The Swiss utility has held a foundation stone-laying ceremony to mark the start of construction on the project, which forms an important part of efforts to boost electricity supplies in western Switzerland and meet the growing demand for balancing energy caused by the growth in renewable energy.

Under the CHF330 million project, FMHL will construct a new underground cavern at the Veytaux power plant and install two pump-turbine groups with a total capacity of 240MW.

The Veytaux plant uses water discharged from the Hongrin dam 800m above it to generate electricity during periods of high energy demand. When electricity demand is low, water is pumped up from Lake Geneva to the Hongrin reservoir for storage.

On completion of the project in 2014, the Veytaux plant will have an installed capacity of 480MW, of which 420MW will be used for operations and 60MW held in reserve, says FMHL.

FMHL is jointly owned by Romande Energie, Alpiq, Groupe E and the municipality of Lausanne.