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Hydropower Vision Chapter 2 Chapter 2: State of Hydropower in the United States Hydropower A New Chapter for America’s Renewable Electricity Source STATE OF HYDROPOWER 2 in the United States Photo from 65681751. Illustration by Joshua Bauer/NREL 70 2 Overview OVERVIEW Hydropower is the primary source of renewable energy generation in the United States, delivering 48% of total renewable electricity sector generation in 2015, and roughly 62% of total cumulative renewable generation over the past decade (2006-2015) [1]. The approximately 101 gigawatts1 (GW) of hydropower capacity installed as of 2014 included ~79.6 GW from hydropower gener ation2 facilities and ~21.6 GW from pumped storage hydro- power3 facilities [2]. Reliable generation and grid support services from hydropower help meet the nation’s require- ments for the electrical bulk power system, and hydro- power pro vides a long-term, renewable source of energy that is essentially free of hazardous waste and is low in carbon emissions. Hydropower also supports national energy security, as its fuel supply is largely domestic. % 48 HYDROPOWER PUMPED CAPACITY STORAGE OF TOTAL CAPACITY RENEWABLE GENERATION Hydropower is the largest renewable energy resource in the United States and has been an esta blished, reliable contributor to the nation’s supply of elec­ tricity for more than 100 years. In the early 20th century, the environmental conse- quences of hydropower were not well characterized, in part because national priorities were focused on economic development and national defense. By the latter half of the 20th century, however, there was greater awareness of the environmental impacts of dams, reservoirs, and hydropower operations. 71 2 As a result, the federal government passed Development of these potential resources laws that have led to safer and more environ- will require sustainable5 development and mentally aware operation of dams, reservoirs, opera tions practices. Future hydropower OVERVIEW and hydropower facilities throughout the must integrate environmental stewardship, nation. econo mic performance, and availability of critical water resources for production of Decades of evolution in engineering tech- clean energy. nologies, environmental mitigation and protection methods, and regulatory frame- Chapter 2, State of Hydropower in the United works provide a foundation for future States, summarizes the status of hydropower hydro power. Five primary potential resource in the United States as of year-end 2015 classes4 exist for new hydropower capacity within eight important topic areas: history, in the United States: contributions, and context; role in the grid; markets and project development economics; 1. Upgrades and optimization, i.e., opportunities for development; design, rehabilitating, expanding, upgrading, infrastructure, and technology; operations and improving efficiency, of existing and maintenance; pumped storage; and hydropower facilities; economic impact. 2. Powering non­powered dams (NPDs); These eight topic areas provide key contextual 3. Installing hydropower in existing water and technical information— including trends, conveyance infrastructure, such as opportunities, and challenges—that was used conduits and canals; in developing the Hydropower Vision and that 4. Developing hydropower projects on new is fundamental to the future concepts, growth stream ­reaches (NSD); and potential, and roadmap actions explored in 5. Increasing pumped storage hydropower Chapters 1, 3, and 4. (PSH). 1. As of 2014. 2. Hydropower as discussed in this report includes new or conventional technologies that use diverted or impounded water to create hydraulic head to power turbines, and PSH facilities in which stored water is released to generate electricity and then pumped back during periods of excess generation to replenish a reservoir. 3. Throughout this report, the term “hydropower” generally encompasses all categories of hydropower. If a distinction needs to be made, the term “hydropower generation” distinguishes other types of projects from “pumped storage hydropower,” or “PSH.” 4. This report does not address marine (wave, current, and tidal) and river hydrokinetic technologies, as marine and hydrokinetic tech- nologies are defined by Congress as separate and distinct from hydropower (Energy Policy Act of 2005. Public Law No: 109-58. 42 U.S.C. § 931 (a)(2)(D) Hydropower and 42 U.S.C. § 931 (a)(2)(E)(i) Miscellaneous Projects. https://www.congress.gov/109/plaws/publ58/PLAW- 109publ58.pdf). 5. In the Hydropower Vision, the term sustainable hydropower describes a hydropower project or interrelated projects that are sited, designed, constructed, and operated to balance social, environmental, and economic objectives at multiple geographic scales (e.g., national, regional, basin, site). 