hydropower

The US, European Union, and other countries that have set net-zero carbon emission targets and participate in the Paris Accord are placing big bets on wind and solar to produce green hydrogen (H2). Here in the US lawmakers and policy makers seem to have overlooked hydropower as a source of renewable energy even though it accounts for 52 percent of the nation’s renewable electricity generation and 7 percent of total electricity generation . For example, indigenous communities and environmental groups are opposed to hydropower because of its impacts on fish, wildlife, and water quality.

Many hydropower owners are taking a hard look at the economic value of their projects in light of climate change, aging infrastructure, increased operating costs due to environmental compliance, and evolving electricity markets. Many small hydropower projects are especially affected by the above factors since they provide only electric energy and not the peaking capacity and ancillary services valued by the electric grid. Nevertheless, these projects have value since a growing number now contain license conditions to reduce environmental impacts when they were initially built. In a previous column, this author also discussed a way for owners of “low impact hydropower” to fully monetize their project’s attributes by seeking renewable energy certificates (RECs).

This author now also suggests that hydropower can play a significant role in jumpstarting the production and distribution of green hydrogen (H2). However, this will require all hydropower owners and developers to reimagine how their projects will operate and diversify their revenue streams over the next 20 years. If hydropower projects can produce sufficient quantities of green H2, they could accelerate efforts to decarbonize natural gas by blending green H2 in the natural gas grid and help states meet their net-zero emissions. On November 23, 2020, Southern California Gas Co. and San Diego Gas and Electric announced the creation of a Hydrogen Blending Demonstration Program . This program is the first in California and the nation.

One of the biggest challenges with the hydropower industry has been its laser focus of trying to influence Congress and regulators on streamlining the siting process instead of reimagining a non-traditional role for hydropower outside of the electric grid. The National Hydropower Association (NHA) has influenced both Congress and the Federal Energy Regulatory Commission (FERC) to streamline its environmental and regulatory reviews to some degree. The NHA has had some success to date but is still short of what is expected by many hydropower owners and developers . For example, FERC has promulgated an expedited process for issuing original licenses for qualifying facilities at existing nonpower dams and for closed-loop pumped storage projects, pursuant to sections 3003 and 3004 of the America’s Water Infrastructure Act of 2018. NHA has also seen progress in extending the time to construct new hydropower projects and set a minimum FERC license term of 40 to 50 years instead of 30 to 50 years.

Despite the above progress, FERC’s regulatory reviews remain some of the most comprehensive and take years for staff to complete, despite the size of the hydropower project. Both small and large hydropower projects that were licensed or constructed prior to passage of the National Environmental Policy Act of 1969 (NEPA) are especially challenged by new environmental conditions included in new licenses and operating conditions. 

NEPA REVIEW, POWER PURCHASE AGREEMENTS, AND FINANCING CHALLENGES

Comprehensive NEPA reviews and compliance with environmental laws during the life of a hydropower project are here to stay and are not likely to change. Despite being a form of renewable energy, many hydropower projects are lightning rods for public controversy and duplicative regulation by other federal and state agencies other than FERC. The controversy centers on competing use of rivers. Many indigenous communities and environmental groups and environmental agencies want to use water to restore anadromous fish runs and protect fish, wildlife, water quality, and recreation. In contrast, hydropower owners and other communities want to use the project for power generation, water supply, and flood control and other developmental uses, including the prevention of salt-water intrusion on ground water in coastal areas. Download the complete article in the Climate & Energy Journal. [node:read-more:link]

Wind and solar projects along with their related renewable energy certificates RECs) are on the minds of energy generators, consumers and policy makers. This begs the question as to why hydropower and specifically low impact hydropower are not eligible to receive the same attention. A closer look at the issue reveals both the states and consumers have much to say about the technologies that qualify for RECs. In fact, low impact hydropower projects may qualify for RECs under some individual State Renewable Portfolio Standards (RPS) or the US Environ- mental Protection Agency’s (EPA) Green Power Partnership but not all.

This places the burden on a hydropower developer who believes that their project qualifies for a REC to either work with the relevant state agencies to determine the project’s eligibility and then with third-party validation organizations such as the Low Impact Hydropower Institute (LIHI) and the Center for Resource Solutions Green-e Standard (CRS)2 to be eligible to receive a REC. That may be difficult and expensive, because a state’s view of hydropower is based in part on past regulatory practices associated with the construction and operation of hydropower projects. Some states may understand this, but it may be difficult for them to make exceptions to existing rules and regulations even when a project’s operation changes and benefits environmental resources.

The process of obtaining RECs for a hydro- power project is complicated because the definition of “low impact hydropower” is not defined by federal law. In fact, many states and consumers automatically exclude hydropower because of its reputation as being threatening to the environment and aquatic life. In contrast, states and consumers readily embrace wind and solar as projects that would qualify for RECs even though the effects of wind farms on bird and bat populations and the large environmental land requirements of solar projects are well known. This author believes that rethinking the definition of low impact hydropower is long over- due. States and most consumers fail to recognize the significant changes in law and the Federal Energy Regulatory Commission’s (FERC) regulatory program and case law regarding US hydropower that have occurred since the passage of the National Environmental Policy Act (NEPA) of 1969. When these factors are considered, this author believes there are large numbers of hydropower projects that would qualify as “low impact” and ultimately qualify for RECs. If that occurred, hydropower could be recognized for its contribution in various state RPS programs and in the EPAs Green Power Partnership and play a larger role in the nation’s energy transition away from fossil fuel generation. This would benefit hydropower owners and companies wishing to decarbonize their organizations. Read the full article in the Climate and Energy Journal. [node:read-more:link]

The use of electric storage is a critical component to the integration of intermittent clean energy technologies on the electric grid. That being said, however, just mentioning Pumped Storage Hydro (PSH) to some stakeholders often unleashes a torrent of criticism of how its use adversely affects riverine and lake aquatic systems. Nevertheless, PSH deserves another look, especially the Closed-Loop variety which does not affect rivers and lakes. [node:read-more:link]

Recently, a colleague doing work for the United Nations Development Programme in Russia requested me to send her the best guidance available on planning international hydropower projects. She was attempting to minimize impacts on biodiversity and ecosystem services. While I have been away from Hydropower for a while, I was really hard pressed to find current documents that would help her. Most reports were too general and few, if any, talked about planning and regulating hydropower projects, which can last 50 years or longer. I found this difficult to understand despite the wealth of experience in the U.S. and Canada in siting and regulating hydropower. 

I quickly realized that in the hydro arena, we were still grappling with environmental, regulatory and social issues. The same is true for siting natural gas and renewable energy. However, the stakes are higher today since the World Bank Group and the Asian Infrastructure Bank are investing in hydropower in to spur economic development, address Climate Change and move countries away from fossil fuels. So I dusted off three publications below that should help both developing and developed countries to better plan and manage their hydropower and other energy projects. Here's a short explanation of each:

[node:read-more:link]