March 29, 2010

The U.S. Department of Energy (DOE), Department of the Interior (DOI) through the Bureau of Reclamation (Reclamation), and Department of the Army (DOA) through the U.S. Army Corps of Engineers (USACE), announced on March 24, 2010 the signing of a Memorandum of Understanding (MOU) between the federal agencies to promote the development of hydropower.  Pursuant to the MOU, studies will be conducted over the next few years that may help industry determine which Federal dams and reservoirs would be best suited for non-Federal hydropower development.  The process will hopefully determine which sites will have the fewest roadblocks from stakeholders, including the federal dam owners themselves.  These studies may also lead to a determination of which projects can be most efficiently integrated into the grid. 

Under the MOU, the agencies will work together to identify federal facilities and United States- controlled lands that are well-suited for sustainable hydropower development.  The agencies will promote increasing generation, including pumped storage,  at existing facilities and dams, and the agencies will work together to study the effects of adding capacity to unpowered federal dams or constructed waterways.  The MOU states that the agencies shall also prioritize and balance the environmental impacts of any new power facilities at such existing dams.  The MOU also commits the agencies to help facilitate federal authorizations to build new electric generation facilities at existing sites.  In addition, the agencies will share information on renewable energy research and development, including hydropower.  The MOU also notes that hydropower may be developed to help integrate other renewable energy into the grid. 

The USACE and DOI are the two largest hydropower dam owners in the United States, and their combined hydro generation facilities represent about half of the country’s hydropower capacity — approximately 34,000 megawatts.  Thus, the synergy in collaborating on hydropower with DOE seems logical.  However, the MOU does not mention the Federal Energy Regulatory Commission (FERC).  ERC is responsible for licensing non-federally authorized hydropower projects, even if constructed on federal land. It is unclear how the MOU will fully impact non-federal hydropower growth.  Since two of the listed MOU goals are to coordinate research and expedite the permitting process on federal lands, FERC’s role is crucial to any efforts to make hydropower project development more efficient.  Even though DOI seems to be working through the Bureau of Reclamation, DOI has other subordinate agencies that are responsible for federal review of significant environmental resources such as the Fish and Wildlife Service.  If DOI’s role in this MOU will consider all its subordinate agencies’ interests in a coordinated way, this could help non-federal hydropower get licensed or other renewables acted on expeditiously.  The named federal agencies will also work with a variety of other agencies and stakeholders in their studies.

In addition to identifying federal facilities for potential projects and coordinating research and development efforts, the MOU states the agencies will seek to identify existing facilities eligible for retrofitting/upgrading existing facilities with new technologies.  The objective is to increase hydropower generation through low-impact and environmentally sustainable approaches.  Also, the MOU specifically lists in-river hydrokinetic projects as a possible option, and those projects will be developed through the newly created Federal Inland Hydropower Working Group that will develop river and streams projects.

The MOU will also create a basin-scale approach to hydropower development.  The basin-scale approach will emphasize sustainable, low impact or small renewable projects that can increase generation while improving biodiversity.  The basin studies will lead to a workshop in May 2010 that will eventually create a feasibility report on the pilot studies.  

Several action items are also enumerated in the MOU for the upcoming year.  One of the first action items in the MOU is for USACE and the Bureau of Reclamation to produce, by October 2010, the list of federal sites best suited for upgrades, or other projects to increase generation.  The agencies must also explore options to jointly fund or solicit projects at both USACE and Reclamation sites, and those final proposals are also due by October 2010.  The agencies will also submit a report to the Congress by April 2011 on the impact of climate change on hydropower.

The MOU also includes initiatives that could enhance renewable energy development generally across the United States.  Several goals address increasing the deliverability of renewable energy and using hydropower to help integrate other renewable energy into the grid.  The scope and statement of work for increasing hydropower transmission and storage, especially pumped storage, is due June 2010, and it will include an assessment of the amount and distribution of energy storage needed to effectively integrate renewables into the transmission grid.  DOE will also champion the certification of sustainable and environmentally friendly hydropower projects, and those projects may then be eligible for state or national renewable portfolio standards or be given some type of credit for producing clean energy.  The certification process meetings and planning must be initiated in fiscal year 2010.  Thus, although the MOU targets hydropower, it will affect all renewable development in the future.  The lists of targeted projects and consolidated research data alone may streamline renewable development nationally.  However, the role of FERC in any new development remains to be seen, especially with regard to licensing new projects.

An announcement of the MOU can be found on the DOE’s website at: