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Policy Innovation Needed for Hydro

Tools to wring extra green energy from rivers

EDITOR’S NOTE: The U.S. Energy Information Administration recently reported on Ohio efforts to wring 300 megawatts of hydroelectric power from dams that previously did not have electric generating units. The Energy Times invited Marc S. Gerken, a leader in that effort, to explore the issues involved. This is the last of a two-part series of articles.

AMP’s run-of-the river facilities are predictable, with life expectancies of 80 to 100 years.  These projects produce both on-peak and off-peak energy with much higher capacity factors than other renewable resources such as wind and solar.

The projects are environmentally and regulatory neutral, do not require fuel procurement, help meet rating agency metrics, and do not have a waste stream. They are an important part of AMP members’ diverse portfolios.

New hydro development will require innovation. The Federal Energy Regulatory Commission and U.S. Army Corps of Engineers need to continue to look for innovative ways to streamline the licensing and permitting process, which still contains redundancies and inefficiencies that unnecessarily slow deployment of new hydro resources.

FERC has made strides through the development of new licensing processes, including new Integrated Licensing Process and Alternative Licensing Process intended to simplify and improve communications, but there’s a need for further improvements.

The Water Resources Reform and Development Act enacted by Congress in 2014 has also helped, but the Army Corps of Engineers must meet the spirit of the law by prioritizing hydro development projects.

AMP is working with the National Hydropower Association and others to push for this increased efficiency.

Innovation is also needed in hydro development. Incremental improvements can be realized by employing new technologies at existing facilities.

Converting non-powered dams and developing small hydro projects can add significantly to this clean, renewable resource. Additionally, the nation needs to look at pumped storage projects, especially in terms of innovative approaches like closed-loop, off-river systems to gain additional megawatts and create grid storage.

The capital needed to develop projects continues to be a challenge. We need a larger pool of Clean Renewable Energy Bonds to help facilitate development. AMP used both CREBs and Build America Bonds extensively to fund our $2.6 billion hydro investment.

The subsidy for both programs has been impacted by the federal sequestration, costing participating AMP members more than $62 million. This is a policy issue that must be addressed.

­­­AMP members participating in hydro projects are taking the next step in helping secure an energy future for generations to come. The nation needs renewable resources and hydro needs to be prioritized because it is clean, reliable and a sound long-term investment.

Obviously, the energy markets economics have changed dramatically since mid-2008 due to the shale gas development, efficiency gains and economic recession. But AMP and its members are proud of our decisions and the development of these hydro assets will allow members to remain sustainable, locally-owned utilities for a long time.

Marc S. Gerken is president and chief executive officer of American Municipal Power.

 

 

 

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