SCOTTISH & Southern Energy is considering building new hydro-electricity plants in Scotland to complement its growing wind-farm business

The company, which is developing the 100Mw station at Glendoe near Loch Ness, yesterday confirmed it was “pursuing” two other, smaller hydro projects in Scotland.

Chief executive Ian Marchant said that hydro-electricity stations, complemented wind farms because they provided a steady electricity supply and were “more valuable as an asset” than a few years ago”.

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The Glendoe project, which is ahead of schedule, has been widely viewed as the last major British hydro-electricity project.

Marchant said part of the reason the reason the group was examining new hydro capacity was the success of the project.

“It is because of a positive experience at Glendoe, but also the fact that renewable energy targets have been increased from three years ago, and so you would expect the boundary between what is acceptable and what is not has moved in favour of renewables.”

Marchant said SSE was investigating whether planning restrictions may have softened for hydro as the Scottish Government encouraged renewable investment.

SSE would not reveal the location of the proposed new projects, other than to say they were “somewhere in the Highlands”.

One of the projects would be the reconstruction of an existing station to improve efficiency, but another new project would create around 10Mw, Marchant said.

SSE has asked its projects team to investigate potential hydro projects in Ireland and Portugal.

Yesterday’s announcement also outlined plans for the first investment outside Britain, with £500 million earmarked for renewable energy projects in continental Europe and China by 2013. This is on top of £2.5 billion the company will spend in the UK and Ireland during the same period.