Tax credits could be granted to US hydropower owners who uprate their power plants, under a renewable energy incentive package put to the US Senate.
The Renewable Energy Development Incentives Act, introduced by senator Harry Reid (Democrat, Nevada) aims to extend and expand the federal production tax credit to new forms of renewable energy. For the first time, the credit would be extended to uprating – described as ‘incremental’ hydro power in the US – gained by increasing efficiency and adding extra capacity. Reid’s legislation would make the new credits a permanent part of the tax code.
The national-hydropower-association estimates that up to 4000MW could be gained by uprating hydro plants in this way and the Association commended Reid on the initiative: "Senator Reid’s legislation not only recognises that hydropower is unquestionably a renewable resource, but that developing additional hydropower at capacity at existing projects is an idea everyone can get behind," said NHA executive director Linda Church Ciocci.
If adopted, Reid’s bill would mark a significant step forward in the hydropower industry’s fight to be recognised as providing renewable energy. David Tuft of NHA pointed out that while the proposal would probably be one of many put forward to encourage renewables, it was significant that it had come from a Democrat – the party has previously been reluctant to include hydropower of any size within renewables legislation. He said the NHA was hoping that Republican proposals may be still more positive, for example encouraging owners of existing dams to install hydropower facilities where they do not already exist..
While welcoming the new bill, however, Church Ciocci said that although uprating could bring new capacity on line, the USA’s cumbersome licensing process may make it difficult to make practical use of the opportunity. Introducing ‘incremental hydro’ would likely require a complete renewal of a facility’s licence, rather than a simple amend, with all interested parties able to make representations.
Church Ciocci noted that slow progress on relicensing dams and hydropower that have reached the end of their operating licence was already currently placing some 1200MW of hydropower in jeopardy, and the same slow process could make further hydro development impossible. "The hope of bringing new hydro power on line could easily be washed away by the costly and cumbersome licensing process," she said. "While incentives are an excellent first step towards greater reliance on hydropower, there will be little progress until we make fundamental changes to the badly damaged licensing process."