The first plans for a power plant in this section of the Steyr dated back to the years after the First World War. In 1920, Oberösterreichische Wasserkraft und Elektrizitäts-AG (OWEAG) together with the company Stern & Hafferl applied for a concession to use the water in the Steyr River above and below the Steyrdurchbruch power plant. After assessment of several variations, OWEAG submitted the "Grosse Enns" project in 1929, which had been prepared by engineers Schachermayer, Sing and Beurle from Linz, for approval under the Water Act. Josef Stiny prepared the geological expert's report. Due to the economic crisis and conflicts with other electricity companies, the project was dropped. It was indeed reinitiated in the Third Reich, but there were already conflicts at that time with the projects of Steirischen Wasserkraft- und Elektrizitäts- AG (STEWEAG) to develop the Styrian Enns. Wartime events after 1942 made it impossible to tackle a construction project of that magnitude.
In 1945, Oberösterreichische Kraftwerke AG (OKA) started the project planning of the "Molln-Innerbreitenau" storage power plant, which they continued up to the beginning of the 1960s. In 1963, Ennskraftwerke AG (EKW) took over the planning work for the "Large Reservoir Project Molln", and preliminary geological and geodetic work took place as of 1964. The final project was designed as a multipurpose facility for energy generation, drinking water supply and protection against flooding and envisaged several stages of development. The first realised stage of development included the Klaus power plant with a barrage and two hydroelectric generating sets. During the course of the second stage of development, a downstream power station Ternberg II with a tunnel from Breitenau to Ternberg, a power and pumping station at Enns kilometre 49.5, and a dam at the Köhlerschmiede with a height of 33.0 meters above the bottom of the valley at river kilometre 9.4 of the Krummen Steyrling were planned. The project also included a Breitenau lower reservoir, a Klaus pump station at Steyr km 41.8 with a Steyr connecting passage from the Klaus power plant to Breitenau as well as a "Große Klause" dam in the Reichramingbach with a pumping station and a connecting passage to Krummen Steyrling. The third stage of development envisaged the construction of a Molln upper hydroelectric station with a dam by Kienberg. Its height was to be 140 m above the bottom of the valley. There was also to be a cavern in Breitenau.
In 1968, Ennskraftwerke AG (EKW) focussed its planning on the first stage of development with the Klaus power plant. When a referendum was held in the municipality of Molln in 1960, 66.1% were against and 33.1% were in favour of the construction of the power plant. Towards the end of the year, those opposed to the power plant formed the "Save the Steyr Valley" and "Save the Steyr River" societies, which subsequently organised demonstrations against construction of the power plant. Water Act negotiations took place on October 28th and 29th as well as on November 10th and 12th, 1971. The building decision was written up on April 16, 1972. On October 7, 1972, the appeal made to the constitutional court by the "Rescue the Steyr Valley" society against Water Act approval for the Klaus power plant was rejected with a suspensive effect. The nature protection experts Lothar Machura and Herbert Ursprunger were hired for the landscaping in the area of the power plant. The protests by the "Rescue the Steyr Valley" and "Rescue the Steyr River" societies against construction of the power plant resulted in serious consideration being given to protecting the landscape.
On January 15, 1973, work began with the erection of a seismic station in Molln. Work in the reservoir began in April 1973. The tunnel for bottom drainage was started on August 25, 1973 and for the headrace tunnel on November 12, 1973. The breakthrough of the headrace tunnel was on January 13, and on February 15, 1974, after cessation of operations in the old Klaus power plant, the Steyr was channelled through the bottom drainage tunnel so that work could be completed on the dam while it was dry. In February 1974, filling work on the head of the reservoir ended. Reinforcement of the headrace tunnel was completed on March 12 so that the Steyr could be diverted through the headrace tunnel. The excavation work for the tunnel ended on July 15, 1974, and the concrete work started the next day. The concrete work was finished on April 20, 1975 and the last seam injection was completed. Successive filling of the reservoir started on April 24, 1975, which was completed on June 27 when the full storage level was reached at a relative elevation of 463.00 metres above sea level. The reservoir had to be lowered by 6 metres in March 1976 for another seam injection.
Besides its main function of generating electricity, the reservoir of the Klaus power plant also has the job of reducing peak levels of flooding runoff. By lowering the reservoir by an additional 6 m as well as by filling it up to 3 m above the relative reservoir elevation of 463,00 metres above sea level, it can be freed up to collect flood water. In order to be able to empty this designated reservoir with the help of the bottom drainage tunnel in good time before a flood wave arrives, a method was developed to prepare a forecast for the inflow that is to be expected in four hours based on precipitation and to calculate the respective drainage that is required. To determine the amount of precipitation that falls in the catchment area of the Klaus power plant, an observation network made up of rain gauges, remote transmission rainfall recorders and water-level measuring posts was setup that provides the necessary data for the forecast together with meteorological recordings.
The flooding reduction is effective primarily in the more heavily settled lower course, in the flat terrain on both sides of the Steyr, and is very important for those low-lying districts of Steyr that are directly an the Steyr River.