DOE Water Power Program – Making It Happen Michael J. Sale

1. DOE Water Power Program – Making It Happen Michael J. Sale NWHA 2011 Annual Conference, Portland, OR February 23, 2011

2. Position among Renewables U.S. Installed Renewable Capacity (EIA, 2008*) *Accessed 6-21-10: http://www.eia.doe.gov/cneaf/electricity/epa/epat1p2.html

3. Trends in National Portfolio High annual variability and recent stagnant/downward trending (1) Trends in U.S. total portfolio (2) Corps projects becoming less available (industry standard > 95%) Source: LG Hydro Presentation, March 2010

4. Water Power Program Structure Water Team Mission Develop and deploy novel technologies, improved operational procedures, and rigorous analysis to: assess the potential extractable energy from domestic rivers, estuaries and coastal waters; and support industry to harness this renewable, emissions-free resource through environmentally sustainable and cost-effective electric generation.

5. Water Power Funding History Significant increase in appropriations over requests from FY 08 to FY 10, coming into balance between MHK and CH =Marine & Hydrokinetic ($M) =Conventional Hydropower ($M) FY 10 Equal split proposed for FY 11 $50 FY 09 $40 $40 70% $30 50% 70% $15 50% FY 08 $10 30% $15 30% $3 90% $0 10% Request Request Approp. Request Approp. Request Approp. 5

6. New Opportunities in Hydropower Numerous ways to increase hydropower portfolio • 1) Improvements at existing power plants: • Efficiency upgrades • Capacity upgrades • 2) Development of non-powered dams • 3) Small hydropower (< 5 MW): • Low-head dams or conveyance structures • New sites (waterfalls or diversions) • Water distribution systems • 4) Pumped-storage hydropower

7. Current Priorities and Activities • Demonstrate and deploy lowest cost options • Develop new technologies with better combined energy and environmental performance • Quantify undeveloped resources and cost-of-energy • Engage with regulators, agencies and NGOs to reduce time and cost of licensing

8. Recovery Act Projects

9. The Hydro Advancement Project (HAP): a pathway to stimulate hydro industry by enabling new development without new dams Engaging with Industry Focus on most cost-effective, least controversial types of new development: Upgrades at existing power plants and retrofitting existing non-powered dams (1) Create uniform auditingstandards and procedures (2) Conduct feasibility audits, to identify energy upgrade options at existing sites power plants, including advanced technology (cheap screening analyses, $30k-$50k/site, and many sites) (3) Provide financial assistance for detailed engineering design studies at most competitive sites, to define construction costs and drive financial decisions (costs are $1M-$2M/site) 2/23/2011 Slide 9

10. New Federal Cooperation MOU for Hydropower among DOE, DOI and DOA • Signed in March 2010, MOU highlights 7 key areas for interagency collaboration. • Major ongoing activities to date • Assessments of energy generation potential and analysis of potential climate change impacts to energy generation at federal hydropower facilities • Exploring opportunities for collaboration across entire river basins to increase generation and environmental conditions • Green Hydropower Certification • Federal Inland Hydropower Working Group • Joint development and demonstration of advanced technologies • Renewable Energy Integration and Energy Storage • Facilitate permitting for federal and non-federal projects at federal facilities

11. Federal Dams • Produce ~50% of U.S. conventional hydropower • Include hundreds of non-powered dams that are capable of producing hydropower • Limited funding for federal agencies to develop hydro Private Development of Federal Sites Barriers to accelerating development Significant developmentopportunities exist at federal facilities • Jurisdictional Uncertainty • Clarify the licensing process regarding overlapping regulatory authorities • Hydropower is not a priority/mission at federal projects • Elevate profile of hydropower at federal facilities • Lease of Power Privilege • Study if program is working to incentivize or not

12. Resource Assessments Defining resource potential is a critical step in designing and defending Program To be completed in 2011 by ORNL and INL Problems with Existing Resource Assessments Show substantial resource size, but use inconsistent assumptions about likely development and not detailed enough for cost-curve modeling National Hydropower Asset Assessment Project (NHAAP) Collect best-available data from all sources to understand the portfolio • Power plants and equipment • Dams, diversions and reservoirs • Stream and river basin variables • Long-term generation patterns • Water availability and effects of generation Program Supported Detailed Resource Assessments Comprehensive across the U.S; integrated across resource type • New Small Hydropower • Non-Powered Dams • Pumped Storage Hydropower

13. New Tools for Resource Assessment Oak Ridge National Laboratory National Asset Assessment Water Power GIS • Hydropower • Streamflow • Temperature • Elevation • Transmission • Water use • Land • Etc.

14. Next Big Event

15. BACKUP SLIDES Questions/Comments? Mike Reed Technology Lead of Water Power Program 202-586-2725 Michael.Reed@ee.doe.gov

16. Recovery Act Projects

17. PTC Parity Hydropower currently receives half of full PTC value Equal PTC credit needed to level playing field with other renewables Extension of programs Current deadline of 2014 is not enough time to accommodate development timeframes; especially for non-powered dams Extension would allow for licensing and development of new facilities (including non-powered) Expansion to Storage Tax credits not available for pumped storage technologies Pumped storage can help integrate renewables, and is increasingly powered by clean energy PTC can help overcome financing difficulties Increase funding for CREB program Include incremental hydropower in RES Push for Financial Incentives Proposed Changes for Tax Credits