The Scottish Government has given the green light for the construction and operation of a pumped storage hydro plant.
The 400MW plant will be located in Dumfries and Galloway at a site which is currently operated as a surface coal mine.
Pumped storage hydro electricity stations have the capacity to store large quantities of energy, providing important flexibility in electricity supply when there is a greater proportion of power from renewables.
Around 327 jobs are expected to be created during the construction period.
Scottish Cabinet Secretary for Economy, Jobs and Fair Work Keith Brown said: “Renewable energy sources generated more than 56% of gross electricity consumption in Scotland in 2015, helping support our world-leading ambitions to become a low carbon economy.
“The Scottish Government believes there is a huge opportunity around pumped storage hydro. This tried and tested technology can support peak demand and effectively store greater levels of electricity at times when renewable energy output is high but demand is low.”