The hydroelectric power market in the United States is facing some unique challenges, at the same time as new opportunities are arising to boost development and redevelopment work.

This dichotomy arises first from the fact that hydropower in the US is a well-established renewable energy technology, with many facilities being 60+ years old and a significant number having passed the century mark and still operating reliably. The second contributor is the fact that there is definite interest in boosting the supply of reliable baseload power in the country, as more intermittent renewables (wind and solar) are being tied into the electric grid. A third contributing factor in this dichotomy is the lack of support for the construction of new dams in the country, coupled with the reality that many of the prime sites for hydroelectric generation have already been developed.

In its recently released World Hydropower Outlook, the International Hydropower Association noted that only 96MW of new hydropower capacity was added in the US in 2022. By comparison, total installed capacity in the country in 2022 was 102GW. The report also said the US has an estimated exploitable potential of over 65GW.

The focus of activity

It is undeniable that new hydropower capacity is needed in the US to both increase clean power generation and support the grid as generation intermittency increases. Recognizing the opportunity and need, there is a two-fold push for adding new hydro capacity in the US.

The first is rehabilitating and uprating existing powerhouses. This is a major initiative for many companies, as it is the most attainable option at this time to both keep existing generation and increase capacity. The US Department of Energy estimates that this approach could enhance the country’s electricity generation capability by 8% to 10%, or more.

All of the three major government agencies that generate hydropower – US Army Corps of Engineers, Bureau of Reclamation and Tennessee Valley Authority – are in the midst of long-term rehabilitation programs.

Other rehabilitation work under way includes a massive, 15-year modernization and digitalization program by the New York Power Authority called Next Generation Niagara. The 2,675MW Niagara Power project in New York is the state’s largest producer of electricity. The upgrade is intended to ensure this clean energy power plant continues providing electricity for the next 50 years. Work involves conducting comprehensive penstock inspections, replacing a gantry crane, upgrading and digitalizing control systems, and overhauling and/or replacing mechanical components that have reached the end of their operating life.

Additional major rehabilitation work in progress is an overhaul of the 774.3MW Wells hydroelectric project on the Columbia River in Washington State. This is the primary generating resource for the Douglas County Public Utility District, and work includes generator rebuilds and unit refurbishment.

The second is adding hydroelectric plants at existing non-powered dams. Recently, the Corps of Engineers reported that Rye Development was working to add four hydropower plants to existing Corps locking facilities in the greater Pittsburgh region. Together, the four facilities are anticipated to generate 250,000MWh of electricity annually. In the Pittsburg District alone, the Corps operates 23 locks and dams and 16 reservoirs, with nine licensed and operating hydropower plants. This is just a fraction of the potential available across the United States at existing dams. Reclamation has a similar program and opportunity for developers to add hydropower generation at its dams in the western US.

Legislation to support hydropower

In the US, two key challenges to getting more hydropower developed are the regulatory structure and lack of supportive market mechanisms. The process of receiving a Federal Energy Regulatory Commission operating license to construct a new conventional hydropower project can be quite lengthy, with it not being uncommon to take 10+ years to get a project from study to completion. Additionally, most markets in the US are not structured to appropriately compensate hydropower for the benefits it provides beyond power generation. This can delay or even curtail new development.

Recent legislation passed in the US is providing both policy and financial support for the needed expansion of hydro generation. Already, the Infrastructure Investment and Jobs Act (or Bipartisan Infrastructure Law) has provided significant financial support. For example, in May 2023, $48 million was announced for Tribal communities, with some of that supporting upgrades to power projects. That same month, the Department of Energy announced nearly $600 million in funding to modernize hydroelectric power and advance marine energy throughout the country.

And in the hopefully near future, the Inflation Reduction Act adopted in 2022 will support and encourage new hydropower generation in the country. Several provisions are intended to spur new hydro, including production incentives, efficiency improvement incentives, resiliency upgrades and even pumped storage support. In addition, incremental new hydropower generation will be eligible to receive production tax credit on par with what is available to wind generating resources. However, for many elements of the act, the industry is awaiting guidance from the US Department of the Treasury.

Getting pumped storage moving

Of course, no conversation on hydropower and its role as a baseload renewable resource can be complete without discussing pumped storage hydro. After all, worldwide, this technology provides about 95% of all available energy storage capacity. Total installed capacity in the US is just over 22,000MW, according to the IHA outlook. But no new pumped storage has been built since the 1980s.

There are dozens of sites being investigated for potential future development. These include a recently announced proposal by the Tennessee Valley Authority to either expand its existing 1,652MW Raccoon Mountain pumped storage facility or construct a new facility at one of two locations in Alabama. And Premium Energy Holdings received a Federal Energy Regulatory Commission preliminary permit for the 600 MW Nacimiento Pumped Storage Hydro Project in California in May 2023.

In a slightly different approach to pumped storage, Dairyland Power Cooperative, in collaboration with Mine Storage International AB and Michigan Technological University, said it is evaluating the development of underground pumped storage hydro at closed mines. This option transforms a mine into a “circular asset” and provides the benefit of being a “closed-loop” system, with the reservoirs not connected to an outside body of water.

However, the development of pumped storage in the US is not a straight path. In May 2023, Mid American Energy and Missouri River Energy Services announced they discontinued work on development of the 1.8GW Gregory County Pumped Storage Project in South Dakota. They did not give a reason for discontinuing the project but said they made this decision based on the same due diligence they employ for every project and that they will continue to evaluate all options. Other companies have investigated, and discontinued, pumped storage sites in the US recently.

Your chance to learn more

The HYDROVISION International event, held annually in the US, provides training and education to members of the global hydroelectric power and dams industries. The conference program provides information in eight targeted tracks that cover the gamut of the industry, from Civil Works and Dam Safety to Water and Environment. Its content is driven and developed by a committee of experts from the United States and about 10 other countries. Over three days, nearly 70 separate educational sessions are offered.

This event takes place July 11 to 13, 2023, in Charlotte, N.C. This is a perfect opportunity to learn from and network with hydropower industry experts and gain valuable continuing education. This year’s HYDROVISION is anticipated to gather together about 2,000 people from more than 40 countries, as well as more than 150 product and service providers. Click here to learn more about this conference and how you can benefit from attending.

Elizabeth Ingram is senior content director for the HYDROVISION International event and Hydro Review website. She has provided content to the global hydropower and dams industries for 19 years.