Realizing Hydropower’s Potential in 2014

Issue 3 and Volume 118.

Atkinson   By Carl Atkinson, PE, Voith Hydro

The year 2013 was a breakout year for American hydropower. Last summer, President Obama signed two bills that will help expand hydropower production: the Hydropower Regulatory Efficiency Act, and the Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act. Both bills take aim at the licensing process for small hydropower projects, with the ultimate goal of providing electricity to more homes and businesses across the U.S. Though small first steps, the fact that both bills passed with overwhelming bipartisan support is a sign that policymakers on Capitol Hill understand the value of sustainable, affordable, reliable, and clean hydropower.

2013 also saw the completion or continued progress of several major hydropower projects for which Voith was proud to showcase its domestic and international design and manufacturing capabilities, including the PPL’s Holtwood Dam in Pennsylvania and AMP’s Ohio River projects. These projects are noteworthy as they represent some of the first significant additions of hydropower capacity at existing dams. After a monumental year, what’s in store for hydropower in 2014?

Though we’ve made progress, challenges lie ahead. New natural gas discoveries and new technologies have pushed gas prices lower, making it attractive to many energy developers.

While we have seen major victories on the policy front, both the Production Tax Credit (PTC) and Investment Tax Credit (ITC) have expired. Though hydropower is less reliant on these credits than other renewables, their expiration presents another challenge in a competitive energy landscape. The prospects for renewing the PTC or ITC are unclear.

Hydropower, however, has many advantages that will help it weather an ever-changing energy landscape. No other form of renewable energy can meet hydro’s long-term cost certainty. And while natural gas prices may ebb and flow, the natural forces of the hydrologic cycle replenish hydro’s fuel. Hydropower’s levelized costs are lower than any form of energy.

In addition, I expect the victories gained in hydropower policy will be more fully realized in 2014. The Federal Energy Regulatory Commission has started implementing the laws passed last year, and is currently seeking low-impact pilot projects that can be used to test a two-year, streamlined licensing process. The onerous process, which can take 10 years or longer, is cited as a major hindrance to further hydropower development. Elsewhere at the federal level, the Department of Energy’s Water Power Program continues to assist ongoing research and development in waterpower.

Regarding conventional hydropower, Voith is particularly excited about the latest innovations in the small hydro sector. While Voith has always been on the cutting edge of turbine development, our latest technological advancement is the StreamDiver. This compact turbine holds great promise for small streams and rivers with low heads at existing weirs, flowing through the country that currently do not produce power; the very type of development Congress is encouraging.

Larger projects are getting attention, too. Last year, the Obama Administration placed the Red Rock Hydroelectric facility in Iowa on its Infrastructure Permitting Dashboard. The Voith-supplied project is a retrofit of a US Army Corps of Engineers’ (USACE) Dam, and will bring 55-MW of energy to Missouri River Energy Services’ customers. The elevation of this project to the Dashboard is another signal that hydropower will play a vital role in our nation’s energy portfolio.

A recent study by the USACE gives the industry further reason to be bullish on its future. The study found 223 non-powered USACE sites capable of producing over 1-MW of power. These sites could generate up to 6,256-MW of electricity, with 2,818-MW “feasible under economic assumptions made in the report.” The USACE is also supporting its existing facilities, recently announcing a $1 billion, 20-year plan to upgrade hydroelectric facilities in the Nashville District.

Expanded hydropower has another, very important function: job creation. The hydropower industry employs approximately 300,000 people in the U.S. New development – or retrofitting existing facilities – means more jobs for engineers, machinists, developers, plant operators, and construction workers across the country.

For years, American hydropower was characterized by the Hoover Dams of the country – the iconic structures that helped fuel America’s 20th Century prosperity. While these dams continue to play a vital role in our energy portfolio, creatively developing previously overlooked and underutilized waterways represents the future.

In 2013, Congress and the Obama Administration took several strong steps to spur additional hydropower development. I look forward to these steps leading to tangible results in 2014 and beyond.

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