ENERGY giant Drax has underlined the commercial value of the huge hydro power plant it operates in the Argyll hills as it works on plans for a dramatic increase in the scale of the facility.

The head of Drax’s generation business Mike Maudsley reiterated that the company sees enough potential in the Cruachan pumped storage hydro plant to be prepared to commit to an expansion programme that would involve years of work and massive bills.

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The plant features a turbine hall hollowed out from Ben Cruachan by Loch Awe in the 1960s.

Mr Maudsley said Drax would be prepared to create another turbine hall at Cruachan if the right incentives are provided.

“If we get financial support to build we would be ready to do so,” he said.

Drax wants the Government to help underpin the returns it would expect to make on the huge investment that would be required. This could take the form of payments based on the electricity produced or stored at Cruachan.

Work on the plant could create jobs in the construction sector.

Mr Maudsley said Cruachan could play an important part in supporting the official drive to achieve net zero by helping to make the most of renewable energy from windfarms and the like.

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The turbines at Cruachan are driven by water as it flows from a reservoir in the hills to Loch Awe below. Electricity produced by windfarms at times of low demand could be used to pump water back up to the reservoir.

Drax acquired Cruachan along with a portfolio containing other assets in Scotland from ScottishPower in a £700m deal in 2018.

The portfolio includes the Lanark and Galloway river-based hydro schemes and a plant at Daldowie near Glasgow that produces fuel pellets from sludge.

Drax said the Scottish operations in the portfolio performed well last year. They achieved underlying earnings of £73m in 2020 in total, against £71m in the preceding year.

The group increased profits to £412m, from £410m. The impact of the coronavirus crisis wiped £60m off profits.

Drax has scrapped plans to develop a big gas-fired power plant at the power station in Yorkshire from which it takes its name. The company will stop commercial coal-fired generation at the Drax plant in March. It produces electricity from biomass at the plant.

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In December Drax sold four gas-fired plants to oil trading heavyweight Vitol for up to £193m. It had acquired the plants with the ScottishPower portfolio.

Last week SSE raised the prospect it could develp a major pumped storage hydro plant in the Highlandswith the right support. A study commissioned by SSE found such schemes could cut the cost of operating the UK’s energy system by around £700 million a year.