The introduction of the renewables portfolio standards in certain US states could encourage the development of small hydro, suggests Neil Ford

While few new large scale dam projects are likely to be constructed in the US, the introduction of renewables portfolio standards (RPS) by an increasing number of US states could encourage the development of small hydro projects. As in other countries around the world, electricity suppliers in the RPS states are required to source a minimum amount of electricity from renewable sources, including hydro, in order to increase the amount of renewable energy in the generation mix.

Unlike most other countries that have adopted renewable energy targets or trading systems, a wide range of targets apply across the 19 US states that have introduced RPS to date. While Washington has consistently refused to ratify the Kyoto Protocol or to set nationwide targets, some state governments have taken a harder line on tackling greenhouse gas emissions and are therefore trying to encourage increased electricity production by renewable energy projects.

Other state governments are worried that the US is becoming overly reliant on oil and gas imports and so are promoting renewable energy projects in an effort to improve energy security. Natural and processed gas has increased its share of the generation mix to 21% and this figure is expected to continue rising. Unexpected power cuts in August 2003 in much of the north-east of the country have concentrated minds and the issue of energy security has begun to encompass the generation mix as well as oil supplies.

RPS requires all electricity suppliers at the retail level to source a certain percentage of their needs from renewable energy projects. The percentage concerned and the forms of electricity generation that qualify vary from state to state, while some states have set targets for the amount of new generating capacity to be provided by new projects. A utility hoping to construct a gas fired plant may also have to invest in a wind farm, for example, if it is to proceed with development.

Hydro schemes currently account for around 7% of US generating capacity, while other forms of renewable energy production provide just 1%. As Table 1 demonstrates, most existing hydro projects are located in New York State in the east and the western states of California, Oregon and Washington. Although wind power is likely to make the biggest contribution towards meeting RPS targets, small hydro can play a vital role.

Some states have set up RPS trading systems so that suppliers that do not purchase the required proportion of renewable electricity are able to buy renewable energy credits or certificates. Other suppliers that source more than the mandated proportion of their needs from renewable schemes are therefore able to make money by selling credits. It is hoped that trade in credits will act as an incentive for new renewable energy schemes. Again, the penalties for non-compliance vary greatly from state to state, although the penalty regimes in many states appear weak and enforcement has not yet been organised.

Hydro as renewable energy

Arizona has set one of the most modest range of targets, with 0.2% of electricity required to come from renewable sources by 2001, rising year on year to 1.1% by 2007. However, each state government must work within the framework of its existing energy sector and some states had very little renewable energy production prior to 2001. Colorado has been more ambitious, aiming at 6% by 2011 and 10% by 2015, while Nevada has set a 9% target by 2007 and 15% goal by 2013. The government of Hawaii is planning for a massive increase in renewable energy capacity: 7% of net electricity sold had to come from renewable energy sources by the end of 2003; 8% by the end of this year; 10% by 2010; 15% by 2015 and 20% by 2020.

Current hydro power schemes have combined generating capacity of 80,000MW from 180 federal and around 2000 other schemes across the country. This makes the US one of the world’s biggest producers of hydroelectricity, although the sector accounts for just a small proportion of total US capacity. At present rates of project development, however, the hydroelectric sector is expected to account for a decreasing share of the generation mix over the decade to come and current federal government estimates are based on almost no new hydro schemes being developed up to 2020.

However, the Department of Energy has identified 5677 sites across 49 states with undeveloped hydroelectric potential. If all were developed, they could add 30,000MW to national generating capacity. Any proposals for new large dams would almost certainly face widespread local opposition but there are many potential sites for small hydro schemes. To date, about 3000 MW of hydro capacity in the US is classified as small hydro and an additional 40MW is under construction. A total of 89% of the country’s existing dams generate less than 30MW each but account for just 8% of national generating capacity between them. The department of energy’s hydro power team is currently focusing its attentions on investigating low head, low power technology, which requires water depths of less than 10m and provides generating capacity of less than 1MW.

