Interview: We talk to ILI Group about unlocking storage in Loch Ness

BY RICHARD HEAP:

Something’s moving in Loch Ness.

It’s very long with only 10% visible to the naked eye. It’s sparked fierce debate and global attention. And it doesn’t physically exist. Well, not yet anyway.

No, we don’t mean Nessie.

This year, Scottish developer ILI Group expects to conclude permitting for the Red John pumped storage hydro project at the famous loch. It is set to have headline capacity of 450MW and energy storage capacity of 2,900MWh.

Once permitted, ILI plans with to partner a multinational firm to take Red John into construction, where it estimates £600m will need to be invested.

Mark Wilson, chief executive at ILI Group, says he has spoken to “at least 15 to 20 global companies” about backing Red John over the last two years.

We caught up with Wilson to discuss Red John and ILI’s 1.6GW portfolio of UK pumped storage projects; the role of pumped storage in a ‘green recovery’; and the 500MW of battery projects that ILI plans to get built by 2022.

Red monster

Loch Ness’s global reputation means that Red John has attracted more global attention during permitting than we would usually expect. Highland Council has twice rejected the plan, and it is now in a public inquiry. This ‘monster’ project is a headline-writer’s dream.

Despite this, Wilson is adamant it won’t damage the surrounding area and would instead bring economic activity.

“You’ve got to remember that 90% of the project is underground,” he says. ILI hopes to conclude the inquiry this year and start building in mid-2021.

The development has taken five years to get to this stage, and would be ILI’s biggest storage project to date. But the business didn’t start out in energy.

Formed in 2004, Intelligent Land Investments started as a housing developer and then used this experience to develop sites for small-scale single-turbine wind projects of 500kW each. By 2016, it had consents for 96 wind projects.

However, ILI also started moving away from wind and towards storage in 2013.

“We never planned to be in wind long term and, while we were on that journey, it became very clear that energy storage was going to become vital,” says Wilson, highlighting challenges with intermittency. ILI finally exited wind in 2016, and set up ‘ILI Group Plc’ in 2017 to focus on Scottish storage schemes.

ILI picked Loch Ness and two other sites after an extensive process: “We’ve looked at 150 sites throughout Scotland [since 2015], and whittled those down to what we believe are the three best [pumped hydro] sites in Scotland.”

It is also planning an up-to-1GW pumped storage scheme at Loch Ericht and an up-to-800MW scheme in Argyll & Bute. Wilson says these are due to ready to build in 2022, and ILI plans to bring in joint venture partners there too.

Pumped hydro benefits

Wilson says there are two main benefits of pumped hydro.

First, because it’s the cheapest way to do long-term energy storage at scale; and second, because infrastructure spending could help to stimulate parts of the economy suffering in the recession.

He adds pumped storage is often overlooked: “Everybody wants something sexy, new, bright, shiny… but for long-term storage, your options are limited,” he says. “Pumped storage works. It lasts for 100 years. It doesn’t degrade. It’s the cheapest option so, to not look at it seriously, you’re missing out.”

In the UK there are currently over 5GW of pumped storage hydro projects that could be built by 2030, by Buccleuch Estates, Drax and SSE – as well as ILI. These will support new renewables to come onto the grid too.

ILI also works on short-duration battery projects.

It currently has 500MW consented in Scotland, with typical project sizes of 30MW-50MW. It plans to develop some in joint ventures, and sell others to help fund its pumped storage projects.

For now its main goal is to see Red John get the green light.

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