lower reservoirs—directly correlates to a project’s efficiency, as higher head heights allow more energy to be generated and stored per unit of water.

Projects with higher hydraulic heads use water more efficiently, generating greater amounts of energy for the same volume of water. For example, a project with a 500-metre hydraulic head can generate significantly more power than one with a lower head height, while also minimising the environmental impact of water abstraction. Prioritising such projects ensures the best use of Scotland’s natural water resources, maximising the energy output and storage capacity relative to their environmental footprint.

By adopting a merit-based approach to project prioritisation—focusing on factors like hydraulic head height, scale, efficiency, and environmental benefits—the government can ensure that the most impactful projects are fast-tracked. This approach delivers the greatest economic, social, and environmental benefits, while avoiding inefficiencies inherent in a system that prioritises projects solely by their place in the planning queue.

January 2025