Episode #36: ‘Reinvigorating Hydropower’ with Steve Wright, General Manager of Chelan PUD - [an Energy Central Power Perspectives™ Podcast]

These are the questions posed to Steve Wright, General Manager of Chelan PUD and contributor to the Reinvigorating Hydropower Report, that this episode will explore. Steve joins host Jason Price and producer Matt Chester to sing the praises of hydropower, update the Energy Central community about developments in the world of hydropower that may be going unnoticed, and argue for the position that hydropower currently and will in the future continue to play in the critical clean energy transition.

Prefer to Read vs. Listening? Scroll Down to Read Transcript.

Thanks to the sponsors of this episode of the Energy Central Power Perspectives Podcast: West Monroe, Esri, Anterix, and ScottMadden. 

Key Links

Steve Wright’s Energy Central Profile: https://energycentral.com/member/profile/steve-wright-3

Reinvigorating Hydropower, post on Energy Central: https://energycentral.com/c/gn/reinvigorating-hydropower

Reinvigorating Hydropower, full report: https://www.chelanpud.org/hydropower/hydropower-for-the-future#:~:text=Reinvigorating%20Hydropower,cost%2C%20emissions%20and%20reliability%20perspective.&text=Design%20markets%20that%20value%20hydropower,societal%20goals%20for%20carbon%20reduction

TRANSCRIPT

Jason Price: 

Hello, and welcome to another exciting episode of the Energy Central Power Perspectives Podcast. As our regular listeners know, we discuss everything that is energy and utility related and connected directly with the people pushing the industry forward. I'm your host Jason Price of West Monroe, Community Ambassador with Energy Central and based in New York City. Joining me from Orlando, Florida is my friend and Energy Central Community Manager, Matt Chester. Hi, Matt, how are you doing today?

Matt Chester:

I'm doing great, Jason, and I'm ready for another invigorating conversation in the utility sector. We never record these episodes without learning a lot from our guests and so I'm eager to find what lessons we'll get to take away from today's episode.

Jason Price: 

Absolutely. Matt, just as people are getting used to the new normal that 2020 thrust upon us, it seems the world may be gradually building back and the utility space is still in its ever-evolving self. The UN Secretary General's vision for the recovery is to build back better, a theme the global organization has regularly used in the wake of the disasters and a message that has been adopted by President Biden, specifically to the COVID-19 disaster and the resulting economic fallout. In order to build back better, the United States is prime to deliver much-needed policy to address the climate crisis. This podcast has recently featured such dynamic developments paving the way for the future.

Jason Price: 

More climate-friendly utility with technologies like DER, electric vehicles, digital transformation, and more. But today we're going to move our conversation to renewable resources and the frequently overlooked, forgotten workhorse of the energy system known as hydropower. Hydropower may not be stealing headlines from solar and wind, but it can technically be considered the original source of clean energy dating back thousands of years to when hydro-powered wheels used by the Greeks to grind flour. In the United States hydropower electricity generation, as we know it dates back to the late 19th century. So the idea is anything but new, but there's still plenty of room for modernization to take hydropower to the next level moving forward.

Jason Price: 

Traditional hydropower accounted for 8% of U.S. generation in 2020 and is expected to remain at about that level for at least the next two years. But from a global business standpoint in 2019, the global hydropower generation industry garnered over $202 billion. A total that is expected to grow to 320 billion by 2027. A primary driver for this trend is the increased focus on hydroelectricity in emerging economies and the rising consciousness toward the adoption of clean energy technologies. A recent report called Reinvigorating Hydropower highlights hydropower as the premier renewable energy resource in terms of both cost and carbon reduction, but also acknowledges certain headwinds affecting the industry's growth. That report was put out by the National Hydropower Association and Chelan County Public Utility District.