As elsewhere in the world, the big question centres on whether hydro schemes can be listed as a source of renewable energy. In relying on water flows and rainfall, hydroelectricity is by definition a renewable source of energy but the renewables sector is generally considered to include only environmentally friendly forms of electricity production. The impact of dams on local flora and fauna, the need to relocate people and property and the practice of flooding valleys are all cited by opponents as reasons not to include hydro power in RPS classifications.

However, again as elsewhere in the world, most US states have drawn a clear line between large and small hydro projects – and small schemes, generally those with generating capacity of 30MW or less, are regarded as renewable sources of energy by most states. However, Arizona and Massachusetts do not include any form of hydro under their definition of renewable energy, while Wisconsin allows hydro plants up to 60MW and Maine up to 100MW. Such divisions can be blunt tools, as some larger projects can have less environmental impact than individual small hydro ventures, so surely each case should be considered on its merits.

Some small dams fail to return water to the river flow, while some larger projects have put a great deal of effort into mitigating the negative impact of dams.

Low impact hydro

As a result, a more sophisticated approach is required and other certification schemes have been developed on a local or regional basis in order to encourage the development of hydroelectric projects. In an effort to persuade local people of the benefits of hydro power in general, and small hydro in particular, the concept of low impact hydro power is being actively promoted in the US, particularly by the Low Impact Hydropower Institute (LIHI), a non-governmental organisation (NGO) that is ‘dedicated to reducing the impacts of hydro power generation through the certification of environmentally responsible, ‘low impact’ hydro power’.

The Institute assesses proposed hydro schemes and awards them low impact certification if they comply with a series of ‘environmentally rigorous, low impact criteria addressing river flows, water quality, fish passage and protection, watershed health, endangered species protection, cultural resources, recreation use and access, and whether or not the dam itself has been recommended for removal’. Before certificates are awarded, hydro schemes must be assessed by independent technical consultants and the relevant state and federal agencies must be consulted.

The executive director of LIHI, Fred Ayer, said: ‘Over the last decade it has become very clear that installed capacity is a poor indicator of the environmental impacts of a hydro power project. Small facilities that de-water river reaches and block fish passage may be more environmentally destructive than larger facilities designed and operated to reduce environmental impacts.’

Ayer continued: ‘That’s why we believe the only way to know whether hydroelectric facilities are environmentally appropriate for inclusion in an RPS is to evaluate each project from a resource based perspective in its site specific river context. That is why we established a Low Impact Hydropower Certification Program to certify hydro power facilities with impacts that are low compared to other hydro power facilities based on objective environmental criteria. We believe that a resource based approach is the most effective and time tested credible means of identifying which hydropower projects minimise environmental impacts and should be considered an RPS eligible renewable.’

As a result, the most recent hydro scheme to receive LIHI certification was the 80MW Summersville hydroelectric project in West Virginia, which is owned and operated by Gauley River Partners. Although such generating capacity would be regarded as too large to qualify for renewable status by many groups, the project meets the LIHI criteria and is effectively a run-of-river project, which can only generate electricity when the US Army Corps of Engineers releases water from its Summersville dam upstream.

Brascan Power New York secured certification from the LIHI for 16 of its projects on the Raquette and Hoosic rivers in New York State. The schemes in question range from the 2MW Norwood project up to the 30MW Colton plant. The projects are expected to account for a large proportion of New York State’s new renewable energy capacity. The Vice President of Brascan’s New York operations, David Youlen, commented: ‘We retain the distinction of being the only hydro power producer in New York State to receive this prestigious certification, and are well positioned to help the state achieve the goal of 25% renewable energy supply within ten years.’ The company operates 71 hydro schemes in the state, 24 of which have LIHI certification and it is expected that certification will encourage more states to judge some hydro schemes as RPS compliant.

Retail electricity tariffs have increased over the past five years, making many forms of renewable energy more economically competitive. Moreover, by guaranteeing a minimum market for renewable energy, it is hoped that increased investment in research and development in the sector will reduce costs and eventually make renewable energy projects commercially viable in direct competition with other forms of electricity generation. Accurate assessment of the real environmental impact of dam projects could enable small hydro to share in the growing renewables sector in the US.


Table 1