SCOTTISH Power plans to more than double the size of a hydro-electric power station built inside a mountain to help store renewable energy.
The firm said a feasibility study shows Cruachan hydro power station in Argyll can be expanded - increasing its current generating capacity from 440MW by 400-600MW.
But costs of up to £400 million will halt the development unless Scottish Power can secure a guaranteed floor price for its use from the Government, in return for a cap on profits.
The firm said more energy storage capacity will be needed across the UK as renewable energy available to the national grid increases, and the study shows the major expansion would create around 800 construction jobs.
The Cruachan power station sits inside Ben Cruachan and pumps water 400 metres uphill at night from Loch Awe to a dam at the top of the mountain when energy generated by wind farms is cheap - acting as a battery and storing the energy - letting the water flow downhill in daytime to generate electricity when demand is high and power expensive.
Hugh Finlay, ScottishPower’s generation director, said: “A new generation of pumped storage hydro would be a major asset for electricity systems worldwide as more renewable electricity continues to come online.
“As well as being able to further support peak demand, expanded pumped storage would also be able to effectively store greater levels of electricity at times when renewable energy output is high but demand is low.
“Pumped storage hydro is the most cost-effective and well-developed large-scale electricity storage technology in existence. We will now take forward our Cruachan findings with Government and regulators.”
Environmental charity WWF welcomed the expansion plans.
WWF Scotland director Lang Banks said: “Along with efforts to reduce electricity demand and strengthen interconnectors, increasing our hydro-pumped storage capacity would go a long way to helping deliver a fossil-fuel free power system.
“That is why the UK and Scottish governments need to work with industry to incentivise investment in pumped storage.”