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Wind and solar energy are the fastest growing sources of U.S. power generation; yet, as intermittent resources, they require back-up from highly dispatchable generation – such as hydropower and pumped storage – to provide firm electricity supplies.
Changes in the United States’ total generation mix, and the decline of fossil-fuel based thermal generation, highlight the need for new sources of dispatchable power.
Nearly 70% of US total generation was fossil-fuel based in 2000, and in 2023, the number fell to 60%. Simultaneously, renewable energy production rose from 9% in 2020 to 21% in 2023. Now, more than ever, hydropower and pumped storage hydro have a vital role to play in maintaining grid reliability.
By 2035, 459 hydropower facilities will become eligible for relicensing. Since the process can often require more than 7-8 years and cost millions of dollars, 36.4% of asset owners are actively considering decommissioning rather than pursuing relicensing.
Pumped storage hydro delivers 96% of current U.S. electricity storage capacity; hydropower provides 6% of all US electricity generation. If we lose these existing valuable clean energy resources, both grid reliability and grid resilience are in jeopardy.
TVA’s Racoon Mountain Pumped Storage Plant
WHY HYDRO’S RELIABILITY BENEFITS MATTER
After nearly two decades with little to no electricity load growth due to significant strides in energy efficiency, the United States is now entering a new era of artificial intelligence (AI), electric vehicles (EVs), and overall electrification. A Princeton University study estimates that electricity demand in the U.S. will be 24% higher in 2030 than a decade earlier. The consulting firm McKinsey & Co. predicts electricity demand tripling by 2050, and ERCOT projects a load increase in Texas the size of Germany’s entire electricity consumption by 2030.
The rising load growth converges with the changing power generation mix. System operators need firm baseload generation to provide the ancillary services that variable resources cannot deliver. For example, hydropower provides 40% of current ‘black start’ capability, i.e., jumpstarting the electric grid following a major outage or blackout. Power system engineers require this capability to maintain overall system performance. A projected rise in electricity demand further underscores the need for ancillary service benefits.
With nearly half of the non-federal fleet’s licenses expiring by 2035, 17 GW of energy is at risk – enough to power 30 million US homes and businesses. The hydropower permitting process must be streamlined to keep these critical sources of flexible, dispatchable, baseload energy online.
National Hydropower Association (NHA) is encouraging stakeholder support of two Congressional bills:
- 1521, the Community and Hydropower Improvement Act and HR 4045, the Hydropower Clean Energy Future Act, which expedite the relicensing process to protect existing hydropower assets.
- NHA is also advocating passage of S. 2994 and HR 6653 ‘Maintaining and Enhancing Hydroelectricity and River Restoration Act of 2023’, which create a 30% investment tax credit to encourage environmental improvements and dam safety upgrades at existing hydropower facilities.
This legislation will equip asset owners with financial tools and regulatory processes that will preserve the hydropower industry and our nation’s electric grid. NHA is actively involved now in discussions with House and Senate leadership to pass this legislation prior to adjournment.
A group of water power industry members pose for a photo during NHA’s Advocacy Day
HOW NHA IS HELPING
NHA’s 2024 external strategy is to raise the visibility of hydropower while elevating its role as a vital contributor to grid reliability and resilience.
It is a critically important time to address resource adequacy challenges in the energy sector. NHA’s outreach beyond the industry is well underway with a particular emphasis on the national associations of state-based institutions and non-hydro energy stakeholders, who may be unaware of hydro’s value.
Consistent with NHA’s strategy, Malcolm Woolf, President and CEO of NHA, presented NHA’s 2024 outlook at the National Association of State Energy Officials (NASEO) Energy Policy Outlook Conference where the NASEO President publicly applauded his leadership as their former Board Chair.
Malcolm Woolf, CEO and President of NHA, addresses the audience at NASEO.
