As the world shifts towards cleaner energy solutions, the spotlight often falls on technologies like solar power. However, amidst this transition, there remains an overlooked potential in hydropower investments, according to a recent report.
Despite its proven reliability and capacity to provide 96% of the nation's utility-scale energy storage, hydropower is often dismissed as fully capitalized. Contrary to this perception, the report highlights significant untapped potential, especially in smaller projects producing up to 30MW of power.
The US boasts over 90,000 dams, yet less than 3% of them are utilized for power generation. Moreover, thousands of non-powered dams offer ripe opportunities for investment, while existing facilities can be upgraded to enhance capacity. Additionally, millions of miles of waterways, including rivers and canals, remain untapped for in-stream hydropower projects.
With the passage of the Bipartisan Infrastructure Law and the Inflation Reduction Act, financial support for clean energy projects, including hydropower and pumped storage hydropower (PSH), has become more accessible. PSH, with its ability to store energy for extended periods compared to batteries, is gaining traction as a crucial asset in balancing the increasingly variable renewable energy supply.
Globally, hydropower ranks as the third-largest source of electricity, following coal and natural gas. Its role in providing firm power becomes even more crucial as nations pivot away from fossil fuels. The report underscores hydropower's synergy with other renewable sources and emphasizes the growing value of its reliability and flexibility.
The report, titled "Hydropower Investment Landscape," conducted by the National Renewable Energy Laboratory (NREL) and funded by the US Department of Energy’s Water Power Technologies Office (WPTO), outlines several key findings:
Medium-Sized projects offer significant opportunities: The pipeline for medium-sized projects, with a capacity exceeding 1GW, includes a variety of development options such as capacity additions, non-powered dam retrofits, and hybrid projects combining multiple renewable technologies.
Innovative technologies present opportunities: Modular conduit hydropower, non-powered dam resources, hybrid plant configurations, and closed-loop PSH systems represent avenues for future investment and development.
Investor interest is prominent: Various investor types, including project developers, utilities, venture capital funds, institutional investors, and commercial banks, show interest in different aspects of hydropower projects. Factors such as stable cash flow, scalable technologies, and reduced risk contribute to their investment decisions.
Addressing the challenges associated with hydropower projects, including financing, permitting, and supply chain constraints, is crucial for unlocking investment potential. The report recommends governmental support in financing and early-stage development, improved market incentives, streamlined permitting processes, and continued research into reducing deployment costs.
The WPTO, alongside other federal agencies, is pivotal in advancing the hydropower sector through initiatives supporting research, development, and funding opportunities. By collaborating across various departments, the WPTO aims to raise awareness and facilitate investments in hydropower for a sustainable energy future.
For more detailed insights, view the full "Hydropower Investment Landscape" report.
