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Small Hydro Has Strong Bipartisan Support. So Why Can’t We Get Our Act Together?

By Stephen Lacey  

"Small Hydro Has Strong Bipartisan Support. So Why Can’t We Get Our Act Together?"

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Most people don’t realize that we have a lot of hydropower potential left in this country — particularly small hydro.

Amidst all the talk about increasing offshore drilling in the arctic, permitting massive renewable energy projects in remote areas, and building out expensive transmission lines around the country, we often forget about the simple things.

A few years back, I wrote an article asking if the U.S. was on the verge of a small hydropower boom. I’m sad to say that despite the myriad compelling reasons for developing small hydro projects around this country, we’re still in the same place we were when I wrote that story.

Why? Because we have a terrible regulatory framework in place.

A 2006 study put together by the Idaho National Laboratory found that we could feasibly develop up to 30,000 MW of small and “low-power” hydro projects (between 10 kilowatts and 30 megawatts) around the country. All of those projects could be run-of-river — meaning they don’t require any damming — or could be built on existing dams.

There are over 81,000 dams around the U.S. and only 2,400 of them have any electrical generating capacity. Many of the power-less 78,600 dams are close to existing infrastructure, making it easier to build and maintain a project compared with a centralized wind or solar farm located far away from where the electricity is used.

So while the government has focused heavily on streamlined permitting for centralized, large-scale renewable energy projects, almost nothing has been done for small hydro.

Due to regulatory morass, the U.S. is not a good place for small hydro companies to do business. In order to build even the smallest facilities, a developer must go through the Federal Energy Regulatory Commission, U.S. Fish and Wildlife Service, Army Corps of Engineers, State Environmental Departments, State Historic Preservation Departments, and many more. Each of these agencies is just doing their job — but the cumulative impact weighs down small hydro and makes projects prohibitively expensive.

“The regulatory environment is not friendly at all. It’s incredibly difficult and expensive to build these facilities,” explains Lori Barg, CEO of Community Hydro, a developer based in Vermont. “It’s absurd, really.”

Barg says that federal and state permitting can add up to $2,000 per kilowatt for projects under 1 MW. To put that in perspective: solar PV projects around 1 MW are being built today for about $3,000 a kW, including permitting, labor and equipment.

That needs to change. It’s an embarrassment that we still haven’t fixed this problem.

A bill introduced by Republican Congressman Adrian Smith is a great start. The Small-Scale Hydropower Enhancement Act, which passed quietly out of the House Natural Resources Committee at the beginning of this month, will exempt all projects smaller than 1.5 MW on non-federally owned conduits from FERC licensing requirements.

“This is a great targeted solution for a particular set of hydropower projects that could spark a tremendous increase in facilities under 1 MW,” explains Jeff Leahey, director of government affairs for the National Hydropower Association. “If you can take those out of the FERC process and put those at the states, it will significantly reduce costs.”

Consistent with the slow-moving process for small hydro, the bill now needs pass through two more committees — the House Energy and Commerce Committee and the Transportation and Infrastructure Committee.

On the Senate side, Alaska Republican Lisa Murkowski recently re-introduced the Hydropower Improvement Act that would streamline permitting of hydro projects on existing dams and create a competitive grant program for developers. It also expands R&D for new hydro technologies.

NHA hopes to find a way to combine both bills and pass something with bi-partisan support this year.

“We keep telling lawmakers that there’s tremendous growth potential in the industry. We are far from tapped out. We can access existing infrastructure today and build tens of thousands of megawatts in communities around the country. We consider that low-hanging fruit,” explains Leahey.

Harnessing the full potential of small-scale, local hydropower could actually be pretty easy – all possible without having to deploy massive clean-up efforts, making environmental major trade-offs, or facing stiff local opposition. But we have to get our act together on permitting.

Considering all the other major problems Congress is dealing with, this should be a very easy fix.

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