SSE has welcomed announcement by the UK Government confirming its decision to finalise and implement a cap and floor investment framework to support the deployment of long-duration electricity storage projects, such as pumped storage hydro.

The decision follows the completion of a consultation on a proposed cap and floor framework by the Government that commenced in January 2024. An appropriately designed cap and floor scheme will provide a revenue stabilisation mechanism aimed at unlocking significant private investment in long duration electricity storage projects in the UK, in the same way it has unleashed investment in electricity interconnectors.

SSE is progressing its flagship pumped storage hydro Coire Glas project in the Scottish Highlands which could deliver up to 30GWh of storage capacity if built, doubling the total electricity storage capacity in Great Britain today. When commissioned, it would become the UK's largest natural battery, providing vital back up for renewable power.

SSE Renewables hopes to make a final investment decision on the 1.3GW project pending successfully securing a cap and floor agreement in an appropriately designed scheme.


Robert Bryce, Director of Hydro, SSE Renewables, said: "The announcement on a cap and floor investment framework is a massive step forward in delivering more of the flexible homegrown energy the UK needs in our transition to net zero.

"SSE's Coire Glas has the potential to be at the forefront of delivering much needed large-scale long duration electricity storage – providing vital back up to an increasingly renewables-led system and bolstering energy security.

"The flagship project in the Scottish Highlands can shift the dial on pumped hydro storage – harnessing the power of wind and water to become Britain’s biggest natural battery, storing excess renewable energy at times of low demand and supporting a future clean electricity system with instant power.

"We now need to harness momentum from this decision and accelerate at pace with a clear timetable to implement the new framework so clean energy investors like SSE can take positive decisions to unlock investment in these nation building projects. SSE will continue to work closely with Government and Ofgem as the regulator and delivery body to support a speedy implementation so we can unlock investment in Coire Glas and other large scale storage projects to secure the benefits to UK consumers and society that they bring."

Delivery of the Coire Glas project is expected to be one of the biggest civil engineering projects in the Scottish Highlands since the 1943 Hydro Electric Development (Scotland) Act kickstarted the construction of major hydro-electric schemes across Scotland over 80 years ago. Main construction would be expected to last up to seven years, and at peak delivery the project would create up to 500 full time construction roles, delivering a massive economic boost to the Highlands and wider Scottish economy.

Pumped storage hydro is the world’s largest, most proven, and cost-effective long-duration electricity storage technology. Its deployment will help reduce the UK’s reliance on imported gas and provide vital energy balancing services to the grid, not just for instant response but also for longer periods, up to days at a time if needed, when renewable energy may not be available. As a result, pumped storage hydro is a critical enabling technology for the wider deployment of the renewable energy the UK needs.