Hydro Currents

Waterpower XV sees upsurge in hydro

The biennial Waterpower conference convened in July amid signs of growing interest in new hydro around the world. More than 1,400 delegates from 40 countries gathered July 23-26 in Chattanooga, Tenn., for Waterpower XV. Participants hailed an upsurge in hydropower prospects, fostered by demand for economical power, worries about global warming, and concerns about energy security. “Now there is a rising tide of interest in building new hydro facilities, both conventional and pumped storage,” Leslie Eden, president of conference organizer HCI Publications, told delegates. “Not since the early 1980s has there been such a high level of interest in new hydro.” President Tom Kilgore of the Tennessee Valley Authority (TVA) welcomed delegates to the heart of the TVA hydropower system. He said the hydro industry has learned to address the effects of engineering issues on the entire river environment. “The river is more than just a source of hydropower – it’s central to TVA’s three-part mission for energy, economic development, and the environment,” he said.

Lawmakers advance hydro, kinetic R&D

The Senate Appropriations Committee recommended Congress allocate a total of $10 million to reinstate the Department of Energy’s (DOE) hydropower research and development program and to create a new R&D program for hydrokinetic energy. The panel sent the $32.8 billion 2008 Energy and Water appropriations bill to the full Senate in June. The bill recommends that $2 million be appropriated to resume the DOE hydro R&D program, which received no funding in fiscal year 2007. It also recommends $8 million be provided to initiate R&D of technologies utilizing kinetic energy from non-impounded water, such as waves, currents, and tidal streams. The Senate panel’s figure is less than half that endorsed by the House Appropriations Committee, which recommended that Congress allocate $22 million to DOE for research and development of hydropower and its emerging technologies, including ocean, tidal, and in-stream hydrokinetic systems.

Report: Potential to add 2,513 MW to U.S. sites

The Bureau of Reclamation and U.S. Army Corps of Engineers estimate 1,230 MW of new hydropower capacity could be developed at 64 existing federal water resources sites, some of which already have hydro capacity. Refurbishment of some hydro plants could add more than 1,200 MW. The figures are in a study of 871 federal water resource facilities, mandated by the Energy Policy Act of 2005. Officials studied 653 sites under jurisdiction of Reclamation and the

Bureau of Indian Affairs (BIA) and 218 sites under Corps jurisdiction. The study found no viable opportunities at the BIA sites. However, Reclamation found six sites with conditions sufficient to warrant further exploration for additional hydro development totaling 53 MW. The Corps identified 58 sites based on similar criteria. It said 819 MW could be developed at 47 facilities that lack hydropower, and 358 MW could be added at 11 facilities with existing hydropower. The study found refurbishment also could add nearly 1,300 MW at existing sites. The report said Reclamation already has 141 MW of improvements planned for 2007 and beyond, while the Corps has more than 1,100 MW of rehabilitation at existing facilities in planning or under way. The report is on the Internet at www.usbr.gov/power/data/data.html.

Alcan embraces Rio Tinto bid to avoid Alcoa

Anglo-Australian miner Rio Tinto Ltd. agreed in July to buy Canada’s Alcan Inc. for US$38.1 billion to create the world’s biggest aluminum producer. Rio, the world’s second-biggest miner, said it would pay US$101 a share in cash, 13 percent above Alcan’s closing price July 11 and 33 percent above a rival US$28.8 billion cash-and-shares bid for Alcan from U.S. group Alcoa Inc. Rio said the deal was unanimously recommended by Alcan’s board. Alcoa announced an unsolicited bid of US$58.60 in cash and 0.4108 shares for each Alcan share on May 8, which was rejected by Alcan as inadequate. Alcoa secured a US$30 billion line of credit, fueling speculation it might improve its offer. Alcan Chief Executive Dick Evans is to head the combined Rio Tinto Alcan, based in Montreal, reporting to Rio Chief Executive Tom Albanese. Québec Economic Development Minister Raymond Bachand said he would examine Rio Tinto’s offer. Alcan has 35-year contracts to buy hydropower cheaply from Hydro-Québec. Those agreements hinge on Alcan meeting investment and employment targets in the province. Alcan also owns six hydro plants in Québec and others in British Columbia.

