Hydropower is currently the largest source of renewable electricity, and a major contributor to the US power system. With a capacity of 79.64GW (excluding pumped storage, at the end of 2014), the almost 2,200 active plants account for roughly 7% of installed generation capacity – enough to power more than 20 million homes.
Furthermore, despite a slowdown in developments since the era of big dams in the 1970s and ’80s, hydropower has continued to grow. From 2005 to 2013 the net capacity increase was 1.48GW, with growth positive in every region of the country (and largest in the northwest, where more than 580MW were added).
A new report from the US Department of Energy envisages hydropower as an important future source of flexible, cost-competitive, and carbon-free renewable energy.
Status of hydropower in US
The hydropower fleet in the US has been constructed over the course of a century, and is very diverse in terms of location, size, ownership and operational modes. It includes high-flexibility pumped storage hydropower (PSH) and peaking plants, run-of-river facilities with capacity factors as high as 80%, and projects associated with large reservoirs where electricity generation is viewed as a by-product of other authorized purposes.
The top five states by installed hydropower capacity are Washington (21.3GW), California (10.3GW), Oregon (8.3GW), New York (4.7GW) and Alabama (3.1GW), and 11 states receive more than 10% of their electricity from hydropower. Most of the capacity is in large projects built between 1930 and 1970. A larger number of plants are owned privately, but publicly-owned plants tend to be larger in size, and make up 73% of all capacity.
New hydropower under development
As of December 2014, there were 331 projects in the development pipeline, amounting to a total capacity of 4.37GW. Currently, 407MW of capacity is under construction, and another 263MW have received the necessary authorizations. However, the majority of the projects are in relatively early stages of the development process, having only begun to study project feasibility and apply for necessary authorizations.
Development of non-powered dams (NPD) and conduits, along with new large-scale PSH projects, dominate the development pipeline. The median project size is small, 10MW or less. Most conduit projects being pursued are located in the western half of the country, while new stream-reach development (NSD) projects, i.e. those on previously undeveloped stream-reaches, are overwhelmingly concentrated in the northwest, including Alaska.
With changes to the permitting and licensing process for mainly smaller hydropower projects in recent years, less cost and time may be spent in federal permitting and may spur greater interest in development.
There is currently 21.6GW of PSH capacity in the US and this comprises the overwhelming majority (97%) of the utility-scale electricity storage (as it does worldwide)
While the existing PSH fleet was largely built to complement baseload nuclear or thermal plants, one of the main reasons for development of new PSH is that its flexibility makes it ideal for the integration of additional clean energy technologies.
In 2014, the Federal Energy Regulatory Commission (FERC) authorized the first original license for PSH in more than 15 years (Eagle Mountain) and a second PSH facility (Iowa Hill) as part of the relicensing of an existing hydropower project, the Upper American River Project. Both of these are in California, an attractive market because of the high wind and solar penetration and a state renewable portfolio standard with a target of 33% by 2020.
As of December 2014, 51 active PSH projects with a total capacity of 39GW were in the FERC licensing process. All the projects are 150MW or larger, with the average size 787MW.
Future prospects for US hydropower
The report notes the importance of optimizing and upgrading existing assets, with much of the recent growth resulting from capacity additions to existing projects. At least $6 billion has been invested in such activities in the past decade. However, the expiration of the financial incentive programmes that many recent hydropower projects have used poses questions as to the effects on new project development and which financing mechanisms will be relied upon in the future.
Another issue is that the way in which hydropower is classified as “renewable” for purposes of renewable portfolio standard compliance or future carbon policies could weigh heavily on project development prospects. Hydropower is currently treated very differently across state-level renewable portfolio standards, which have been major drivers of growth in other renewables. Each of the 29 states that include hydropower as a primary-tier renewable defines hydropower eligibility in a unique way. Common restrictions on eligibility are inconsistent and include project size, type, age, and a variety of implicit and explicit environmental sustainability criteria.
The National Hydropower Association, quoting a 2012 report from the US Department of Energy, estimates that developing existing dams the US could double its hydropower capacity without building a single new dam.