Released July 29, 2013 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The U.S. hydroelectric generation market appears to be overflowing with business opportunities, speakers and attendees agreed at last week's HydroVision International conference in Denver. But the industry remains challenged to turn that potential into actual projects where dirt is turned and electricity is generated.
Industrial Info is tracking 361 active hydropower capital and maintenance projects in the U.S. that carry a total investment value (TIV) of $81.1 billion. The regions with the highest level of project activity are:
A closer look at the stage of project development for U.S. hydropower projects shows a very high percentage of projects and project value are in the "proposed" stage. Only a small percentage of projects have moved into the "approved" or "under construction" phase. Of the $81.1 billion in U.S. hydropower projects, more than $70 billion remains "proposed," meaning they could be delayed. Only about $5 billion of projects--about 7%--are actually under construction.
All industrial projects face the potential or delay or cancellation, but the percentage of U.S. hydropower projects still in the "proposed" category suggests the industry is having an unusually high level of difficulty winning licenses, obtaining funding and starting construction when compared to other Power Industry projects, or even projects in other industries.
Several HydroVision speakers referenced a study prepared in 2009 for the National Hydropower Association (NHA) (Washington, D.C.) that projected up to 60,000 MW of new hydroelectric generation could be built in the U.S. by 2025 under certain conditions--such as a federal Renewable Portfolio Standard (RPS) that mandates 25% of all electricity be produced from renewable generation like hydro, wind and solar. The study also included a less aggressive policy scenario where a 10% federal RPS was in place.
In the 25% RPS scenario, more than 34,000 MW of new hydro generation could be built in the West, creating nearly 800,000 construction jobs. In the Southeast, a 25% RPS could lead to the construction of more than 12,000 MW of new hydro and more than 210,000 construction jobs.
Click on the icons at right for maps showing new hydro generation potential measured in new generation added and jobs created.
But today, there is no federal RPS, and one does not appear likely in the near future, NHA Executive Director Linda Church Ciocci told HydroVision attendees last week. For more on that issue, see July 25, 2013, article - U.S. Hydroelectric Power Leaders Try to Reverse the Industry's Perception Problem.
The absence of that federal RPS calls into question the projection that 60,000 MW of new hydro generation could be added to the U.S. generating fleet by 2025. In their remarks at HydroVision, Ciocci and Kurt Johnson, principal at Telluride Energy (Telluride, Colorado), referenced the study's potential to add 60,000 MW of new hydroelectric generation.
Click on the icon at right for a pie chart showing different hydro technologies that could be built by 2025 if the federal government adopted a 25% RPS.
In the 25% RPS case, the NHA study projected new pumped-storage projects could add 24,000 MW of new U.S. generation by 2025. But speakers at another HydroVision panel acknowledged--and rued--the reality that no new pumped storage projects have been built in the U.S. for 17 years.
"At current natural gas prices, where electricity can be generated for about 3.5 cents per kilowatt-hour, a lot of this [potential hydro] won't happen," Johnson said. Power development "is all about getting the price right, and given current economic and regulatory conditions, it's harder to get the price right" for new hydroelectric generation.
Speakers at HydroVision criticized the federal hydropower licensing process, the absence of a federal RPS, state RPS rules that disadvantage hydro, and the exclusion of hydropower from eligibility for federal tax credits, notably the Production Tax Credit (PTC), which has helped the wind energy industry dramatically expand the fleet of turbines across the U.S.
"Hydro needs a level playing field," Alan Krause, chairman and chief executive at MWH Global (Broomfield, Colorado), told about 1,500 attendees at HydroVision's keynote session. "It is wrong that hydro is not part of the discussion of renewable energy. Regulators and lawmakers should be technology-neutral, but they have been picking winners and losers. States should reverse RPS rules that work against hydroelectric generation. Hydro's value--as a clean, low-cost, reliable, fast-ramping resource and energy storage asset--is not recognized in the market, and we need to change that."
"Hydro is at a crossroads today," Krause continued. "I am very bullish on hydro, but we need to channel our enthusiasm into policy activism." He urged attendees to work the NHA and other hydro trade associations to secure regulatory and legislative treatment that reflects its value to the U.S.
