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In 1955, there was a severe drought in the west Highlands with the local paper, the Ross-shire Journal noting a hosepipe ban and no car washing in August. Although a lovely summer for tourists and visitors, the lack of rain meant that the water level in the reservoir for the Nostie Bridge power station was getting very low. The solution to increase the water level in the reservoir was to channel water from Loch Smeòraich to the reservoir. Local hydro-electric employees set to work with pick and shovel and dug a channel of nearly a mile. This photograph shows the workers just about to break through at the loch.

The North of Scotland Hydro-Electric project for the Lochalsh area was situated at Nostie Bridge, six miles from Kyle of Lochalsh. Work began in 1946 after an official pole raising ceremony that May, and the station was energized in December 1948. Original plans showed two dams, but the terrain proved unsuitable, and one dam was built across Allt Gleann Udalain. The reservoir, dam and power station were constructed at the same time as progress was going ahead with the distribution network, and in laying underwater cables across Loch Duich, Loch Long, Loch Carron and Loch Alsh.

The North of Scotland Hydro-Electric Board was established under the Hydro-Electric Development (Scotland) Act 1943. Thomas Johnston presented the Act in the House of Commons, declaring that by harnessing 'the great latent power of the region' it would assist in remedying the ills that affected the Highlands. Johnston told the Commons that 'industries, whether owned nationally or privately, will be and ought to be, attracted to locations in the Highlands, as a result of this measure'.

Ordinary consumers would have priority, then the anticipated large power users, and any surplus energy would be sold to the national grid. Profits from these sales would help reduce distribution costs to more remote areas, and assist in carrying out measures for the economic development and social improvement of the Highlands. This famous social clause gave recognition that the Hydro Board was envisaged as an instrument for the rehabilitation of northern Scotland, not just an organization to provide electricity.

The output from the power station at Loch Sloy, west of Loch Lomond, was intended to meet the demand for central and western Scotland. The surplus energy produced here would be used to subsidise the Morar and Lochalsh projects, it being unlikely these smaller schemes could pay their way. The cost of construction of these three projects was estimated at £4,600,000