Jason Price: 

And our guest today has key involvement in this area of study and focus. He'll help us get a better understanding of the hydro-power industry's current situation in the United States and share more information about its role as one of our nation's key energy resources. However, before we get into it, let's first give a shout-out to our sponsors who have made this episode possible to West Monroe. West Monroe works with the nation's largest electric, gas, and water utilities in their telecommunication, grid modernization, and digital and workforce transformations. West Monroe brings a multidisciplinary team that blends utility, operations, and technology expertise to address modernizing aging infrastructure advisory on transportation, electrification, ADMS deployments, DER, and cybersecurity.

Jason Price: 

To Esri, an international supplier of geographic information, GIS software, web GIS, and geodatabase management applications. To Anterix, Anterix is focused on delivering transformative broadband that enables the modernization of critical infrastructure for the energy, transportation, logistics, and other sectors of our economy. To ScottMadden, a management consulting firm, serving clients across the energy utility ecosystem, areas of focus include transmission and distribution, the grid edge, generation, energy markets, rates, and regulations, corporate sustainability, and corporate services. The firm helps clients develop and implement strategies, improve critical operations, reorganize departments and entire companies, and implement a myriad of initiatives.

Jason Price: 

Our guest today is Steve Wright, general manager of Chelan PUD, the public utility district responsible for providing electricity, water, and telecom services to Chelan County in Washington state. Steve has been a public power leader for nearly 40 years. And in that time he's gained recognition as one of our country's experts within the energy industry. During his career, Steve Wright has shown his commitment to collaboration and public engagement as he has led critical discussions about public power and policy decisions. Prior to joining Chelan PUD in 2013, Wright worked for the Bonneville Power Administration for over 32 years, serving the final 12 years as BPA's CEO, he holds numerous leadership positions on multiple boards, including the American Public Power Association and the Alliance to Save Energy.

Jason Price: 

And he is a strong advocate of key topics like hydropower relicensing, energy efficiency, and climate change. Hydropower plays a key role in the generation profile of Chelan PUD as is the case in much of the Pacific Northwest. It's with this lens that allows him to guide the utility to team up with the National Hydropower Association to release the reinvigorating hydropower report, looking at how this most reliable and constant of renewable resources is not a legacy fuel standing still, but can be key to the recipe of dynamic energy mixes across the sector in the years to come where decarbonization and diversification of generation is becoming more important than ever. I'm quite excited to dive into the hydro discussion with Steve learning from one of the most accomplished and knowledgeable in this field. Steve Wright, welcome to today's episode of Energy Central's Power Perspectives.

Steve Wright:

Well, thank you so much for being here. It's a real pleasure to join you. You guys are doing a great job keeping people informed about the energy industry.

Jason Price: 

Steve, one of the major highlights of the Reinvigorating Hydropower report is that it slates hydropower as the premier renewable energy resource, particularly when evaluating based on the pillars of cost reliability and carbon reduction, given the current global movement towards cleantech, how well do you think hydropower will be able to partner with wind and solar and other renewables to achieve the environmental goals as part of a system of energy generation?

Steve Wright: 

Well, it's going to be absolutely critical because our goals in the electric utility industry is a three-legged stool. We want to be clean, affordable, and reliable, and we're going to have to be all three to be the center point of the rapid carbon transformation that's going to go in on our country because we count on electrification and people are not going to be willing to fuel switch into electricity if it's not reliable, affordable, and clean. The key thing that hydropower brings is it's the most reliable of really any type of generating resource, not just renewable resources. And I say that because there are lots of characteristics of hydropower that are necessary for reliability. In fact, you have to think about all the different types of reserves that are needed on a system. The ability to have inertia, to be able to do black start if you have a shutdown of a system.

Steve Wright: 

Hydropower provides all those characteristics better than any other generating resource. So it's going to be critical as we're thinking about a system that's run primarily on variable, energy resources available when the sun shines and the wind blows to be able to have that core resource that can assure that you will have a reliable system and you want it to be low cost as well because affordability is going to be important. And hydropower brings that low-cost resource to the mix. I don't see us being successful as a country in the clean energy transformation without a significant element of hydropower.

