We need a clean, reliable and affordable electric grid to achieve deep decarbonization goals, including electrification. With its carbon-free profile, premier reliability characteristics, and low cost, hydropower should be foundational for decarbonization. To achieve its potential contribution, however, hydropower needs a fresh look from policymakers. I believe that without significant public policy changes, the nation risks losing existing hydropower capacity and its associated grid benefits.
For more than 100 years, hydropower has translated energy from falling water into electricity at an efficiency rate that exceeds 90% on many projects. Hydro also provides more of the services necessary for reliability than any other resource, including operating reserves, frequency regulation and black start capability. It is a premier generating resource.
In my service territory in Washington state, our hydropower assets connect us to our community. As a public power utility, it’s important that our customers are highly satisfied. Our hydro facilities support an amazing array of recreational facilities, which the community points to as one of the key benefits we provide. The facilities are also a visible example of environmental stewardship, as we have a “no net impact” habitat conservation plan in place for threatened and endangered salmon and steelhead.
Hydropower represents 65% of electric generation here in Washington, but this issue is much bigger than the Pacific Northwest. As of last year, the U.S. had more than 100 gigawatts of hydropower capacity, including pumped storage. In its 2016 Hydropower Vision report, the Department of Energy found that this capacity has the potential to grow to nearly 150 GW by 2050. The report states that a combined $209 billion in savings from avoided global damages from greenhouse gas emissions is possible, including $185 billion in savings from continuing to operate the existing hydropower fleet through 2050.
If the country intends to rely on existing hydropower to support the needs of a modern electric grid, public policies affecting hydropower need to be modernized as well. Most of the hydropower generation in this country was built from the 1930s to the 1980s, which means it’s aging. There is a massive need for reinvestment to maintain this capability. Issues such as market design, renewable portfolio standards, the relicensing process, and tax policy will largely influence whether these investments will be made. If hydropower is going to be a key component of a decarbonized system, then it should be treated equitably with other non-emitting renewables.
In Reinvigorating Hydropower, a white paper we prepared with the National Hydropower Association, we identified six key areas that must be addressed to facilitate long-term reinvestment in hydropower. If we don’t address some of these issues, the relative value we can place on hydropower goes down, which makes it harder to attract capital.
- Design the markets to value all the services that hydro provides.
- Make policies and incentives for carbon-reduction goals technology neutral.
- Don’t exclude hydro reinvestments from additionality criteria.
- Improve the relicensing process.
- Expand federal and state research and development.
- Improve contracting and quality control practices.
For hydropower asset owners, these things make a difference in terms of the timing and level of investment that we will make. For example, enhancing hydropower reliability will be crucial as the grid decarbonizes and brings more variable energy resources online. Sensor technologies developed over the past decade, along with data analytics, can enable owners and operators to better predict equipment failures and avoid forced outages.
With aging equipment and a weak investment climate, hydropower can no longer be a silent partner in achieving our clean energy and decarbonization goals. One of the biggest threats to hydropower is indifference. A combination of regulatory, incentive and market policies that better value the hydropower system can encourage refurbishment and expansion.