The Tummel Valley is well suited to a hydro-electric scheme, representing a large catchment with heavy rainfall. Its potential was recognised by the Grampian Electricity Supply Company who built power stations at Rannoch and Tummel Bridge in the 1930s. With the last completed in 1962, there are now nine stations located between Pitlochry in the east, Dalwhinnie in the north and Rannoch Moor in the west.
To the north, the 2.5-megawatt (MW) Cuaich Power Station in Glen Truim discharges into Loch Ericht, the largest reservoir in the scheme, where the 2.2 MW Ericht station is fed from Loch Garry in the mountains above. From Loch Ericht, the water passes down through the 45 MW Rannoch station, on the northern shore of Loch Rannoch.
In the west the Gaur Dam feeds the 6.4 MW station on the River Gaur, which flows into Loch Rannoch. Gaur was the first power station in Scotland to be automated (1953). From Loch Rannoch water flows down to Dunalastair Reservoir, the 34 MW Tummel Bridge station (built in 1935) then into Loch Tummel. The 75 MW Errochty station, the largest in the scheme, is fed by tunnel from Loch Errochty to the north. Stone from the 10 km long tunnel is used to face the power station. Water from Loch Tummel is conveyed by tunnel, represented for tourists by the nearby Clunie Arch, to the 61.2 MW Clunie station, at the confluence of the Rivers Garry and Tummel, just south of Killiecrankie, before flowing into the small man-made Loch Faskally.
Loch Faskally, the last reservoir in the scheme, is held behind the Pitlochry Dam. The dam, its 15 MW power station and particularly its fish-ladder, which allows salmon to pass upriver to spawn, attract approximately 500,000 tourists each year. Water reaching Pitlochry may have passed through five stations generating a total 245 MW of power.
The scheme is owned and operated by the privatised Scottish & Southern Energy Plc (previously Scottish Hydro-Electric), headquartered in Perth, with an annual turnover of £2.3 billion. For many years the control centre was at Tummel Bridge but, with automation and the need for integrated management, operations have transferring to Perth.