Jason Price: 

Some of the hydropower pushback also comes from an environmental perspective. The impact that hydropower resources may have on local ecosystems like water resources. Of course, all generation sources have their own issues whether the land resource is needed for solar. The concerns of wildlife impacts by wind turbines, localized pollution from fossil fuels, or otherwise. How do you weigh the environmental hazards that may come with hydro-power compared with the benefits and how do you think they compare with other types of generation and how does the broader climate discussion factor into all this?

Steve Wright: 

Well, of course, the big advantage that hydro-power brings to the table is it has no air emissions and that there's no carbon that has to be reduced out of it. And clearly the biggest environmental challenge of our time is to address climate change. We know that there can be some issues with hydro-power certainly with respect to aquatic species. In the Pacific Northwest, salmon would be the big issue that we're concerned about because they're an anadromous species. They're traversing the river and going out to the ocean and then returning to complete their life cycle. And those are challenged with respect to having a dam in the middle of a river, but we are working to find ways to be able to address those concerns. We substantially reduced the mortality associated with passage at dams, for salmon and other species. And in fact, we are now making contributions because hydropower is so valuable to general habitat restoration beyond just the river system where the dam resides.

Steve Wright: 

This means that we're actually creating a benefit for society. Just to give you a sense, there are 11 million people who live in the Pacific Northwest today. A hundred years ago, there were only a million people. Those people are definitely having an impact on the environment for all salmon and steelhead that live in the Northwest. Contributions from the hydropower system are being made to help improve the habitat in tributaries and even into the pollution that goes into streams that actually increases the value to salmon. So hydro-power is number one, making sure that we are not making our biggest environmental problem, carbon emissions, any worse, and in fact, actually helping to improve it. And then on top of that, hydro-power is creating environmental advantage for the species that are impacted by the operation and existence of the dam.

Jason Price: 

Let's continue with the report. Despite the immense benefits you know from hydro, the report also delved into the relative ignorance of hydropower by policymakers, which is identified as an impediment to the growth of hydropower. Can you elaborate this challenge and its impact on the industry for our listeners? Why is hydropower being overlooked and what should the industry be doing to ensure the resource is duly represented in relevant policy discussions?

Steve Wright: 

Well, this has been a challenge for the hydropower industry. I think the fundamental problem has been the hydro-power has been around for a long time, as you indicated in the introduction to this segment. The fact that it's been here and people have seen the dams and they think of them as maybe even part of the landscape, it doesn't make it new and exciting. Whereas some of the newer technologies, wind and solar tend to get more of the attention. So they get the policy attention that comes with that. I think what has been not well recognized in the public policy arena and we're seeking to change in part through the reinvigorating higher power report is to describe for folks that while the concrete itself is pretty sturdy and probably going to last for a long time, the guts inside that dam are constantly moving in a very turbulent environment and as such, they are degrading over time and they require a significant amount of re-investment in order to maintain their capability.

Steve Wright: 

We are constantly investing in our hydropower turbines as they wear out over time. Most of the hydropower in this country was developed certainly the largest hydropower by the mid-seventies to early eighties. And so it's 40 to 50 years old. That means that there is a significant investment that is necessary in order to maintain it and those investment decisions are being made commensurate with the alternative resources that could be purchased at the same time. So policies like tax credit policy, where certain resources get a benefit and hydropower does not, or renewable portfolio standards that don't include hydropower. I think they were put in place originally to try to move some of the technologies that were further out in the marketplace in terms of their commercial competitiveness into a more commercially competitive position.

Steve Wright: 

But as that has been successful, it's now time to revisit those policies. And just say, if the goal is to try to produce electricity with zero carbon, then all generating resources that produce zero carbon should be treated in the same way, whether it's tax credits, renewable portfolio standards, or even markets, organized markets can create advantages for certain types of resources over others. So we're trying to create that level playing field to assure that in fact, we will produce the maximum amount of least cost renewable resources that will assure the reliability of the electric power system of our country.

