Hydropower Potential

Facts ׀ Benefits ׀ Growth Political Landscape ׀ Priorities

2

Hydro Myths“The country’s

hydro resources are tapped out.”

“Hydropower development

and river stewardship are

not compatible.”

“U.S. hydro plants are all huge.”

“Hydro is not cost-

effective.”“Hydropower is only available in

a few places, like the

Northwest.”

The Facts

33

4

65.9%13.1%

3.7%

0.2%

17.1%Conventional Hydro

Biomass

Geothermal

Solar

Wind

Availability

Hydropower is the largest source of

renewable electricity generation in the U.S.

and made up 7% of overall power

generation in 2009.

Source: EIA

Hydropower accounted for 65.9 % of all

renewable power generated in the

U.S. last year.

U.S. Renewable Power Generation, 2009

Availability

Hydropower is generated in every region and benefits every state, employing up to 300,000 workers around the U.S.

Top-ten hydropower generating states:•Washington•Oregon•New York•California•Alabama•Idaho•Tennessee•Montana•Arizona•North Carolina

5

Size (Capacity) Distribution of Currently Operating Units

Only 3% of U.S. dams generate electricity – there is significant room for growth without building new infrastructure.

6

80,000 Dams Across the U.S.

pre 1900Build Time

1900 - 19291930 - 19391940 - 19491950 - 19691970 - 19891990 - 2008

19th Century HydropowerEarly 20th Century HydropowerDepression Era HydropowerWWII Hydropower ConstructionPost-War Hydropower Development

Late 20th Century Hydropower DevelopmentHydropower Development since 1990The U. S. Hydropower Fleet

Existing & Potential Hydropower

Source: ORNL

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8

Hydropower Potential

New Capacity ׀ Job Creation

9

Growth . . . Without New Dams

Using new technologies and maximizing existing infrastructure, we can significantly expand hydropower capacity without building new dams.

Modernizing existing facilities

Converting Non-Powered Dams

Marine and Hydrokinetic

Technologies

Conduit Technology

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Future availability

Hydro Capacity Growth by Technology

Source: Navigant Consulting

Efficiency improve-

ment8,900MW

Non-powered dams

10,000MW

Greenfield sites

1,000 MW

Hydrokinetics 2,000MW

Ocean cur-rent 750MW

Pumped storage

24,000MW

Wave 9,000MW

Tidal 4,000MW

With the right policies in place, the U.S. could add 60,000 MW of new hydro capacity by 2025, the vast majority of which can be created without adding new dams.

11

DOE/ORNL: Major Growth Opportunity

12

1.4 Million Potential Jobs by 2025

285,31176,161

49,450

29,490 8,339

WestNortheast Southeast Midwest

Direct Jobs

135,38682,994

20,423

20,120 4,119

WestNortheast Southeast MidwestSouthwest

Indirect Jobs

Cumulative Job Creation by 2025 under a 25% RES

Job Creation Opportunities in Hydropower, Navigant Consulting, 2009

13

Hydropower Benefits

Affordable ׀ Reliable ׀ Sustainable

14

Clean and Sustainable

The hydropower industry is committed to better understanding and mitigating the impacts dams can have on local ecosystems and fish, with hundreds of millions of dollars invested each year in environmental enhancements at hydro facilities.

Using hydropower avoided approximately 196 million metric tons of U.S. carbon pollution in 2009 – equal to emissions from approximately 38 million cars.

Non-Powered Dam Potential With Other Renewables

Non-powered dam potential exists in areas with less than ideal wind and solar resources

Source,Wind & Solar Maps: NREL

15

16

Grid Reliability

Hydropower is a flexible and reliable electricity source. Hydropower’s ability to dispatch power immediately makes it an essential back-up during major electricity disruptions.

Grid support services include . . . Frequency Control ׀ Regulation ׀ Load Following ׀ Spinning Reserve ׀ Supplemental Reserve

“[During the blackout,] one relatively large island remained in operation serving about 5,700 MW of demand, mostly in western New York, anchored by the Niagara and St. Lawrence hydro plants.”— US-Canada Power System Outage Task Force report, 2005

17

Energy Storage: Affordable & At Scale

Hydropower pumped storage is one of the few large-scale, affordable means of storing and deploying electricity.

Absorbs excess generation at times of low demand, and releases it during peak demand periods.

An excellent partner for intermittent renewable electricity sources.

The U.S. has more than 20GW of

pumped storage capacity today, with

facilities in every region of the country.

Developers have proposed an

additional 31GW.