Oregon renewables standard includes hydro

Oregon Gov. Ted Kulongoski signed into law a renewables portfolio standard that requires the state’s largest utilities to obtain 25 percent of their power from renewable sources by 2025. Among eligible renewables are new hydropower, efficiency upgrades to existing hydro facilities, and wave energy. To be counted, electricity must be from a project that entered operation on, or after, Jan. 1, 1995. That means most of the state’s existing hydro capacity will not be counted. Oregon’s new law includes interim targets of 5 percent by 2011, 15 percent by 2015, and 20 percent by 2020. Utilities are not required to comply with the standard if doing so would result in rate increases of more than 4 percent. Portland General Electric, PacifiCorp, and Eugene Water and Electric Board are affected. Utilities that contribute less than 3 percent of the total state energy load are exempt from meeting the 25 percent target. Instead, they must meet either a 5 percent or 10 percent target, depending on their size.

GE, Pescarmona call off GE Hydro-IMPSA deal

General Electric (GE) disclosed June 14 that the proposed sale of GE Energy’s hydropower business to Argentina’s Pescarmona Group of Companies (PGC) has been canceled. GE announced at the end of 2006 that it agreed to sell GE Energy’s hydro business to PGC, parent of Argentina-based hydro industry supplier IMPSA. A GE Energy spokeswoman stated that the merger, to be named Tynesis Hydro, would not be completed. “The transaction previously announced in December 2006, in which Tynesis was to acquire GE Energy’s hydro business, will not close,” according to a statement issued by GE Communications Manager Erika Anderson. The statement said each party had reserved its legal rights under the parties’ agreement. It added that GE would continue to operate the hydro business.

Senate passes energy bill minus hydro

The U.S. Senate passed an energy bill in June, focusing on motor fuels and shunning amendments to add clean energy tax incentives or a renewables portfolio standard that would have provided new incentives to some hydropower and ocean technologies. Senate leaders dropped a proposed amendment for $32 billion in clean energy tax incentives after Republicans threatened a filibuster against the $29 billion in extra taxes on oil companies to fund the incentives. The Senate Finance Committee had endorsed the package of energy tax incentives, including five-year extensions for the renewable electricity production tax credit and Clean Renewable Energy Bonds offered to renewable energy projects including some hydro. The proposal also would have added ocean energy as a qualifying source. The Senate also failed to approve a renewables portfolio standard amendment. It proposed that, by 2020, 15 percent of U.S. electricity supplies be generated by renewable energy sources, including incremental hydropower installed at existing facilities. It also would have included energy from ocean projects.

Ontario expands offer to northern hydro

The government of Ontario announced it is expanding its Renewable Energy Standard Offer Program to include northern Ontario hydroelectric projects connecting to the transmission system. The government introduced the Standard Offer Program in November 2006, providing standard terms and conditions intended to make it simpler and less costly for operators of small renewable energy facilities to supply Ontario’s electricity system. Initially it restricted the program to renewable energy projects connecting to distribution systems. However, most new hydro projects in northern Ontario are expected to require connection to the transmission system. Ontario’s waterpower initiative reduces barriers to small hydro projects – 10 MW or less –by offering them the opportunity to connect to the grid.

PacifiCorp settles Montana riverbed rent case

PacifiCorp agreed to lease 47.84 acres of the bed of Montana’s Swan River in a settlement agreement that is to dismiss the Oregon-based utility from a Montana lawsuit to force hydropower utilities to pay rent for the riverbeds their projects occupy. A Montana judge declared in 2006 that dam owners PacifiCorp, Avista Corp., and PPL Montana LLC are not exempt from paying rent to Montana for the use of state-owned riverbeds occupied by their federally licensed hydro projects. Although the lawsuit is still under way to determine the amount of the utilities’ liability, PacifiCorp’s settlement resolves the matter for its 4.15-MW Bigfork project. PacifiCorp agreed to pay a full market value rental equal to the state’s share as a partial landowner of the net benefits produced by Bigfork Dam. The amount was reported to be $50,000 per year. PacifiCorp has the smallest Montana hydro holdings of the three utilities. Avista’s holdings include the 722.9-MW Clark Fork project. PPL Montana’s include the 326.9-MW Missouri-Madison, 10-MW Mystic Lake, and 92.6-MW Thompson Falls projects.

BC Hydro simplifies buying from small projects

British Columbia small power projects would be able to sell to BC Hydro at a fixed price and with standard contract terms and conditions under a new Standing Offer Program for clean electricity projects of up to 10 MW. The province-owned utility released draft terms and conditions of the program in June, in support of British Columbia’s Energy Plan. The Standing Offer program is subject to the review and approval of B.C.’s Utilities Commission. The B.C. Energy Plan established three general design principles for the new program: simplify the process, contract terms, and conditions for small power projects; offer competitive pricing for the projects relative to other supply sources; and ensure cost-effectiveness, transparency, and fairness.

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