Jason Price: 

Steve, as we speak, the Senate has approved Jennifer Granholm as Secretary of Energy. When it comes to policy, where do you feel the Biden administration will be treating hydro compared to past leadership?

Steve Wright: 

I don't think that we know enough at this point to be able to make a determination as to how this administration will approach hydropower versus other administrations. But I think one thing we know for sure, and that's the environment that this has been a situation is creating is one that is extremely concerned about climate change and about our need to reduce carbon emissions. There are many people walking into this administration who have past experience. I spent nearly 30 years working in the federal government and there's a lot of names I recognize that people who are coming back and it gives me a lot of confidence, actually, that you have people with that kind of experience who are walking in and understand when you're trying to make this kind of very significant change to the power system of our country. It has to be done thoughtfully and carefully, and then it's going to take a variety of different types of renewable resources to produce the clean, affordable, and reliable outcome.

Steve Wright: 

And these are smart folks who know that nothing would do more damage to the clean energy transformation that we all want to accomplish than to have an electric power system that did not produce the kind of reliability and affordability that we have enjoyed in the past. Hydro-power is clearly a critical component in order to create that three-legged stool of a clean, affordable, reliable system. And there are lots of folks walking into this administration who know that. With the overarching goals that the president has said, including his discussion of establishing clean electric standards and clean electric standards by their definition would include hydro-power. It creates the opportunity for us to be able to have this be in fact, a period of Renaissance for the hydropower industry.

Matt Chester: 

So, Steve, I know that hydropower is also somewhat more of a regional energy source based on the natural geography. And obviously there's a reason it's so prominent in the Pacific Northwest. So I'm wondering if you think we need to, rather than look to the federal government for a real key look into where the direction's going. Is it more important to refer to the state and local governments for that type of leadership?

Steve Wright: 

It's going to take a combination of both. Electric policy has always been a combination of federal state and local governance and regulation, and that will apply in the next 10 to 20 years as well, particularly as we try to make this clean energy transformation, for example, the formation of a clean electricity standard, the specifics and details of that will make a difference in terms of what types of resources are able to succeed. And what, in fact, ultimately the portfolio mix will be across the country. No doubt about it. The Pacific Northwest has a big advantage. We have a very big river and the form of the Columbia on the side of a very steep hill. And those two things are what you need to in order to create hydropower. And we are able to produce a lot more of it in the Pacific Northwest than in other parts of the country, that doesn't mean that there aren't hydropower opportunities across the country.

Steve Wright: 

There are lots of dams that do not have turbines in them, which there could be opportunities to be able to produce hydropower. And I'm going to come back to the biggest challenge that I think we face in this clean energy transformation is we lack clarity around whether there is a enough clean capacity to be able to maintain a reliable system. Something that can produce energy on demand has flexibility and can be there on the coldest days and the hours when the sun is setting and do so at low cost, we are struggling to find the resource that can meet all of the needs the country is likely to have as we go towards a hundred percent clean electricity system, we're going to need as much hydro-power as we can get unless a radical technology development comes along that provides that clean capacity. So I see certainly there parts of the country, like the Pacific Northwest, where hydropower is a bigger component than others, but I see hydropower being an element of the solution of getting to the clean energy transformation all the way across the country.

Jason Price: 

Another challenge comes from the accounting and labeling of hydropower. For example, certain clean energy or renewable energy mandates don't recognize hydropower as eligible for their purposes. Why is this the case and how do you as a hydropower advocate work against these roadblocks? Do you think the big multilateral organizations fail to lobby for hydropower and inform the public about its value or are wind and solar industries better and more effective?

