FERC waives regulatory burden for hydrokinetics

20 June 2008

To demonstrate its commitment to supporting the development of hydrokinetic energy in the US, the Federal Energy Regulatory Commission has created a more efficient licensing process tailored to meet the needs of such pilot projects.

A 2007 report issued by the electric-power-research-institute (epri) found that over 90,000MW of hydro power potential remains untapped in the US. Over one-third of this can be accounted for by hydrokinetic resources, such as ocean, tidal, in-stream and constructed waterway projects. Indeed, it has been suggested that EPRI’s is a rather conservative estimate as existing studies and data are incomplete or have not yet been conducted. If fully developed it is believed that hydrokinetic projects have the potential to double hydro power production in the US, bringing it from just below 10% to almost 20% of the national supply.

Jon Wellinghoff is a commissioner with the Federal Energy Regulatory Commission (FERC), and he believes that hydrokinetic projects have the promise to ‘truly bring renewables to the entire nation’. He says it is an opportunity for states that want to increase the levels of renewables in their resource mix, but do not have adequate wind or other renewables to fully participate. ‘Here’s an opportunity for areas in the coastal states and those that have large rivers to truly participate...I think it has great promise,’ he says.

Wellinghoff also spoke about the fact that many hydrokinetic projects will be close to load centres, which is critical. ‘We have lots of wind in this country,’ he explains. ‘But unfortunately it is in North and South Dakota or Montana. The problem is how do you get that to Los Angeles or Phoenix or Atlanta? And so here we have an opportunity to bring power to the people.’

The future is looking bright for hydrokinetics across the states. As Philip Moeller from FERC adds: ‘This new generation of hydrokinetic technologies is generating a lot of enthusiasm across the country. We want to harness this enthusiasm to realise the amazing potential of this domestic renewable resource.’

FERC chairman Joseph T Kelliher admits that there are financial, technological and regulatory barriers which this new technology must overcome. ‘But the principal barrier to development,’ he says, ‘may be that it is as yet unproven, not just in the US but in the rest of the world. The technology must be proven before large scale commercial deployment can occur.’

Expedited licensing process

In April 2008, Chairman Kelliher announced that FERC was to help hydrokinetic pilot projects demonstrate their worth by reducing the weight of regulatory burden placed upon them. As a result FERC has developed a simplified licensing process to enable developers to test new technologies, determine appropriate sites and confirm environmental and other impacts.

The new process is an adaption of existing regulations. It will guide developers on an efficient pathway to seek regulatory modifications and waivers. These will allow for an expedited licensing process and short term testing of hydrokinetic projects. A project proposal will be reviewed under the Commission’s existing authority and regulations. Input from federal, state and local resource agencies, Indian tribes, NGOs and the public will also be incorporated.

FERC’s goal with such an expedited procedure is that a Commission decision can now be given within six months after filing for a pilot hydrokinetic licence application. This will enable projects to get into the water and start collecting important information from day one. FERC anticipates that it will form a good environmentally sensitive base from which much larger projects can move forward, and tap into the tremendous potential that hydrokinetic energy has in the US.

The main difference between a licence for a hydrokinetic pilot project and that for a conventional hydro power scheme will be the licence term. Original licences can be issued for up to 50 years but pilot licences will only last for five years. It is envisaged that such a short term will reduce any negative environmental impacts.

In order to qualify for hydrokinetic pilot project status, the following criteria must be fulfilled:

• Small projects - evaluated on a case-by-case basis, projects must be less than 5MW and will often be substantially smaller. The number of generating units and the project footprint will also be considered carefully when determining if the proposal qualifies.

• Short term licence – it is expected to have terms of five years.

• Avoid sensitive locations – any application must describe potential areas of sensitivity in the proposed project area and indicate reasons for this. All stakeholders will have the opportunity to comment on the applicant’s description and recommend that other areas be designated as sensitive. If Commission staff determine that a potential use conflict makes the proposal inappropriate for the expedited review process, it may be possible for the applicant to pursue the project through a standard licensing process.

• Strict safeguards – pilot projects will be subject to strict safeguards for public and environmental resources. These can potentially lead to project modification, shutdown or complete removal if unacceptable risks occur during the licence period. In addition an emphasis will also be placed on post-licence monitoring.

