The US Department of Energy’s Hydropower and Hydrokinetic Office (H2O) is marking a year defined by structural change, increased funding and a broad set of project and deployment milestones across hydropower and marine energy.
Renamed in early 2026 from the Water Power Technologies Office, H2O now sits within the Office of Critical Minerals and Energy Innovation and is taking on additional responsibilities, including hydroelectric incentives. The changes follow wider policy direction introduced in 2025, with an emphasis on expanding domestic energy capacity and accelerating technology development.
Within that context, hydropower continues to provide a stable contribution to the US grid, accounting for nearly 6% of utility-scale generation and the majority of stored energy capacity. Marine energy remains at an earlier stage but is being developed for applications ranging from coastal communities to offshore industries, with a technical resource potential equivalent to around 57% of current US generation.
Expanding the project pipeline
A central part of H2O’s activity over the past year has been building out a pipeline of projects. The office negotiated 51 new research and development awards in 2025, alongside running two prize programmes aimed at advancing next-generation water power technologies.
Funding has been directed at both system performance and future capacity. This includes $13m for nine projects focused on improving hydropower’s ability to respond to changing grid demand, and $7.1m for a pumped storage feasibility study in collaboration with the Navajo Nation. At a smaller scale, targeted investment such as a $1m award to River Connectivity Systems is addressing operational efficiency and downstream water quality.
Alongside project funding, H2O has supported workforce development through collegiate competitions and funding for the Hydropower Foundation, reflecting a parallel focus on skills and industry capacity.
Tools, data and technical progress
Work at national laboratories has produced a series of tools and datasets intended to support both developers and operators. At Pacific Northwest National Laboratory, a hydropower mapping tool has been demonstrated to help aggregate demand across plant sizes, while Oak Ridge National Laboratory has updated its Hydropower Market Report and developed a national database on fish passage infrastructure.
Other outputs include a non-powered dam assessment toolkit from Idaho National Laboratory, covering more than 2,600 sites, and updated irrigation visualisation software. Argonne National Laboratory has also completed analysis on pumped storage commercialisation, identifying renewed opportunities for deployment in several regions.
Marine energy development has continued in parallel. A wave energy converter developed with Sandia National Laboratories and research partners has been deployed as part of an ocean observation buoy off North Carolina, where it has been generating power and data since late 2025.
From testing to deployment
Beyond research and development, the past year has seen progress in testing, validation and early deployment. Technical assistance programmes have expanded, with developers matched to testing facilities through the Hydropower Testing Network and additional projects supported under the TEAMER programme.
Financial incentives have also continued, with seven payments issued under the Hydroelectric Efficiency Improvement Incentives Program in fiscal year 2025 to support plant upgrades.
A key development has come at the PacWave test facility in Oregon. The site has signed a power purchase agreement with the Bonneville Power Administration, enabling wave-generated electricity to be delivered to the grid between 2026 and 2030. The agreement represents a shift from research activity to grid-connected generation.
This activity is supported by increased federal funding. The 2026 appropriations act allocates $220 million to hydropower and marine energy research, the highest annual level to date. H2O is directing this funding toward increasing generation, modernising existing assets, addressing supply chain challenges and streamlining licensing and permitting.
Taken together, the office’s work over the past year reflects a combination of near-term system improvements and longer-term technology development, with hydropower maintaining its established role in grid stability and marine energy moving closer to commercial application.
Further information can be found on the The Hydropower and Hydrokinetic Office website.
