Statkraft has agreed to buy Red John, a 450 MW pumped storage hydro scheme near Inverness, from the developer that spent sixteen years getting it permitted. The price was not disclosed. Neither was the thing Statkraft said it was waiting for.
Key takeaways
- Statkraft announced on 15 December 2023 that it had agreed to acquire the Red John pumped storage hydro scheme in Scotland from Intelligent Land Investments Group (ILI); the deal value was not disclosed.
- Red John pumped storage hydro has about 450 MW of generating capacity and about 2,800 MWh of storage, which equals roughly 6.2 hours of output at full power.
- The Red John project, located about 14 km southwest of Inverness, is expected to cost about $777 million to build, roughly $1.73 million per MW of generating capacity.
- ILI received consent for Red John under section 36 of the Electricity Act 1989 from the Scottish Ministers in June 2021, after a conception stage from 2007 to 2010 and formal development from 2011 to 2018.
- Enerdatics records four pumped storage hydro M&A transactions in Europe between January 2022 and December 2024, and none of the four carries a disclosed value.
What is Statkraft actually buying?
A consented storage asset that is not yet built. Pumped storage hydro moves water between two reservoirs at different heights. When power is cheap or plentiful, it pumps water uphill. When power is needed, it releases the water through turbines. The upper reservoir works like a very large battery.
The key number is duration. Red John's storage capacity is about six times its power rating, so it can run at full output for roughly six hours. That is several times longer than the shorter-duration batteries that dominate grid storage build-out, and it changes the job: it can cover an evening peak and much of a still, dark night, not just a short spike in demand.
Leap classifies the scheme as late-stage and under development. The hard regulatory work is done. The construction risk, and most of the cost, is still ahead.
Why did Red John take sixteen years to reach a buyer?
Because pumped storage is slow at every stage. Leap's record traces the timeline: an early conception phase from 2007 to 2010, formal development from 2011 to 2018, and planning and permitting since 2019. The section 36 consent, the approval Scotland requires for large generating stations, arrived in June 2021. The sale came two and a half years after that.
That timeline explains the seller. ILI is a development company with a 4.7 GW portfolio of pumped storage hydro and battery storage projects. Its business is taking schemes through consent, not building and operating a $777 million civil engineering project. Selling at the late-stage point is the natural exit for a developer of that kind.
It also explains the buyer. Statkraft is a large utility with an existing base in Scotland: it operates wind farms there, has its headquarters in Glasgow and runs the Keith Greener Grid Park in Moray. Leap's record says the acquisition aligns with Statkraft's commitment to Scotland's renewable energy targets and to UK energy security.
What support is Statkraft waiting for?
A revenue framework for long-duration storage, which by Statkraft's own account was still to come when the deal was signed. Leap's record notes that Statkraft is looking forward to the UK Government providing support mechanisms for the project.
That phrasing matters. A $777 million asset with a construction period measured in years is hard to finance on merchant power spreads alone. Investors need some form of long-term revenue visibility before they commit. Statkraft bought the consented scheme first and put the question of how it gets paid to government second.
The cost figure shows why. At about $1.73 million per MW of generating capacity, or about $0.28 million per MWh of storage, Red John is capital-heavy on either measure. The long asset life of pumped hydro helps spread that cost, but only if the revenues are there to recover it.
What has changed at Red John since the sale?
Its name, and possibly its size. Leap's project record now lists the scheme as Loch na Cathrach, noting it was previously known as Red John, with Statkraft holding a 100 percent stake since December 2023. The same record gives a capacity of 500 MW, above the 450 MW stated at the time of the deal. Which figure ends up built will matter for the cost per MW.
The project record adds engineering detail too: a penstock, the pipe that carries water between the reservoirs, about 2,650 metres long and 6 to 8 metres in diameter. It lists an expected operational date of 30 June 2030, which would put commercial operation some 23 years after the scheme was first conceived.
Enerdatics records four pumped storage hydro transactions in Europe between January 2022 and December 2024, and not one carries a disclosed value. Vattenfall bought a 400 MW pumped hydro project in Germany from WSK Puls in December 2022. Statkraft agreed to buy Red John in December 2023. SSE and Gilkes Energy formed a joint venture to develop the roughly 1.8 GW Fearna scheme in Scotland in July 2024. CDPQ agreed to buy a 25 percent stake in First Hydro Company, which owns 2,088 MW of operating pumped storage in the UK, from Brookfield in September 2024. Three of the four involve British assets. None tells the market what the asset was worth.
What does the deal signal for UK long-duration storage?
It shows large utilities positioning ahead of policy. Statkraft took on Red John before the rules for paying long-duration storage were settled, betting that consented sites will be scarce once a framework arrives. Pumped storage needs specific geography, with water and height in the right places, and a site with consent in hand cannot be replicated quickly.
It also shows how little price discovery there is. With no disclosed value on any of the four European pumped storage deals Enerdatics records since 2022, buyers and sellers are negotiating without public comparables. Each new transaction is priced on its own engineering and its own assumed revenue model.
The next signal to watch is the support mechanism itself. Once it is defined, schemes like Red John move from consented options to bankable projects, and the value of a late-stage pumped storage site should become far easier to read.
Frequently asked questions
Who did Statkraft buy Red John from? Intelligent Land Investments Group (ILI), a clean energy developer with a 4.7 GW portfolio of pumped storage hydro and battery storage projects. TLT LLP acted as ILI's legal advisor.
How big is the Red John pumped storage scheme? About 450 MW of generating capacity and about 2,800 MWh of storage, roughly 6.2 hours at full output. It is expected to cost about $777 million to build.
How much did Statkraft pay for Red John? The deal value was not disclosed. Enerdatics records four pumped storage hydro transactions in Europe since January 2022, and none carries a disclosed value.
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