Construction is underway at Innogy’s 2MW Glen Noe hydro scheme located within the Glen Noe Estate in the west of Scotland.
Work started in May with the building of access tracks heading up towards the intakes.
The run-of-river scheme was consented by Argyll and Bute Council in September 2016.
It will comprise three intakes, approximately 2.8km of buried pipeline and a powerhouse with tailrace.
The German energy company said when completed, which is anticipated to be at the end of 2020, the scheme will have the capacity to provide enough renewable electricity to power on average up to 1436 homes a year.
Innogy hydro UK development and projects manager Duncan Morrison said: “We are pleased that the construction of Glen Noe is underway and I’m delighted to announce that Innogy will be making a community fund of £2,000 per year, available for up to 40 years.
“Hydro has proved its longevity in the renewables business and so the construction of a further hydro scheme will play a crucial role in enabling Scotland to fulfil and maintain its clean energy future ambition to reach net zero carbon by 2045.”