CONCERNS have been raised over differences in information provided to the Scottish Government and the UK energy regulator regarding a planned pumped-storage hydro project.
The National understands that developer Statera has submitted two distinct plans for the same project, with concerns being raised that this could cause confusion or lead to future issues if funding support has been granted for a different project than has been scrutinised by planners.
The Scottish Government's Energy Consents Unit (ECU) is currently considering a planning application for a 600MW/9gWh facility on Loch Kemp, whereas Ofgem is considering a larger 660MW/14.7gWh proposal.
While the ECU manages what projects can be built, Ofgem has a key role in directing funds to energy projects, in this case through the Long Duration Electricity Storage (LDES) cap-and-floor scheme.
This guarantees a minimum revenue "floor" where firms are compensated through consumer energy bills if market returns are low, while a revenue "cap" returns excess profits to consumers through lower charges.
The regulator has published a "minded-to" decision in favour of accepting the 660MW project into the scheme.
This is a preliminary decision similar to how local authorities offer a recommendation on planning applications before they are ruled on by the planning committee. A public consultation was open until Friday, August 14, with a final decision yet to be announced.
The ECU is yet to rule on the planning application for the 600MW project.
Ldes projects are gaining momentum in the UK as a way to store large quantities of excess energy to be turned into electricity when traditional renewable sources – wind and solar – are producing lower-than-average returns.
They are able to generate electricity after storing energy in various forms – such as gravity, which is used for pumped-storage hydro sites – allowing for a longer storage time than normal battery sites.
Pump-storage hydro systems use the water in two reservoirs at different heights. When electricity is abundant and cheap, surplus power is used to pump water uphill to the higher reservoir. When demand rises or supply falls, this water is allowed to flow down through a set of turbines to generate electricity.
Scotland's Highland lochs form natural reservoirs for this process to be implemented. The Statera proposal would see the nearby Loch Ness used as the lower portion of the process while Loch Kemp can be used, following some additional engineering and landscaping work, as the higher storage area.
However, there are concerns that the larger (660MW) project could constrain the potential generation from other Loch Ness projects.
There are currently two other projects being planned using water from the loch, and with pumped-storage hydro infrastructure having the potential lifespan of more than 100 years, if one of Scotland's best-placed natural basins is not used to its full potential it could have major ramifications for the efficiency of the country's renewable energy network.
The three plans – two of which are currently under ECU consideration and one which has been consented to – would provide a total capacity of around 46gWh.
However, the single Statera proposal being looked at by Ofgem would use around 60% of the working water volume – the amount of water in a reservoir that is to be pumped out to generate electricity – currently proposed for use across all three projects.
This could curtail the development of other sites while generating a smaller marginal return – around 15gWh, just over 30% of the total expected from the three projects – than possible through the development of other projects using the water.
These figures have been calculated by a firm working on energy policy by extrapolating the existing calculation that has been used for the smaller 600MW project application using the size of the site submitted to Ofgem.
There is no detailed, publicly accessible set of plans or environmental impact assessments for the application sent to Ofgem, meaning there is less scope for scrutiny than the planning application lodged with the ECU for the 600MW version of the proposal.
Energy policy experts familiar with the site have therefore raised concerns that while the Scottish Government retains the final decision on planning, the project currently being proposed for consumer-backed funding does not align in capacity or impact with what ministers are ruling on.
When asked if Statera has informed the Scottish Government of the discrepancy between the figures given to the ECU and those given to Ofgem, an energy department spokesperson said it would "be inappropriate" to comment on a live application.
"All applications are subject to consultation and are considered on a case-by-case basis," they added.
"Any environmental impacts, including cumulative impacts, are assessed and carefully considered before a determination is made.”
A Statera spokesperson said that as this is a live planning process the exact specifications of the site are not fixed and relevant authorities will be made aware of any changes.
They said: "We continue to engage openly, transparently and constructively with both the Scottish Government and Ofgem, and with all relevant authorities, providing information as required to support their assessments.
"As with any major infrastructure project, designs may be optimised during project development, but any scheme would remain subject to the relevant planning and consenting requirements.
"At a time when Scotland is seeking to maximise the value of its abundant renewable energy resources, Loch Kemp Storage offers significant economic, energy security and environmental benefits.
"Ofgem's assessment as part of the LDES cap and floor process ranked Loch Kemp Storage as first in its economic assessment, reflecting the substantial value it could deliver for consumers and the wider electricity system."
Ofgem declined to comment when approached by The National. It is understood that the regulator will make a final decision on LDES funding in the autumn of 2026.