Steve Wright: 

Well, I think it starts from generally public policy seeks to encourage the new and the innovative. Think back to just a decade ago, wind and solar were easily selling at over a hundred dollars a megawatt-hour, and they needed incentives to help to pull them into the marketplace. It was a demand pull type initiative that the government was seeking to pursue and appropriately so. If we were going to get to a clean energy transformation, we needed more renewable non-carbon emitting resources. And for the most part, those efforts have been successful. They've been put in place in a variety of different places, whether it's a tax credit policy, renewable portfolio standards that focus on specific types of renewables or market initiatives that create advantages for certain types of renewables, all of those were put in place for good reason.

Steve Wright: 

We're now reaching a point though, where the challenge is not just to try to move renewables from a few percentage points of the electricity supply of the country to 15 or 20%. We now need it to go up to 60, 80, possibly more percent in order to be able to hit carbon goals. The goals for our country have changed as the technology itself has evolved. As we reached those points, it becomes important that all of the generating resources that have the capability to produce electricity without carbon emissions be treated on a level playing field to make sure that in fact, we are going to create not just a clean system, but in an affordable and reliable system.

Steve Wright: 

And that's where I think the key challenges that people have tended to look at hydropower as an established resource, that doesn't need much help, but in the environment where we're going to be trying to maximize production from non-carbon emitting resources. And again, you've got some older assets in the form of hydropower that are degrading over time. It's going to be important that we create incentives to assure that we get the maximum lease cost and reliable amount of carbon-free generation that we can. And that means treating all resources that are carbon-free in the same manner.

Jason Price: 

What can the hydropower sector do to recapture the imagination as a long-term solution for the future clean energy mix is everything there is to know about hydropower already out there, or does it have the opportunity for technological revolution like those by other clean energy sources?

Steve Wright: 

Well, I think there are two answers to that question. The first is we really do have to create the clarity around the need to be able to produce carbon-free electricity during what sometimes is referred to as the dark hours. The hour is when it's difficult for some of the other variable energy resources to be able to produce power and yet the load still exists. We just have to do a good job of explaining that we need the capability to be able to produce electricity on all hours of the day, across the year. And that there are certain types of renewable resources that have that capability. Beyond that though, I do believe there are opportunities for a technology revolution in the hydropower industry as well. Now I will admit that the ability to translate the BTU's of falling water into kilowatt-hours is the highest of any type of generating resource in the hydropower industry, but there still are opportunities to do better.

Steve Wright: 

And one of the things that we have spent a lot of time looking at is the question of how can we use new sensor technology to assure that we are understanding what's going on inside of our turbines and to hopefully avoid forced outages, because we don't know what's going on inside that turbine and something bad is happening. Something is degrading and we need to be able to get in there and fix it before we get a catastrophic failure or some kind. New sensor technology can allow us to better understand what's going on inside a turbine. The key here is both applying the technology, but then also creating big data sets. Big data sets are what allow you to better understand and to predict the types of outcomes that can occur and especially the negative outcomes that you want to avoid.

Steve Wright: 

That's why we created the Hydropower Research Institute with the New York Power Authority and Southern Company. Chelan PUD created the Hydropower Research Institute to gather data from hydropower turbines around the country so that we could create that big dataset and then to be able to share it with others. And we've done this in a co-op model so that hydro-power owners are able to work together to be able to share the data and be able to analyze it and hopefully in a least cost method. As of today, we have more than half of the turbines in the country who have committed to provide their data to the Hydropower Research Institute. And so we are in the process of developing that big dataset. And I would just add for anybody from the hydropower industry, if you're not part of HRI, we welcome you, come join us. We'd love to have you participate. The bigger the data set, the better the data is going to be.

Jason Price: 

Well, it's clear from our discussion that hydropower has a huge growth potential. And given the implementation of industry favoring policies hydro-power can realize that potential sooner rather than later. Wherever I'm sure that in our limited time here, we've really only scratched the surface of talking points. So for our listeners who have their interest peaked for the future of hydropower, what would you recommend they do to learn more and perhaps get involved as an advocate for greater hydropower presence on the grid?

