Exhibitors at HydroVision International Chase Refurbishing, Greenfield Projects

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Most suppliers of hydropower equipment and services interviewed last week at the annual HydroVision International conference and exhibition in Denver were chasing rebuilding and refurbishing work, though some had landed greenfield new-build hydro projects.

"Our new-build hydro business has been going strong for about five years," said a representative of Mountain States Hydro LLC (Sunnyside, Washington). "Most of our work is in Colorado, but we are building a hydro project in Washington," he said at a booth-side interview. "For the last few years, every time we get about 75% done with one project, we get an order for another project." Most of these projects are between five and 20 megawatts (MW), the representative said.

Another exhibitor with no complaints is Schneider Electric SE (Rueil-Malmaison, France). A company representative told Industrial Info their federal hydro business was "going great," though she cautioned that her remarks only applied to federal hydro projects owned by the U.S. Bureau of Reclamation and Army Corps of Engineers.

Ames Construction Incorporated (Burnsville, Minnesota) also is having an up year. The general contractor won one hydro construction job and is in the hunt for a huge water-storage project in Lake Isabella, California. "Business is up a bit compared to 2016," a company official said. "If we win the work at Lake Isabella, it will be up a lot."

Aiming to increase its share of the hydro controls market, Emerson Electric Company (NYSE:EMR) (St. Louis, Missouri) plans to release a new scalable controls product later this summer. The company's booth representatives were mum on the details except to say the new controls product reflected market conditions.

A U.S.-based representative of Andritz Hydro GmbH (Vienna, Austria) estimated that there were billions of dollars of hydro rehabilitation work in the U.S. that could be awarded over the next few years.

Kleinschmidt Associates, a provider of engineering and regulatory services to the hydro industry, is having a flat year compared with 2016, a company representative said on the exhibit floor. But over the next two to three years, the official predicted that the regulatory and engineering sides of the house would expand their respective business.

Black & Veatch (Overland Park, Kansas) told Industrial Info that business was good and the firm was trying to hire new people in its hydro practice area.

Things were a bit more muddled for the hydro business at General Electric Company (NYSE:GE) (Boston, Massachusetts). Owing to tough negotiations with regulators, GE's acquisition of the power business of Alstom SA (Saint-Ouen, France) took months to close. The delay in closing that acquisition, coupled with turbulence at the top of GE, where longtime Chief Executive Officer Jeff Immelt recently announced his retirement, means GE has not yet grown its presence in the hydro market, a company representative said in a booth-side interview. Years earlier, Alstom acquired ABB, so the combination of GE and Alstom could make for a juggernaut in the power business. A representative of Voith Hydro Incorporated (York, Pennsylvania) said business was down in the single digits compared with 2016. He blamed flat U.S. electric demand, low gas prices and regulatory uncertainty, particular over relicensing new facilities or licensing new ones. Most of the work Voith was pursuing was rehabilitation of existing hydro facilities.

Other exhibitors at HydroVision blamed low gas prices for the sluggish state of their business. "Hydro can't pencil out against $2 per Mcf gas," commented a representative of AECOM (NYSE:ACM) (Los Angeles, California). His assessment was echoed by several other exhibitors and attendees at HydroVision, which drew more than 3,000 attendees and more than 500 exhibitors.

Between low gas prices, flat electric demand, falling electric prices, the absence of federal tax credits like those enjoyed by windpower and solar developers, and a tortuous licensing process for new projects, as well as existing projects seeking to extend their licenses, exhibitors agreed that the current hydro market was not for the faint of heart. Patience, quality and relationships are the three pillars for success in the hydro business.

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