Registration at this year's HydroVision conference increased about 45% from last year's event--to about 2,900 from about 2,000 in 2012. Conference officials said it was the world's largest hydro event. The industry will need all that enthusiasm and more as it works to translate potential opportunities in the U.S. to new generating units.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Industrial Info is tracking 361 active hydropower capital and maintenance projects in the U.S. that carry a total investment value (TIV) of $81.1 billion. The regions with the highest level of project activity are:
- West Coast, with 111 projects valued at $34.3 billion
- Rocky Mountains, with 52 projects worth $21.9 billion
- Southwest, with 35 projects valued at $6.8 billion
- Southeast, with 43 projects worth $5.7 billion
- Great Lakes, with 42 projects valued at $5.5 billion
A closer look at the stage of project development for U.S. hydropower projects shows a very high percentage of projects and project value are in the "proposed" stage. Only a small percentage of projects have moved into the "approved" or "under construction" phase. Of the $81.1 billion in U.S. hydropower projects, more than $70 billion remains "proposed," meaning they could be delayed. Only about $5 billion of projects--about 7%--are actually under construction.
All industrial projects face the potential or delay or cancellation, but the percentage of U.S. hydropower projects still in the "proposed" category suggests the industry is having an unusually high level of difficulty winning licenses, obtaining funding and starting construction when compared to other Power Industry projects, or even projects in other industries.
Several HydroVision speakers referenced a study prepared in 2009 for the National Hydropower Association (NHA) (Washington, D.C.) that projected up to 60,000 MW of new hydroelectric generation could be built in the U.S. by 2025 under certain conditions--such as a federal Renewable Portfolio Standard (RPS) that mandates 25% of all electricity be produced from renewable generation like hydro, wind and solar. The study also included a less aggressive policy scenario where a 10% federal RPS was in place.
In the 25% RPS scenario, more than 34,000 MW of new hydro generation could be built in the West, creating nearly 800,000 construction jobs. In the Southeast, a 25% RPS could lead to the construction of more than 12,000 MW of new hydro and more than 210,000 construction jobs.
Click on the icons at right for maps showing new hydro generation potential measured in new generation added and jobs created.But today, there is no federal RPS, and one does not appear likely in the near future, NHA Executive Director Linda Church Ciocci told HydroVision attendees last week. For more on that issue, see July 25, 2013, article - U.S. Hydroelectric Power Leaders Try to Reverse the Industry's Perception Problem.
The absence of that federal RPS calls into question the projection that 60,000 MW of new hydro generation could be added to the U.S. generating fleet by 2025. In their remarks at HydroVision, Ciocci and Kurt Johnson, principal at Telluride Energy (Telluride, Colorado), referenced the study's potential to add 60,000 MW of new hydroelectric generation.
Click on the icon at right for a pie chart showing different hydro technologies that could be built by 2025 if the federal government adopted a 25% RPS.In the 25% RPS case, the NHA study projected new pumped-storage projects could add 24,000 MW of new U.S. generation by 2025. But speakers at another HydroVision panel acknowledged--and rued--the reality that no new pumped storage projects have been built in the U.S. for 17 years.
"At current natural gas prices, where electricity can be generated for about 3.5 cents per kilowatt-hour, a lot of this [potential hydro] won't happen," Johnson said. Power development "is all about getting the price right, and given current economic and regulatory conditions, it's harder to get the price right" for new hydroelectric generation.
Speakers at HydroVision criticized the federal hydropower licensing process, the absence of a federal RPS, state RPS rules that disadvantage hydro, and the exclusion of hydropower from eligibility for federal tax credits, notably the Production Tax Credit (PTC), which has helped the wind energy industry dramatically expand the fleet of turbines across the U.S.
"Hydro needs a level playing field," Alan Krause, chairman and chief executive at MWH Global (Broomfield, Colorado), told about 1,500 attendees at HydroVision's keynote session. "It is wrong that hydro is not part of the discussion of renewable energy. Regulators and lawmakers should be technology-neutral, but they have been picking winners and losers. States should reverse RPS rules that work against hydroelectric generation. Hydro's value--as a clean, low-cost, reliable, fast-ramping resource and energy storage asset--is not recognized in the market, and we need to change that."
"Hydro is at a crossroads today," Krause continued. "I am very bullish on hydro, but we need to channel our enthusiasm into policy activism." He urged attendees to work the NHA and other hydro trade associations to secure regulatory and legislative treatment that reflects its value to the U.S.
Registration at this year's HydroVision conference increased about 45% from last year's event--to about 2,900 from about 2,000 in 2012. Conference officials said it was the world's largest hydro event. The industry will need all that enthusiasm and more as it works to translate potential opportunities in the U.S. to new generating units.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
