Long Duration Electricity Storage Systems

Douglas Lumsden Excerpts

Tuesday 20th October 2026 Westminster Hall

[Mr MacDonald]

Until I received the hon. Lady’s email yesterday, I had never heard of sand batteries; sand is not one of the big features of my constituency. Nevertheless, I agree that we should consider all sorts of technologies. The bottom line is that Britain will not transition to electricity when it costs three times as much as carbon fuel imported gas does.

[Douglas Lumsden (Aberdeen South) (Con)]

The hon. Gentleman states that the electricity price is considerably higher than the gas price. He made the argument that gas is setting the price for electricity, but can he explain why the price of gas was so low compared to the price of electricity?

[Mr MacDonald]

I will briefly attempt to do so, but there is a much more eloquent gentleman here today—the Minister for Energy, the hon. Member for Rutherglen (Michael Shanks)—who would do better. [Laughter.] As I understand it, the tariffs and the distribution charges go on the electricity—the home-produced renewable electricity—and not on the carbon fuel imported gas, which in my opinion is the wrong way round. However, I am sure that the Minister will enlighten us and provide a bit more detail.

Another problem is constraint payments—when we are paying to stop renewable electricity being produced. When the electricity network cannot carry power from where it is being produced to where it is needed, the systems operator has to intervene. That means paying wind farms to reduce their output. The National Audit Office says that constraint costs reached £1.9 billion over the last year, with an expectation that the figure could be as high as £8 billion by 2030. That is a shocking waste of taxpayers’ money and hopefully pump storage will reduce it.

What is the opportunity for Scotland? Pump storage sites are very expensive to build and, historically, it has been difficult for developers to secure private finance, because future electricity market revenues are uncertain. The UK Government have introduced the cap and floor scheme to unlock investment in this type of infrastructure. The floor provides a minimum level of revenue certainty and, if a project’s market revenues fall below that agreed floor, support is provided to cover the gap, funded through consumer bills. The cap limits the excess revenue. If a project earns above the agreed level, excess returns are returned to the consumer through lower network charges.

There is an opportunity for Scotland to develop a serious industry around pump storage. The benefits are not just the electricity stored at the end of construction. There is the civil engineer, the tunnel and the electrical equipment required—billions of pounds’ worth. Can we ensure that a significant amount of that supply chain work will remain in Scotland or even in Britain? Are we educating our young with the skills they need to be employed in these multi-billion pound infrastructures? I really do not believe we are.

I want to move on to community benefits. Do the communities impacted by wind farms and pump storage sites welcome them? They absolutely do not. I have attended hostile meetings of the convention of community councils with hundreds of attendees, and the Department for Energy Security and Net Zero and Scottish Government Ministers have declined to attend. There is very much a feeling in the highlands that this is being done to us. If locals had jobs at these projects, if legacy housing were built rather than temporary modular constructions, and if the communities got significant community benefit or, even better, were shareholders, I guarantee that there would be much better support.

When we ask communities to host major infrastructure, it should be beneficial to them. That is particularly important for the highlands, where our fuel costs are prohibitive, major developments can be very visible, the costs of providing public sector services are high, and we have a serious problem with the availability of housing and opportunities for young people to stop them emigrating to the cities. I welcome the Scottish Government’s recent proposal to bring pump storage hydro within its updated community benefit guidance, but I suspect that it will result in an underwhelming consequence.

Glen Earrach is a model case study. It has not yet received Ofgem’s provisional approval, but it is an example of the scale of opportunity we have. It has an expected operating life of approximately 125 years. It has 34 GWh of storage capacity and around 1.8 GW of generating capacity, and its hydraulic head of 500 metres makes good use of the geography of the site to store large amounts of electricity efficiently. The project is committed to putting 5% of its annual gross margin into a community wealth fund. The estimate is that the fund could receive £20 million a year. Compared with the highlands only getting £7 million, that is significant. The Highland Council said that the fund could be worth around £3 billion in today’s money over the 125-year operating period. Glen Earrach has bravely volunteered a model where its host community will share in its success. I strongly urge the Government to recognise it as a model that can be adopted by other developments.