Hydropower growth slows, but value remains high


Hydropower is a powerful and plentiful energy source. The U.S. Congress estimates that the country's hydropower industry employs 300,000 workers and generates about 7 percent of total U.S. electricity. The U.S. had 79 GW of installed hydropower in 2011, according to data from the Worldwatch Institute.

The 1.2 MW Kankakee Low-Head Hydropower Facility in Illinois. Credit: NREL

The benefits and potential of hydropower suggest it can play a significant role in the future of the U.S. energy mix. It looks to be an especially valuable asset as renewable energy gains a higher percentage of the total power grid.

"We see a growing need for more hydropower, especially as states set strong renewable energy goals," Matthew Nocella, a spokesperson at the National Hydropower Association (NHA), told FierceEnergy.

"Hydropower will be vital to not only meeting those targets, but providing the grid with the ancillary services necessary to ensure reliability as more intermittent renewables like wind and solar are brought online," he said.

A recent report by the Electric Power Research Institute (EPRI) also touted hydropower's ability to mitigate an increasing share of renewable energy.

Still, hydropower often gets downplayed in the national discussion of renewable energy that so often focuses on solar and wind generation. There are a number of barriers facing wider adoption of hydroelectric generation.

A history of challenges

Benefits aside, hydropower development in the U.S. has faced numerous challenges over the past quarter century, leaving it in the shadow of expanding technologies including solar and wind. Challenges with hydro include a lack of siting locations, high capital investment requirements and complicated value stream, according to EPRI's report, "Quantifying the Value of Hydropower in the Electric Grid."

The U.S Energy Information Administration's "2013 Annual Energy Outlook" confirms these obstacles and projects stagnant growth for hydroelectric generation in the coming years.

The Worldwatch Institute estimates as much as 200 GW of small-scale hydroelectric projects could come online worldwide by 2020

The data notes that, "Nearly all renewable capacity additions over the period [2011 to 2040] consist of non-hydropwer capacity, which grows by more than 150 percent..."

Analysis from the Worldwatch Institute points to negative impacts of large-scale hydro developments. For instance, despite its potential to be low cost and low emission, drawbacks for larger projects include the need to dam rivers and create reservoirs; a high rate of pollution and emissions during the initial construction process; and the potential to displace human populations and disrupt local ecosystems. 

 "Stream"-lining hydropower regulation

As with many renewable technologies, policy and regulatory uncertainty is a big part of hydropower's adversity.

The Federal Energy Regulatory Commission (FERC) regulates 1,600 non-federal hydropower projects for a total of 54 GW of generation. This is more than half of all the hydropower generation in the United States. FERC estimates that 71 percent of its regulated hydropower projects have a generating capacity of 5 MW or less. There are currently 70,000 MW of proposed capacity undergoing FERC's regulatory process, according to NHA estimates.

In addition to FERC, hydropower is regulated by federal and state agencies, NGOs, tribes and public organizations. NHA believes that paring regulatory red tape will help quicken hydropower approval.

"The [regulatory] system strives to promote development while protecting important environmental values. However, it can also contain redundancies and inefficiencies that unnecessarily slow the deployment of clean renewable hydropower and delay much-needed environmental enhancements and benefits," Nocella said.

There are several pieces of legislation currently being considered in both houses of Congress that would streamline the regulatory timeframe for low-impact hydro projects. This could be a big boost to the future of hydropower development.

"There is a great deal of potential for the development of additional hydropower projects throughout the country, including small projects," said Jeff Wright, director of the Office of Energy Projects at FERC, at a recent Congressional hearing. "Commission staff remains committed to exploring with all stakeholders every avenue for the responsible development of our nation's hydropower potential."

But he also cautioned that any new regulations should be careful not to add unnecessary steps to the process.

"I am just, though, not certain whether an additional licensing process is necessary. We have been able to issue licenses in the matter of a few months where the project proponent has selected a site wisely, stakeholders had agreed on information needs and state and federal agencies perform their responsibilities quickly," Wright said.

The NHA notes that providing financial incentives is also a good way to keep hydropower development rolling.

"Hydropower production can be one of the most affordable forms of electricity once built, but is extremely capital intensive upfront. Incentivizing this type of development is important," Nocella said.

Despite the list of challenges, the future of hydropower is not doomed. The Worldwatch Institute estimates as much as 200 GW of small-scale projects could come online worldwide by 2020. And EIA data projects that hydropower will remain the leading source of renewable generation through 2040, even with little growth in new capacity.