Resources: Renewable Energy: New Hydro Technologies

Significant new potential for hydropower exists and new types of hydropower technologies are being developed.  FERC has seen an increasing interest in new hydrokinetic technologies that would generate electricity from waves or from the flow of water in ocean currents, tides, or inland waterways.  

FERC has issued preliminary permits for these types of projects in numerous states, including Alaska, California, Oregon, and Washington.  A number of preliminary permit applications are pending.  FERC has also issued licenses for projects in Washington and Minnesota.   

Because of this surge of applications for preliminary permits, FERC issued a Notice of Inquiry and Interim Policy Statement on February 15, 2007, to seek comments on how it should treat applications for preliminary permits to study hydropower projects involving proposals to utilize wave, current, and instream new technology methods to develop hydropower.  Comments supported using a “strict scrutiny” approach to issuing preliminary permits.

FERC has taken steps to reduce regulatory barriers to developing pilot projects that test new technologies and allow monitoring and study of aquatic resource impacts.  In April of 2008, FERC issued a white paper on hydrokinetic pilot project licensing procedures.  The process is available for projects that are (1) 5 megawatts or less; (2) for a short term; (3) removable and able to be shutdown on relatively short notice; (4) not located in waters with sensitive designations; (5) removed, with the site restored, before the end of the license term (unless a new license is granted); and, (6) initiated by a draft application sufficient to support environmental analysis.

FERC's goal is to complete pilot project licensing in as few as six months.  FERC envisions that these pilot project licenses would typically be for five-year periods.  Once the pilot project is complete, the project proponent would apply for a standard license or would decommission and restore the site.  For more information on FERC's proposal for pilot projects, click here.

On November 30, 2007, FERC issued a policy statement that allows it to issue conditioned licenses for hydrokinetic energy projects under certain circumstances, even if other authorizations required under federal law are outstanding.  Pursuant to this policy, FERC may issue conditioned licenses predicated on the license being precluded from commencing construction until the necessary authorizations are received.  The original policy statement has been modified in response to public comments.  Details on the conditioned license policy can be found here.

FERC and MMS continue to assert jurisdiction over hydrokinetic projects on the Outer Continental Shelf (“OCS”).  On July 9, 2008, MMS issued proposed regulations for granting leases, easements, and rights-of-way for alternative energy project activities on the OCS.  FERC submitted comments on MMS’s proposed regulations detailing FERC’s perceived role in permitting and licensing hydrokinetic projects on the OCS.  Click here for more information on FERC’s comments.  On October 16, 2008, FERC issued an order reasserting its jurisdiction over hydrokinetic projects on the OCS pursuant to the Federal Power Act.  For more information on how FERC’s licensing procedures and MMS’s proposed rules will play out, click here.  A summary of MMS’s proposed regulations can be found here.

On November 21, 2008, the Department of Energy issued a Draft Report to Congress on the Environmental Effects of Marine and Hydrokinetic Energy Projects. The report, prepared pursuant to the Energy Independence and Security Act of 2007 (“EISA”), describes (1) the potential environmental impacts of marine and hydrokinetic energy technologies; (2) options to mitigate and prevent adverse environmental impacts; (3) the role of monitoring and adaptive management; and (4) the key elements of an adaptive management program.  The final report to Congress is to be submitted in June of 2009.

Although there is significant momentum behind hydrokinetic project development, regulatory challenges remain.  The California Public Utilities Commission recently rejected a power purchase agreement between Pacific Gas & Electric and Finavera Renewables for the output of Finavera's proposed 2 MW wave energy project in Humboldt County, California, finding that the technology was not reliable and that the power purchase agreement price was not reasonable.  Click here for more information on the Commission’s decision.  

Pending Incentive Legislation for New Hydro Technologies

There are a number of pending bills that would provide incentives for these emerging technologies.  Several of these bills are sponsored by Northwest Senators and Representatives.

See the Pending Legislation section of this web site for bills relating to new hydro technologies.