• Removal and restoration – unless a new licence covering the project site is obtained, complete project removal and restoration will be required before the end of the licence term. Applicants must provide plans for securing financing to remove the project and restore the site in their licence application.

The pilot project is available to those who wish to test the new technology whether or not they intend to pursue a standard licence application afterwards. Those hoping to move to a commercial scale or a build-out project if the scheme is successful must consult with FERC staff as early as possible. It is anticipated that this will be handled as a relicensing of a pilot project. It will entail a standard licensing process, including a National Environmental Policy Act review, and full consultation with all stakeholders.

When relicensing a hydro power project a Notice of Intent (NOI) is required five years before the licence expires. A pilot licensee can request that this be waivered if the proposed project is less than 1.5MW. In some cases where the NOI is filed and progress is being made towards the build-out application, the licence for the pilot project may be extended by one or more years while the applicant completes the licensing process.

FERC also strongly advises that those wishing to apply for a pilot project licence should maintain a preliminary permit while preparing project feasibility studies for the licence application. A permit maintains priority of application for a licence at a site for up to three years. It does not authorise construction or operation or provide special access to the site, but it does prevent another party from acquiring a licence or permit for the same site during the term of the permit.

FERC believes that the process will relieve regulatory burdens without compromising the environment. ‘It stands to reason that the potential impact of a project, authorised to operate for five years under conditions that allow the Commission to halt operation if it determines environmental impact is unacceptable, will be quite different than a large scale project licensed to operate for half a century,’ says Chairman Joseph T Kelliher. ‘For that reason, the scope of the environmental studies necessary to authorise a pilot licence should be reduced.’

Some are, however, questioning how the environment can still be protected as there is limited information available about the deployment of such large scale hydrokinetic technologies. FERC argues that there is sufficient information available to analyse the effects of such pilot projects on public and environmental resources. It also states that these will be small, short term projects, which will not be located in sensitive areas, and can be quickly modified or shut down if adverse impacts occur.

FERC will analyse the potential effects of projects on a wide range of fish, wildlife and environmental issues just as it does with any licence application. It will not be limited to endangered species. The potential impacts on commercial and recreational fishermen will also be taken into account. ‘We believe that this class of project may be carried out with little risk to public safety and the environment,’ the Commission says.


This new pilot licensing process is the culmination of FERC’s hard work since 2006. A technical conference, held in Oregon in October 2007, fully explored the issues related to the subject and formed the basis for the FERC staff’s final guidance issued in April 2008. And it has been welcomed by the US hydro industry.

‘Though still an emerging industry, hydrokinetic energy projects have great potential,’ says Linda Church Ciocci, executive director of the national-hydropower-association. ‘Establishing a regulatory process that allows development of these resources to move ahead is critical to their success. The fact that the Commission has found a way to do this, while providing necessary environmental safeguards, is a credit to their creativity and leadership.’

FERC acknowledges that the field of hydrokinetic energy, while promising, is rapidly changing, untested and uncertain. It believes that the new pilot licensing process is ‘efficient and prudent’ and will help to encourage testing and reduce uncertainties surrounding the technology. The Commission said it will consider additional steps as the technology, industry and knowledge base develop.

For further information, visit: www.ferc.gov/industries/hydropower/indus-act/hydrokinetics.asp

Permitting hydrokinetics

As of 31 March 2008 FERC had 25 preliminary permits pending for hydrokinetic projects. Apart from three ocean and one tidal scheme in the Atlantic Ocean, these were all for in-river projects located on the Mississippi, Ohio and Niagara rivers. In comparison there were five preliminary permits pending for the whole of 2006.
As of 31 March 2008, FERC had also issued 67 preliminary permits. Again these were mainly for Mississippi river locations with only one tidal and two wave proposals in the Pacific Ocean. In comparison only one permit was issued for the whole of 2006.
To date only one pilot licence has been issued. This is for Finavera Renewables Ocean Energy wave project on the Makah Bay in the Pacific Ocean (See the July issue of IWP&DC for more information on this scheme).

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