America’s first carbon-free renewable energy resource – hydropower

Often forgotten in the discussion of carbon-free power resources, America’s hydroelectric power plants have been consistent power producers for over fifty years. Since 1970, the country’s hydroelectric dams have produced more than 14.1 trillion MWh with an average annual output of 281 million MWh, which is an astounding statistic considering there has been little hydropower development during the past 30 years.  In 2019, hydro contributed 288 million MWh to America’s fuel mix – just behind wind’s record 295 million MWh contribution.     

With the right weather conditions, hydro can be a large carbon-free power contributor.  In 1997, driven by widespread high levels of winter snowfall and precipitation, hydro produced a record 356.4 million MWh which amounted to roughly 10.2% of total electricity generation across the country.  To put that in perspective, consider that in 2020, wind generated about 332 million MWh – about 8.3% of the total U.S. power supply.  Seventy years ago, in 1950, hydro accounted for around 30% of the total U.S. power supply, and a decade later, in 1960, water still accounted for about 20% of the overall power supply.

U.S. electricity production from hydro, wind, and solar resources, TWh

From data compiled by the Hitachi ABB Power Grids’ Velocity Suite research team, today there are over 2,000 (100 GW) operating hydroelectric plants in the U.S. made up of 79.1 GW of conventional hydroelectric capacity and 21.7 GW of hydro pumped storage (HPS) capacity.  The average age of the conventional fleet is nearly 65 years, while the average age of the HPS fleet is about 43 years.  

Though the majority of hydro capacity in the United States is owned and operated at federal agencies (49%), and public entities including utility districts, irrigation districts, states, and rural cooperatives (24%), there are a substantial number of investor-owned utilities (IOUs), independent power producers, and industrial companies (25%) owning hydropower capacity as well.

Hydropower’s long and storied history

Generating electricity by water was truly the first carbon-free power resource in America.  The world’s first hydroelectric project was used to power a single lamp at the Craigside Country House in Northumberland, England in 1878.  Though there were a handful of hydroelectric facilities introduced in the U.S. and Canada after Craigside, they served supply mills and a few small electric lighting installations.  The first commercial hydroelectric power plant opened in Appleton, Wisconsin, in September 1882.  The Vulcan Street plant, built along the Fox River, is now a National Historic Mechanical Engineering Landmark. 

Vulcan Street Hydropower Plant replica, Appleton, WI

Image: Courtesy of the Wisconsin Historical Society and the City of Appleton

H.J. Rogers, the President of the Appleton Paper and Pulp Company and the Appleton Gas Light Company, conceived the plant.  The development and construction of Vulcan occurred at about the same time Thomas Edison was building the first steam-driven electric power plant (12.4 MW) on Pearl Street in New York City.  The original dynamo (machine converting mechanical energy into direct-current electrical energy) constructed at Vulcan was 12.5 kW with the power used to illuminate sixteen candle lamps.  The success of Vulcan quickly led to the development of hydropower plants across the U.S.  By 1886, there were around 50 operating hydro plants, and by 1888, there were 200 plants in operation across the country.  Ten hydropower plants built in the 1800s are still operating today.  By 1907, more than 15% of all electricity produced in the U.S. was sourced from water. 

The first commercial alternating-current (AC) plant was built in Redlands, California in 1893, while the first hydro pumped storage facility was introduced in Connecticut in 1929.  

In the 1930s and 1940s several major hydropower milestones were achieved, including the completion of the iconic Hoover dam along the Colorado River in 1936, and the completion of the country’s largest power generating dam in 1942, Grand Coulee on the Colombia River in Washington.

The future is looking brighter

Most of the hydropower projects in development today center on life extension of the rapidly aging existing fleet, with additional interest in integrating power generating technology into the nation’s large number of non-power dams (NPDs), canals, and conduits built for flood control, water storage, irrigation, and other non-power producing purposes.

Additionally, driven by the rapid development of variable wind and solar projects, HPS is getting a strong look by grid managers as a potential grid balancing and long-duration storage resource.  Today HPS represents about 93% of all grid storage capacity in the country.  The 43 operating HPS projects account for about 99% of all-electric energy production among storage solutions. 

According to the Department of Energy’s (DOE), January 2021, U.S. Hydropower Market Report, there are about 50 GW of HPS projects currently under construction globally, most in China and Southeast Asia, while in the U.S., there are over 50 GW in various stages of development but currently, no significant projects have broken ground. 

Map of pumped hydro storage (PHS) project development pipeline by region and development stage as of December 31, 2019, GW

Source: The U.S. Department of Energy (DOE) U.S. Hydropower Market Report, January 2021, from data compiled by Oak Ridge National Laboratory from IIR and FERC

Despite the small number of hydro installations in recent years, with only 1.7 GW of capacity net increases reported between 2010 and 2019, there were 1.5 GW in development at the end of 2019.  More than half of those projects have federal licenses in-hand but are yet to start construction. 

