Ignacio Galán, chairman of ScottishPower, has outlined the group's strategy for further multi-billion pound investments in renewables in the UK, with a strong focus on Scotland, in a lecture at the University of Strathclyde.

Mr Galan, chairman and chief executive of ScottishPower's owner Iberdrola, said new capacity in both pumped storage and gas-fired generation was essential to managing the UK's power system, given the variability of output from renewables such as wind and solar.

He said pumped storage was the most efficient way of storing energy, and added: "It is important to have a regulatory framework that ensures the economic viability of these facilities. If this was the case in the UK we could develop our plan to increase the capacity of ScottishPower's Cruachan pump storage plant, already the largest in Scotland."

Mr Galán acknowledged that currently investment costs for offshore wind were significantly higher than for onshore wind, but said: "I firmly believe that significant cost reductions will be achieved over the next five years."

He said a key issue would be larger turbines, noting that 8MW prototypes are currently under consideration, and that Iberdrola has major projects under development including ScottishPower's planned East Anglia One scheme in the North Sea, which could total up to 1200MW.

ScottishPower was currently collaborating with the University of Strathclyde to develop floating foundations for use in deeper waters, working alongside the Offshore Renewable Energy Research Centre, Mr Galán said.

At the policy level, Mr Galán said it was essential that governments across Europe, including the UK, put in place strong frameworks to encourage more investment in renewables, including "a strong market-based CO2 price signal".

Mr Galan urged engineering students to take up the challenges. "Scotland and Scottish engineers have a long history of leading the world in engineering innovation," he said. "With huge global investments to decarbonise the energy sector and modernise electricity grids, engineering graduates have a world of opportunities in front of them.....we are one of very few sectors offering lifelong career opportunities and employment."