In an average year, Sloy produces around 120GWh of electricity and, according to SSE, converting it to a pumped storage facility will allow it to produce an additional 100GWh to help meet peak demand.

The project is expected to require an investment of over £30m (US$48M).

SSE is also exploring whether other potential sites could be suitable for the development of pumped storage schemes: “Hydroelectric schemes which use stored water to generate electricity have an important part to play in meeting peak demand and also in complementing the growing, but variable, amount of output from wind farms,” said Ian Marchant, Chief Executive of SSE. “This means that developments like Sloy that increase storage and generation capability will play a bigger part in meeting energy needs as the development of renewable energy gathers pace.”

While announcing its plans for the new pumped storage scheme, SSE also said it had agreed to acquire Abernedd Power Company from BP to allow construction of a new gas-fired power station, and had submitted an application for consent to build a 540MW onshore wind farm on Shetland.