Thursday, December 9, 2010
Approaches to Boost Hydroelectric Capacity in North America
By Ucilia Wang
In the U.S., a national focus on boosting renewable electricity generation has created a flood of project financing and research work.
One example is Alcoa, which has nearly 3,000 MW of capacity to provide for the needs of its smelting and refining system, as well as regional wholesale markets. Among its facilities is 122-MW Cheoah in North Carolina, which was poised to undergo a retrofit when the federal government passed the 2009 American Recovery and Reinvestment Act (ARRA). In August 2010, Alcoa resumed construction on the $120 million modernization after securing $12.9 million from the U.S. Department of Energy (DOE).1
Work on this project began in mid-2008 but stalled. "The economic crisis hit us hard, and we had to put it on hold," says Bill Bunker, vice president of hydropower at Alcoa Power Generating. "Thanks to the DOE money, we are back on."
Other companies have benefited from the government largesse, including Voith Hydro, supplier of the turbine-generators for Cheoah. In addition, the company is supplying the equipment needed to more than double the capacity of PPL's 108-MW Holtwood project in Pennsylvania.2 This $434 million expansion will increase plant capacity by 125 MW and improve fish passage along the Susquehanna River, said PPL. The company postponed and then restarted the project to take advantage of the ARRA programs to award tax credits and grants for renewable energy projects.
The government's interest in promoting renewable energy also creates new technology development initiatives. In March 2010, DOE, the U.S. Department of Interior, and the U.S. Army Corps of Engineers signed a memorandum of understanding to collaborate on technologies that will increase hydroelectric generation while minimizing environmental impacts.
But the hydropower industry hasn't received nearly as much funding as other renewable technologies, notably wind and solar. Industry groups such as EPRI and the National Hydropower Association (NHA) have stepped up efforts to remind lawmakers that hydropower is a clean source of electricity worth more public investments.
In fact, untapped potential for hydropower generation in the U.S. could lead to nearly 14,000 MW added to the electricity supply by 2025, says Doug Dixon, a technical executive with EPRI. The country currently has about 75,000 MW of hydro capacity, he added. Both figures don't account for pumped storage.
NHA points to Navigant Consulting's report that estimates an added capacity of 11,250 MW to 19,900 MW during the same period, depending on whether a national mandate for renewable energy consumption exists.3
Dixon points out that the federal government has beefed up the annual budget for DOE's water power program in recent years. Funding was zero from 2005 to 2007, he says. In fiscal year 2008, $10 million materialized for the budget, which grew to $40 million in 2009 and $50 million in 2010.
"The fact is that hydro is renewable," says Bunker with Alcoa. "It's green power going into the grid. Legislators are starting to realize that."...
Canadian development spurred by feed-in tariff
In Canada, the majority of the hydroelectric development involves new greenfield projects. Developers in this country may be able to take advantage of a feed-in tariff, which offers unique incentives for hydro and other renewable electricity. Many say a feed-in tariff is one of the best ways to supercharge clean power development.
For example, Ontario's feed-in tariff policy, enacted in September 2009 as part of the Green Energy Act, sets premium prices for renewable electricity.1 This tariff has created a flood of proposed projects, notes Kaz Borovszky, business development manager for power generation at ABB. ABB provides power and automation technologies to many industries, including hydro.
Since the tariff was enacted, the government has approved 42 small hydro projects (10 MW or less), Borovszky says. Under the new tariff, hydro producers are paid 13.1 cents per kilowatt-hour for up to 10 MW and 12.2 cents for 10 to 50 MW. The cap on project size is meant to encourage eco-friendly development that doesn't involve a large reservoir or dam. Read more here.