There are significant obstacles for hydropower and pumped-water storage to participate in state clean-energy programs, experts said during a Sept. 8 webinar hosted by the Clean Energy States Alliance.
The webinar presented findings from a report published in August by CESA on the role of hydropower in clean-energy policy. The report provided a systematic review of hydropower's role in states' renewables portfolio standards and energy storage mandates.
"As there's a larger amount of variable renewables integrated onto the grid, what role does both large hydro and pumped hydro storage play in providing flexibility and stability?" CESA Project Director Val Stori asked during the webinar.
Hydropower is an eligible generation resource in all of the 30 states, plus the District of Columbia, that have an RPS in place, but most states place varying limits on hydropower based on the size of a facility or its in-service date. These eligibility criteria can have strong effects on hydropower's participation in state RPS programs, Stori said.
"When you look across at state clean-energy policies, it is remarkable how varied the treatment of hydropowered resources is state by state," Rebecca O'Neil, a program manager at the Pacific Northwest National Laboratory, said during the webinar. "It's important to think about: What do these policies that are driven at a state level do to facilities for financial incentives and further operations?"
The report also looks beyond renewables standards at other clean-energy policies, such as energy storage mandates. Of the 30 states with an RPS, only five consider pumped hydro a qualifying technology. These include California, which counts pumped hydro only when paired with a renewable generation resource, and Nevada. Colorado explicitly excludes pumped hydro as an RPS-eligible resource.
Only three pumped-hydro facilities have been licensed by the Federal Energy Regulatory Commission since 2014; the largest would be in California, the proposed 1.3-GW Eagle Mountain Pumped Storage facility. FERC is responsible for licensing new hydropower facilities, a process that can take up to 10 years, the report says, and that must include an environmental assessment or an environmental impact statement.
Due to the long permitting timelines, pumped hydro may not be able to meet shorter-term energy storage mandates. For this reason, it could benefit from longer lead times, long-term contracts and streamlined permitting in future energy storage mandates, Stori said.
California is the only Western state to have an energy storage mandate separate from its RPS. The California Public Utilities Commission in 2013 set a target for regulated utilities to procure a combined 1.3 GW of energy storage capacity by 2020. While the mandate itself did not specify which storage technologies utilities should pursue, pumped-hydro systems larger than 50 MW were explicitly classified as ineligible "to ensure that the mandate would primarily be fulfilled by emerging technologies," the report says.
The report recommends that states consider making hydropower eligible under their RPS targets or 100-percent clean-energy goals, or making hydropower an eligible technology in renewable-energy solicitations. In regard to pumped-hydro systems, the report recommends that states support its development by issuing procurement guidelines with longer lead times and larger storage targets. States could also establish loan-guarantee programs to boost low-cost capital, the report says.
A separate May 2019 report published by the San Diego County Water Authority warned that "failure to invest adequately in pumped energy storage could also require more costly overbuilding of renewable energy generators and transmission lines, leading to even higher power and transmission charges in [California]."
The CESA report stresses that the time is now for states to amend or add policies that are inclusive of hydropower and pumped storage. "As states target the 2030 timeframe for increased penetration of variable energy resources, the time is ripe for putting policies in place that support long-duration storage," it says.