The 50MW pumped storage site will be developed in a series of disused slate quarries and the project’s developer, Quarry battery Company (QBC), said the facility should be operational by 2017.
The Glyn Rhonwy in Llanberis site, which is located close to the Snowdonia National Park, is expected to have an operational life of 100 years.
QBC is also establishing an independent trust to manage initial grants totalling £250,000 and then on-going direct contributions of £10,000 a year to support community projects.
QGC managing director Dave Holmes said: “Pumped storage is the missing piece of the jigsaw for renewables and can help Britain keep the lights on.
“Our scheme for the Glyn Rhonwy quarries is just the start. By putting small-scale storage near to centres of energy generation such as wind farms, and others near centres of heavy consumption such as major cities, we will cut down on distribution losses and network transmission costs, making whole regions of the UK increasingly self-sufficient in renewable electricity.”