Energy Minister Michael Shanks said: “We need to increase our ability to store energy for when the sun isn’t shining, or the wind isn’t blowing.
“With these projects storing the surplus clean, homegrown energy produced from renewable sources, we can boost our energy security by relying less on fossil fuels, protect household bills, and help make Britain a clean energy superpower.”
The UK already has four pumped hydropower schemes – two in Scotland and two in Wales. The largest is at Dinorwig in Wales, opened in 1984 in Snowdonia National Park.
The power station was built inside Elidir Fawr mountain using a reservoir built 2,000 feet above sea level and linked to a second lake 1,700 feet lower down.
Mr Miliband and Mr Shanks want to unleash many other schemes over the next two decades, meaning many new dams will be built across mountainous regions in Britain.
Under the so-called cap and floor funding scheme, developers will have a guaranteed minimum income in return for a limit on revenues.
A spokesman for the Department of Energy Security and Net Zero said deploying 20 gigawatts of long-term energy storage – an eight-fold expansion – could save the electricity system £24bn by 2050.
This, they claimed, would “reduce household energy bills as additional cheaper renewable energy would be available to meet demand at peak times”.
Several hydro projects, targeting up to a dozen lochs, are already at the planning stage in Scotland.