Applications are now being accepted for incentive payments to support the generation and sale of hydroelectric power, as well as the implementation of capital improvements to boost efficiency.
The Grid Deployment Office has issued application guidance and opened solicitations for up to $200 million in funding from the Hydroelectric Incentives Program supported by the Bipartisan Infrastructure Law. The Hydroelectric Production Incentives (BIL provision 40331 and Energy Policy Act of 2005 [EPAct 2005] Section 242) will provide up to $125 million in incentive payments to qualified hydroelectric facilities for electricity generated and sold in calendar years 2021 and 2022. The Hydroelectric Efficiency Improvement Incentives (BIL provision 40332 and EPAct 2005 Section 243) will invest $75 million to enable implementation of capital improvements to boost efficiency.
An informational webinar will be held on Wednesday, April 5, 2023, for additional information. Registration is required.
“Hydropower plays a critical role in our nation’s energy transition as we work toward our clean energy goals,” said Grid Deployment Office Director Maria Robinson. “The Bipartisan Infrastructure Law investments in these two programs will make a significant contribution in the continued growth and operational improvement of our oldest renewable resource’s aging assets and ensure access to clean, reliable, and affordable electricity.”
The Hydroelectric Incentives Program aims to incentivize investment in hydroelectric facilities to ensure generators continue to provide clean electricity, support the grid as renewable energy resources such as wind and solar are integrated, improve dam safety, and reduce environmental impacts.
Boosting Hydroelectric Production
Hydropower is a key component of renewable energy generation and currently provides 6% of all electricity in the United States. However, less than 3% of the nation’s more than 90,000 dams currently produce power. Adding generation equipment to these sites could add up to 12 gigawatts of new hydropower capacity to the U.S. electric system and provide reliable, affordable power to communities across the nation. To help, the Hydroelectric Production Incentive (Section 242 of the EPAct 2005) provides payments to qualified hydroelectric facilities for electricity generated and sold, based on the number of kilowatt-hours (kWh) generated in a calendar year.
Applications are now being accepted for up to $125 million in incentive payments for projects that have added generating capacity to existing dams for electricity generated and sold in calendar years 2021 and 2022, with a maximum payment per facility of $1 million per year of generation. In addition, hydroelectric facilities of less than 20 megawatts of capacity located in communities with inadequate electric services may be eligible for incentive payments. For the purposes of the incentive payments, “inadequate electric services” is defined as a geographic area that lacks access to an interconnected electric grid; is subject to frequent electric outages, based on common reliability metrics; or where the cost of electricity is significantly above the typical residential electricity cost. The application guidance released today provides additional clarification on eligibility.
To date, DOE’s Office of Energy Efficiency and Renewable Energy’s Water Power Technologies Office WPTO) has distributed $51 million in incentive payments under Section 242 guidance. DOE’s Grid Deployment Office is overseeing the new application cycle.
Applications are due by 5:00 p.m. ET on May 8,2023, and must be submitted through the Clean Energy Infrastructure Funding Opportunity eXCHANGE
Improving Hydroelectric Efficiency
While the Hydroelectric Efficiency Improvement Incentives were created by the EPAct 2005 (Section 243), this marks the first time that funding is available, with $75 million in incentive payments authorized by the Bipartisan Infrastructure Law. Owners and operators of existing hydroelectric facilities, including pumped storage hydropower, may apply for funding to make capital improvements that can improve their efficiency by at least 3%. The application guidance outlines eligibility, the application process and requirements, and funding restrictions. Incentive payments may not exceed 30% of the costs of the applicable capital improvement, and a single qualified hydroelectric facility may only receive one incentive payment in a single fiscal year. That payment may not exceed $5 million. Once DOE determines an eligible capital improvement is complete and the hydroelectric facility efficiency is improved by at least 3%, an incentive payment will be made to the facility.
Applications are due by 5:00 p.m. ET, June 20, 2023 and must be submitted through the Clean Energy Infrastructure Funding Opportunity eXCHANGE.
An informational webinar will be held on Wednesday, April 5, 2023, for additional information about both programs. Registration is required.
Read more about the Hydropower Incentives Program.