Energy Department Releases 2017 Hydropower Market Report

April 30, 2018

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The Energy Department today released its second ever Hydropower Market Report, which provides a snapshot of the distribution, characteristics, and trends of the current U.S. hydropower fleet. Hydropower provides approximately 7% of the U.S. electricity supply—enough to power more than 20 million homes—and has experienced nearly 2 gigawatts (GW) of growth over the last decade in all regions of the country. The report also highlights the flexibility and reliability services that hydropower and pumped-storage hydropower (PSH) provide to the grid, which are particularly important as the U.S. grid and generation mix continues to change.

According to the 2017 Hydropower Market Report, the current development pipeline covers 214 projects totaling 1,712 megawatts of additional potential capacity. Projects adding new capacity at existing water resource infrastructure dominate the pipeline. By making use of existing water resources and infrastructure, the majority of new hydropower projects built over the last decade have added electric generating equipment to dams or conduits that were previously not powered. For PSH, the U.S. pipeline is the second largest in the world and covers 48 projects totaling almost 20 GW in various stages of planning and permitting. PSH plants provide 95% of the nation’s utility-scale electrical energy storage—a key contribution to grid reliability and stability.

The report is divided into six sections:

  • Section 1 summarizes capacity changes and trends in the U.S. fleet since 2006
  • Section 2 places the U.S. hydropower fleet in the global context
  • Section 3 presents trends in U.S. hydropower prices
  • Section 4 discusses trends in operation and maintenance costs
  • Section 5 explores supply chain trends
  • Section 6 discusses market developments shaping the context in which hydropower development and operation decisions are made.

Key findings from the 2017 Hydropower Market Report, developed by the Energy Department’s Oak Ridge National Laboratory, include:

  • U.S. hydropower grew nearly 2 GW over the past decade as owners optimized and upgraded existing assets and some new projects were constructed. Growth was seen in all regions of the country.
  • The value of hydropower’s flexibility is important and likely increasing. As the U.S. generation mix changes to include more variable renewable resources like wind and solar, hydropower provides necessary flexibility and reliability services to the grid. From 2005–2015, the use of variable renewables in the United States has increased from 2% to 11%. An analysis of many different U.S. electricity markets shows that hydropower assets are being utilized equally—and in many cases more intensely in providing ancillary services—than natural gas plants, one of the most flexible generation assets available.
  • The hydropower industry still faces challenges as the power sector evolves. Availability factors have decreased in the last decade, which presents a challenge to new hydropower development, increases operations and maintenance costs of aging infrastructure, and requires plants to be operated in new and different ways.
  • The United States has the third-largest hydropower and PSH fleet in the world, and the seventh-largest PSH pipeline.

Hydropower is a critical element of U.S. infrastructure, providing low-cost electricity for more than 100 years. Today, it plays a key role in providing flexibility to the nation’s power grids, allowing utility operators to respond quickly to changes in the power grid.

For more information on water power research, development, and testing see the Office of Energy Efficiency and Renewable Energy's Water Power Technology Office's website.