72 2 2.0 Introduction 2.0 INTRODUCTION History, Contributions, and Context grid planning and operations is expected to increase of Hydropower through improved quantification and valuation of The world’s first hydropower plant began to generate hydropower’s flexibility. In addition, small hydropower electrical energy in 1882 in Appleton, Wisconsin. The (defined in theHydropower Vision as 0.5 to <10 MW) boom years for construction of hydropower facilities— has the potential to increase deployment of distrib- from 1940 to 1970—responded to a rapidly growing uted generation resources. As variable generation economy with intense electricity demands. Hydro- increases in the foreseeable future, the use of hydro- power development has waned since the 1990s due to power’s flexibility—accounting for multiple water use rebalancing of water use priorities, market conditions, requirements—to reduce system operating cost is an deregulation in the electricity industry, and other fac- important trend. tors. As a result, the existing fleet of facilities—owned Markets and Project Economics and operated by federal, public, and private enti- Compensation for hydropower generation comes ties6—is aging. Many of these facilities, including their from two primary sources: power markets and dams and reservoirs, have multiple purposes beyond environmental markets.8 In power markets, value is water storage and hydropower generation, including derived from power production and from flexibility recreation, flood management, navigation, irrigation, to provide a wide range of power market services. municipal and industrial water supply, fish and wildlife, Increasing penetration of variable generation, how- and cooling water for thermal plants. ever, is changing how hydropower is compensated. Hydropower’s effects on the environment7 are recog- Ownership also plays a key role in determining access nized by facility owners and operators and, working to revenue streams and the investment perspective with resource and regulatory agencies, they imple- underlying how hydropower is valued. The structure ment measures to avoid, minimize, or mitigate these and operation of hydropower markets varies region- effects. Balancing the needs of society in a manner ally across the nation; some power markets are are that leads to more sustainable hydropower requires organized day-ahead type markets, while others are advanced planning that incorporates potential effects bilateral, based on longer term agreements. Improved of climate change on water availability patterns and alignment of hydropower valuation across power encompasses multi-stakeholder approaches. and environmental markets could decrease market variability and uncertainty. Electricity markets in the Role of Hydropower in the Grid United States are also influenced by the increasing Hydropower is capable of the full range of services role of Canadian hydropower. required by electricity transmission grid, including system regulation and supply/demand balance, Opportunities for Hydropower Development voltage and frequency support, stability, and black Opportunity exists to support growth of hydropower start capability. In particular, hydropower’s flexibility as an economically competitive source of low-carbon to rapidly ramp generation up and down in response renewable energy. The challenge, however, is to incor- to changes in the balance between electrical loads porate environmental performance9 and sustainability and generators facilitates integration of renewable principles, while balancing public energy needs and variable generation, such as wind and solar energy, water resources—especially in the context of multiple into the grid. The contribution of hydropower to 6. Federal agencies operate about 49% of the total installed hydropower capacity, with about 10% of the total number of installations. Public ownership, such as public utility districts and rural cooperatives, comprise about 24% of total installed U.S. capacity and 27% of the total number of hydropower facilities. Private owners, including investor-owned utilities and independent power producers, control about 25% of total installed capacity and 63% of the total number of plants. 7. Hydropower facilities can affect flow regimes, water quality, sediment transport, habitat connectivity, fish passage, and other factors. 8. Environmental markets include renewables markets, such as Renewable Portfolio Standards, and emissions markets, such as those associ- ated with trading of allowances for certain pollutants. 9. Environmental performance refers to hydropower's effects on ecosystem structures, processes, and functions. 73 2 objectives for water use. Toward this end, improved Refinement of O&M methods can support hydro- communication
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