SCOTLAND'S FIRST Minister Alex Salmond has hailed pumped storage hydro as the 'natural complement' to Scotland's renewables revolution, and argued the case for transferring energy policy powers to Holyrood.

The First Minister's remarks came during a tour of one of the world's most iconic power stations, ScottishPower's hydro pumped storage station at Cruachan, on Loch Awe, where he received an update on the potential to more than double the station's capacity.

His visit also coincided with the publication of a new report on securing Scotland's power supplies by the UK's former chief energy regulator, Alistair Buchanan, in which he highlights the UK's emerging energy gap and the shift in UK energy policy needed to secure the construction of new clean thermal plant and flexible hydro power in Scotland.

Pumped storage is highlighted in particular as the ideal technology to sit alongside the growing power of renewables, storing electricity as a giant battery and helping to manage demand.

The report's key messages include the vital role played by Scottish renewable, thermal and hydro generation in providing secure electricity supplies across Great Britain and in managing the electricity system - and the need for adequate incentives for new investment from UK energy policy, with Scottish issues getting greater consideration in GB energy policy making.

The First Minister said: "Scotland is a resource rich country, and our energy capabilities and needs are different to those of the UK as a whole. It is imperative that we have the power and responsibility to decide how best we might develop that potential and meet those needs.

"Scotland was one of the first countries to harness power from its waters and the world's first to develop high head reversible pumped storage. We have the capacity to do much more with our wonderful hydro resource, to generate clean power and store the vast power of renewables."

Referring to the report, he added: "The report makes it clear that investments like this, and in new capacity right across Scotland, are not best served by the current system.

"A transfer of energy policy powers, which we have proposed to the Smith Commission, is the best way to ensure that Scotland's energy security and renewable ambitions remain protected and on track.

"The UK Government has shown willing to provide a generous bespoke contract to support expensive new nuclear power at Hinkley Point C, including massive subsidies up to £35bn and a loan guarantee of £10bn.

"We believe pumped storage - given its huge advantages for our electricity system - should be shown an equivalent level of commitment given that the potential costs are much less than new-build nuclear."