Simec will upgrade the Kinlochleven hydro power plant in Scotland, following an amendment to renewables legislation by the Scottish government.
A change to the Scottish renewable obligation means the project can have capacity increased to up to 27.5MW and still remain accredited for the original 19.5MW.
Kinlochleven joined the Scottish RO in 2002 and was restricted to 19.5MW to comply with the regulation.
The additional capacity will be produced without subsidy, Simec said.
Upgrades will include refurbishments to the infrastructure that collects and controls water flows in-between the Blackwater reservoir and the powerhouse, alongside modifications to the turbines.
The company, which is part of the GFG Alliance, said the upgrade is part of plans to develop the Lochaber estate lands to deliver low-carbon power to support its own industrial growth in the Highlands as well as the wider economy.
Simec Energy chief executive Jay Hambro said: “With one amendment to the energy legislation the Scottish government has effectively allowed our significant investments at Kinlochleven to proceed.
“Our plans to bring the plant back to full capacity are all part of our broader objective to bring more value to the Highlands through the use of more locally generated power. We will generate over 40% more clean green power at no cost to the consumer.
“The development of Kinlochleven and the investment that goes along with it will unlock additional local jobs and benefits to the local economy during the construction phase and secure more economic growth by powering local industries going forward.
“We applaud Scottish government’s amendment to the Renewables Obligation and we are grateful to the First Minister and to Minister for Energy, Paul Wheelhouse and his team for their work and vision in making this a reality.”
Wheelhouse said: “The scale of the climate challenge faced by the global community means it is vital that we support investment in renewable electricity generation capacity.
“So, I am pleased to have taken forward the legislative amendment, with Parliament’s support, to make it possible for operators of hydro generating stations to increase their renewable capacity and production and I am delighted that Simec are already signalling they are keen to take up this opportunity.
“I look forward to seeing the proposed development of the Kinlochleven plant, and to seeing the expected, associated economic and environmental benefits come to fruition.”