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The National LandscapeBipartisan ׀ Regionally Diverse

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Bipartisan Support

• Hydropower has multi-region and bipartisan support

• Hydropower Improvement Act of 2011 – co-sponsors include Sens. Murkowski (R-AK) and Bingaman (D-NM) and 7 other Senators, Republicans and Democrats

• Incentives for hydropower and marine and hydrokinetic technologies championed by both parties

• Consensus in the 111th Congress for inclusion of hydropower in various policies

20

Bipartisan Support

“Hydropower is one of our greatest untapped resources for generating

clean, renewable electricity.” - Senate Energy and Natural

Resources Committee Ranking Member Lisa

Murkowski (R-AK)

“In today’s environment – where talk centers on the need to provide clean and environmentally friendly energy – we must continue to promote and expand the use of hydropower.” – House Natural Resources Committee Chairman Doc Hastings (R-WA)

“There’s no one solution to the energy crisis, but hydropower is clearly part of the solution and represents a major opportunity to create more clean energy jobs.” – Energy Secretary Steven Chu

“With thousands of existing dams currently not creating any power, existing dams in need of upgrades, and new technologies being developed to safely capture river currents, an additional 60,000 more megawatts is achievable within the next 15 years.” – House Natural Resources Committee Ranking Member Ed Markey (D-MA)

21

Projects Across the U.S.Hydropower projects are underway around the

country, bringing new jobs and low-cost electricity to many states.

22

Projects Waiting in LineApplications/Exemptions Filed: 37 projects, 3000+ MW, 23

states

Preliminary Permits Issued: 394 projects, 48,000+ MW, 47 states

Preliminary Permits Pending: 355 projects, 37,000+ MW, 29 states

Total FERC Pipeline: 88,000+ MW

23

Hydropower Priorities

Regulatory ׀ Tax Energy Standard ׀ R&D

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Overview

NHA supports a CES goal of generating 80% of America’s electricity from clean and renewable energy – a goal achievable only with a significant role for hydropower.

Research and development

A more efficient regulatory process

Economic incentives to support project development

A national clean and renewable electricity standard

What it will take:

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Regulatory Process

HydroRegulatory

Process

Hydropower development involves

a comprehensive but sometimes

redundant regulatory approval process that needs better coordination

and cooperation between participants.

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Regulatory Process

Making the regulatory process more efficient includes:

Facilitating private hydropower development on Army Corps of Engineers and Bureau of Reclamation Facilities

An expedited licensing process for hydropower development at non-powered dams and closed loop pumped storage projects, that takes no more than two years.

27

Regulatory Process

Improvements can be made to the regulatory process that speed both the deployment as well as the environmental enhancements and benefits of hydro projects.

Support for small hydro and conduit power developers, so that the regulatory process provides assistance and is not a disincentive to project development.

28

Incentives

Straightforward updates to existing renewable energy tax credit programs should be enacted:

Equalizing the production tax credit for hydropower.  Currently hydropower receives only half the credit available to other renewable energy sources.

Allowing energy storage, specifically pumped hydro storage, to qualify for the ITC and CREBs (Clean Renewable Energy Bonds) Program. Expanding our nation’s energy storage capacity is essential to ensuring a secure and stable grid as well as integrating more renewable energy.

29

Incentives

Long term extension of existing programs such as the PTC and ITC is needed, along with additional funding for oversubscribed programs such as CREBs and the 48C ITC for renewable energy equipment manufacturers.

NHA strongly supports existing renewable incentives:

Hydropower project development can have high upfront costs and long lead times. Though cost-effective over the life of the project, utilities, developers and investors need certainty with the incentives.

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A Clean and Renewable Electricity Standard

The Clean Energy Standard is a different policy paradigm than the Renewable Energy Standard. As such, the treatment and recognition of hydropower must be re-evaluated. Two examples:

Energy storage, specifically pumped hydro storage, will play a critical role to firm and integrate intermittent resources and increase their contribution to the CES goal. The CES should include a mechanism to provide recognition of clean generation from pumped storage projects – both existing and new.

Existing hydropower generation should be counted if generation from other clean resources qualifies (wind, nuclear, etc.) Hydropower should be treated equitably in comparison to other existing resources.

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Research and Development

As the Congress debates budget priorities, funding for hydropower R&D is imperative.

Congress must continue to invest, not retreat, on R&D funding for the next generation of hydropower and MHK technologies to achieve the country’s vision for clean energy deployment.

President Obama’s proposed FY 2012 budget increases DOE spending for all types of renewable energy with the exception of the Water Power program, with a proposed budget reduction of over 20%.

Contacts

Linda Church Ciocci, Executive Director,National Hydropower Associationlinda@hydro.orgPh. 202.682.1700

Ryan Cunningham, Senior Vice President, Glover Park Grouprcunningham@gpgdc.comph. 202.295.0164

Roger Ballentine, President, Green Strategiesroger@greenstrategies.comph. 202.328.1123

www.hydro.org