Steve Wright: 

Well, I would start with the report that you mentioned at the beginning called Reinvigorating Hydropower. You can find it either on the National Hydropower Association site or the Chelan County Public Utility District, or Chelan PUD site available in both places. It seeks to describe some of these key issues that we're confronting in the industry, some of which we weren't able to get to today. So hopefully it'll pique your interest to go take a look. I think that's a good starting point. And then in general, the National Hydropower Association does a great job of providing information about the hydropower industry opportunities that are there, and some of the challenges that we face.

Jason Price: 

Steve, I want to thank you for such a lively and educational discussion. We'll definitely stay tuned to see whether or not these recommendations will be considered and how hydropower will reinforce its role as a key energy resource. Thank you once again for joining us today.

Steve Wright: 

Thanks so much for having me.

Jason Price: 

You can always reach Steve through the energy central platform or directly with Chelan PUD, where he welcomes your questions and comments. Once again, I'm your host Jason Price. Plug in and stay fully charged in the discussion by hopping into the community at energycentral.com. See you next time at the Energy Central Power Perspectives Podcast.

About Energy Central Podcasts

As a reminder, the Energy Central Power Perspectives™ Podcast is always looking for the authors of the most insightful articles and the members with most impactful voices within the Energy Central community to invite them to discuss further so we can dive even deeper into these compelling topics. Posting twice per month (on the second and fourth Tuesdays), we'll seek to connect with professionals in the utility industry who are engaging in creative or innovative work that will be of interest to their colleagues and peers across the Energy Central community. Some podcasts may be a continuation of thought-provoking posts or discussions started in the community or with an industry leader that is interested in sharing their expertise and doing a deeper dive into hot topics or issues relevant to the industry.

The Energy Central Power Perspectives™ Podcast is hosted by Jason Price, Community Ambassador of Energy Central. Jason is a Business Development Executive at West Monroe, working in the East Coast Energy and Utilities Group. Jason is joined in the podcast booth by the producer of the podcast, Matt Chester, who is also the Community Manager of Energy Central and energy analyst/independent consultant in energy policy, markets, and technology.  

If you want to be a guest on a future episode of the Energy Central Power Perspectives™ Podcast, let us know! We’ll be pulling guests from our community members who submit engaging content that gets our community talking, and perhaps that next guest will be you! Likewise, if you see an article submitted by a fellow Energy Central community member that you’d like to see broken down in more detail in a conversation, feel free to send us a note to nominate them.  For more information, contact us at community@energycentral.com. Podcast interviews are free for Expert Members and professionals who work for a utility.  We have package offers available for solution providers and vendors. 

Happy listening, and stay tuned for episode #19 in a few weeks! Like what you hear, have a suggestion for future episodes, or a question for our guest? Leave a note in the comments below.

All new episodes of the Energy Central Power Perspectives™ Podcast will be posted to the relevant Energy Central community group, but you can also subscribe to the podcast at all the major podcast outlets, including:

• Energy Central Power Perspectives™ Podcast on iTunes: https://podcasts.apple.com/us/podcast/energy-central-unnamed-podcast-series/id1488804391

• Energy Central Power Perspectives™ Podcast on Spotify: https://open.spotify.com/show/5jiUn8vzSq1t99WtECLn1j

• Energy Central Power Perspectives™ Podcast on Stitcher: https://www.stitcher.com/podcast/energy-central-tobenamed

• Energy Central Power Perspectives™ Podcast on TuneIn: https://tunein.com/podcasts/Business--Economics-Podcasts/Energy-Central-Podcast-p1274390/

• Energy Central Power Perspectives™ Podcast on SoundCloud: https://soundcloud.com/energycentral

Thanks once again to the sponsors of this episode of the Energy Central Power Perspectives Podcast: West Monroe, Esri, Anterix, and ScottMadden.