Hydropower capacity changes by region and by type, MW values, and project count, 2010-2019

Source: The U.S. Department of Energy (DOE) U.S. Hydropower Market Report, January 2021, from EIA Form 860 (2010-18) and Form 860 Early Release (2019) Existing Hydropower Assets dataset, FERC eLibrary

There have been no large-scale hydro plants built in twenty-five years in the U.S.  The last projects that exceeded 250 MW were the Northern California Power Agency’s (NCPA) Collierville Powerhouse (253 MW) in 1990, and the expansion (478.8 MW) of Seattle City Light’s Boundary project in 1985 and 1986.

Hydroelectric projects in the news

About six years ago, Sioux Falls, South Dakota based, Missouri River Energy Services, with financing from Western Minnesota Municipal Power Agency (WMMPA), started construction on an ambitious hydro project designed to generate electricity from one of the nation’s non-powered dams (NPDs) near Pella, Iowa.  The Red Rock Hydroelectric Project (36 MW) dedicated in August 2020, is the second-largest hydroelectric dam in the state of Iowa.  The construction effort took place on the existing fifty-year-old U.S, Corp of Engineers (USCE) owned and operated Lake Red Rock Dam on the Des Moines River.   

According to statistics compiled by the National Hydropower Association, there are as many as 80,000 NPDs across America, representing a significant opportunity to develop dispatchable carbon-free power – the perfect complement to variable resources like wind and solar.  Additionally, the U.S. Department of Energy (DOE) estimates, that with only 3% development of NPDs and conduit type facilities, up to 12 GW of new electricity-producing capacity could be added to the nation’s grid rather quickly. 

The Red Rock power facility represents a successful private/public development project and serves as an indicator of the opportunity for other projects, especially with the current strong government support for carbon-free power across the U.S.        

In early January 2021, the non-profit Kauai Island Utility Cooperative (KIUC) signed a contract with energy-storage leader AES Corporation to build a solar-powered hydro pumped storage (HPS) system to provide power during nighttime hours across the island.  The KIUC contract involves two closed-loop HPS systems (4 MW and 20 MW) to be fully powered by a two-part solar framework involving 56 MW of direct current (DC) and 35 MW of alternating current (AC) – at full output, the 20 MW HPS would provide about 25% of the island’s current peak demand.  The system includes a small battery storage system next to the solar farm to provide backup power during times of cloud cover to keep the water pumping to the upper reservoirs.  Because the system is closed-loop, with only carbon-free solar power providing the energy to pump water, it qualifies for the federal investment tax credit (ITC).

In late January, Allegheny County in Pennsylvania announced they had entered into a 35-year power purchase agreement (PPA) with Rye Development for power generated at a 17.8 MW facility on the Ohio River.  The project is located at the existing U.S. Corps of Engineers operated Emsworth Main Channel Dam.  If all goes to plan, the project will begin construction later this year and is expected online by mid-2023.    

Projects like the NPD expansion at Red Rock and Allegheny County, and the Kauai Island hydro pumped storage plan, are indicative of America’s hydroelectric development potential as a carbon-free contributor in the years to come.

Supporting policy

The most significant problem facing hydro plant development is the long licensing process which, according to the DOE report, can take up to 10 years to complete. 

In support of hydro development, the American Water Infrastructure Act (AWIA) was enacted in 2018.  The policy directed the Federal Energy Regulatory Commission (FERC) to expedite the licensing process to no more than two-years from application filing to a final decision.  The policy supports the development of non-power dams and conduit structures, and qualifying hydro pumped storage facilities.

The 1978 Public Utilities Regulatory Policies Act (PURPA) supports renewable energy qualifying facilities (QFs), including small scale hydroelectric projects, by providing the right to interconnect to the grid and by guaranteeing a price for the electricity produced.  The power price is set at the ‘avoided cost’ of the buying company or organized market to contract or build an equivalent facility.  When the policy was established, more than 40 years ago, it resulted in a significant buildout of private hydro facilities across the country.

Global hydro market on the move

Global hydropower capacity increased by roughly 63 GW between 2017 and 2019 alone, and the pipeline is immense, with over 400 GW across more than 4,500 potential projects worldwide.  At the end of 2019, there were 53 GW of pumped hydro storage projects alone under construction around the globe. 

Map of hydropower project development pipeline by region and development stage as of December 31, 2019, GW

Source: The U.S. Department of Energy (DOE) U.S. Hydropower Market Report, January 2021, from data compiled by Oak Ridge National Laboratory from IIR and FERC

Hydropower provides tremendous benefits including black start performance, 1-hour ramps, frequency regulation, reserves, and can stand the test of time with life cycles potentially reaching 100 years.  With policy incentives and the need for carbon-free dispatchable power in the fuel mix, hydropower projects will increasingly look more attractive.

Hydropower in the United States will continue to play a significant and growing role in the transition to a cleaner power grid.  The long-duration storage of pumped hydro systems and the potential to convert existing non-power dams and conduits into electricity-producing assets makes hydropower in America a good bet.