Scottish Power, the state utility, said it was examining upgrades to double the capacity from the Cruachan hydroelectric power station, housed in a man-made cavern in the Scottish highlands, to more than 1,000 megawatts.
"The Scottish government recognizes the potential for future development at Cruachan and other similar proposals for hydroelectric storage, to contribute to a balanced mix of energy generation across Scotland," the first minister said in a statement Tuesday. "This could see hydro power generate up to one third of Scotland's entire generating capacity in the next decade."
The Scottish government said 40.3 percent of the country's electricity was generated from renewable energy resources in 2012 and it's "well on the way" to a target of 50 percent by next year.
Scotland holds a referendum for independence from Great Britain later this year. Salmond said his country will remain a reliable energy partner regardless of the outcome.
"Scotland's position as a net exporter to the rest of the U.K. is increasingly important to ensure security of supply across the network," he said. "It is clean, green, renewable Scottish electricity that will keep the lights on."