The National Hydropower Association and Chelan County Public Utility District have released a report advocating for public policy changes that could “unleash capabilities of hydropower for the next 30 years.”
The report, “Reinvigorating Hydropower: A cornerstone of our clean, affordable, reliable electric future,” argues that without significant public policy changes, the nation risks losing hydropower capacity and associated grid benefits.
The report takes a broad approach to the changes it says are needed, including market design, a technology neutral approach to policies such as state renewable portfolio standards and federal tax credits, improvements to the hydropower licensing process, and more federal and state support for research and development projects.
“We have to be good at not just one of these things, but all of them,” Steve Wright, general manager of Chelan PUD, said in an interview.
One of the key arguments in the report is that hydropower should be treated equitably with other non-emitting renewables in order to tap the wide range of benefits that hydropower can offer, such as a non-polluting source of generation and the ability to respond quickly to changes in load and voltage frequency.
The report argues that renewable portfolio standards and tax incentives were designed when technologies such as wind and solar power were nascent but now need to be adapted so that they treat hydropower “equitably.”
A key concept of RPS design was the concept of “additionality,” which particularly limited the ability of existing hydropower assets to participate in RPS programs. Instead, those policies sought to encourage the building of new renewable energy projects. The report argues that RPS policies should be revised so that reinvestment in hydropower facilities are eligible to meet additionality requirements.
The report says that regulators in each region should “reexamine existing market design rules, practices and resource procurement programs to incentivize the generating attributes needed to achieve carbon reduction and reliability at low cost.”
The authors cite a report by Environmental Economics that found that a price on carbon in hydropower rich Oregon and Washington could achieve emissions reductions at a much lower cost than a renewable portfolio standard, while helping to preserve existing hydropower assets in states that already get the majority of their electricity from hydropower projects.
Another key reform the authors of the report call for is revisions to the current process for hydropower relicensing. The current process can “cost millions of dollars and take 10 years or longer – even for projects being relicensed” and is “the longest, most complex development timeline of any renewable energy technology,” the report says. And while recent changes to license term policy may unleash investments at existing projects if properly implemented, more action will be needed to streamline and improve overall licensing outcomes, according to the report.
The report also recommends that the owners of hydropower plants work with equipment vendors to better understand turbine performance and operating parameters so that warranties can be better matched to the conditions of optimal economic dispatch. New sensor technologies and mega data analysis makes it possible to increase hydropower output, according to the report.
“We should be having a conversation” with vendors about the range of conditions hydro assets are operating under that would allow performance parameters, warranty requirements and market design to work in conjunction, Wright said.
The main message of the report is to bring a least cost approach to a clean, reliable grid. “We are trying to get to a level playing field,” said Wright.
The report is available here.