New Hydro Development on Existing Dams
Brig Gen (Ret) Robert Crear
Chairman, Rye Development
UMRC 13 October 2016
New Hydro on Existing Dams
Rye Development
• Rye Development is the Manager of FFP New Hydro
• Leading developer of new hydropower on existing dams in the U.S.
• 23 late development stage hydropower projects in 7 states, with over 265 MWs
• Integrated team of highly qualified senior level professionals with extensive
experience in the Finance, Regulatory, Engineering, Commercial, Environmental and
Governmental relations aspects of hydropower development
• Committed to the responsible development of untapped hydropower resources
• There are more than 80,000 dams in the United States of which less than 3,000 currently
generate hydroelectric power
• The new development will bring substantial infrastructure investment, job creation
and local renewable power for generations to come
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Integrated Development Approach
Strong Team
 Integrated team with expertise across licensing/regulatory, political
environmental, engineering, operations, energy marketing and finance
 In-house functions facilitate a direct relationship with stakeholders and allow
project design to be responsive across all functional areas
 Cluster projects on a single river system, single USACE district, single FERC branch
“Cluster” Strategy
 Facilitates review of cumulative and system-wide impacts by regulators
 Mitigates “dry hole” risk; imparts economies of scale
Early Engagement w
“Red Flag” issues
Focus on Economic
Feasibility
 Early comprehensive stakeholder consultations, with USACE and others
 Strong push to identify and negotiate key engineering and environmental issues
upfront
 Evaluate economic feasibility of projects frequently but take a long view
approach rather than react to short-term changes
 Use independent hydro general contractors and equipment bids to validate
construction cost estimate methodology across the portfolio
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Advanced Projects Portfolio
FFP NH’s 23 Advanced Projects are diversified across geographies and will be in operation by 2019
Cluster
State
ISO
NTP
COD
MW
GWh
Muskingum River
OH
PJM Q4 2017 Q2 2019
23.0
132.6
Williams Dam
IN
MISO Q4 2017 Q4 2018
4.0
19.5
Yazoo River Basin
MS
MISO Q3 2018 Q3 2019
33.3
119.4
Allegheny
PA
PJM Q3 2018 Q1 2020
17.0
83.3
Monongahela
PA
PJM Q4 2018 Q4 2019
53.0
204.7
Ohio River
PA
PJM Q3 2018 Q1 2020
78.0
344.7
Kentucky River
KY
PJM Q4 2017 Q4 2018
5.0
18.5
Red River
LA
MISO Q3 2018 Q1 2020
52.0
207.4
Total
265.3 1,130.1
Development in Clusters confers Economies of
Scale
 Regulatory documents/studies conducted
together: enabled cumulative impacts analysis,
streamlined workload for regulators
 Similar engineering design
 Economies of scale in procurement,
construction, and O&M
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Army Corps Districts / Divisions
FFP NH’s Advanced Projects are limited to four USACE districts and two divisions
Cluster
District
Division
Yazoo River Basin
Vicksburg
Mississippi Valley
Allegheny L&D 2
Pittsburgh
Great Lakes / Ohio River
Emsworth Projects
Pittsburgh
Great Lakes / Ohio River
Monongahela River - Lower
Pittsburgh
Great Lakes / Ohio River
Monongahela River - Upper
Pittsburgh
Great Lakes / Ohio River
Montgomery Project
Pittsburgh
Great Lakes / Ohio River
Muskingum Cluster
Huntington
Great Lakes / Ohio River
Kentucky L&D #11
Louisville
Great Lakes / Ohio River
Overton Project
Vicksburg
Mississippi Valley
Yazoo River Basin
Vicksburg
Mississippi Valley
Constant engagement strategy at every level:





Project
District
Division
Headquarters
Stakeholders
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Benefits of Hydropower
•
Long Lasting
•
•
Cost Competitive
•
•
No new dams or impoundments are built for the Projects, which exclusively put to beneficial use the water
spilling over existing dams. Water that would otherwise flow over the dam is redirected through hydropower
turbines to generate electricity. All of the Projects are “run of the river” or “run of release,” meaning that they
only use the available water spilling over existing dams which is not being used for other purposes. The projects
do not change the water flow regimes or decrease amount of available water at any of the Projects.
Economic Development
•
•
Hydropower generation is a non-consumptive use of water – which means that the water that is run through the
turbines is returned to the waterway and available for all beneficial uses, including recreation and navigation. No
water is “lost” through the generation of power.
Low Impact
•
•
Hydropower on large rivers generates stable and predictable electricity due to constant river flow that fluctuates
with seasons and not with times of the day.
Non-Consumptive
•
•
Hydropower at existing dams is cost-competitive with market prices for electricity, and is among the lowest cost
renewable generation.
Stable Generation
•
•
Hydropower projects are very long-lived: it is not uncommon to see operating hydro projects that are 80 or 100
years old. Investment in the Projects now will create a generating resource that will benefit generations to come.
The construction of the Projects will create hundreds of jobs at each project during the construction
period. Operations and maintenance of the projects over time is also a source of job creation and economic
development.
Renewable Energy
•
Water is a renewable resource – there are no emissions associated with hydropower generation.
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Hydropower in the US
o Hydropower is the lowest cost renewable and has an asset life at
least twice as long as wind or solar
o Unlike wind or solar, hydropower generation is very stable and
predictable and is used as part of baseload generation
o Hydro represents 7% of US Generation1
o There are 54,000 non-powered dams that are suitable for hydropower
construction with a potential to add up to 12.1 GW of new capacity(2)
o Primary barrier to hydropower development in the U.S. is long
and unpredictable regulatory timeline
o Congress has attempted to encourage hydro development
o Hydropower Regulatory Efficiency Act of 2013
o Water Resources Development Act of 2013
1. http://www.eia.gov/
2. http://nhaap.ornl.gov/
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State
Capacity (MW)
Illinois
1,956
Iowa
694
Minnesota
71
Missouri
20
Wisconsin
246
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Barriers to New Hydro Development
 Relative to other renewables, hydropower takes a very long time to place in operation
Years to COD for Renewable
Technologies
Solar
Wind
FERC Licensing
Hydropower
0
1
2
3
4
5
6
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 A investor in the development stage will not get a return of or on capital for 5 -7 years
 Unpredictability in timing of licensing decisions, with changes in schedule, scares investors
 Timing: Predictably short timing is ideal, Predictably long timing is workable
□ Investors do not like uncertainty
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Support For Shortening Timelines
• Licensing timelines are now widely recognized as a barrier for new hydropower development
• Political pressure to shorten regulatory timelines is strong and bipartisan
• Including traditional opponents of hydropower
• Both FERC and USACE have Congressional mandates to prioritize reviews and speed up
timelines
Date
Act
Specific Directive
July 2016
MOU between FERC and USACE
New MOU to synchronizing FERC and USACE permitting processes to
“facilitate development of hydropower at the Corps’ federal facilities” per
direction of Congress and the Administration
March 2015
MOU bet. DOE, DOA, DOI
Renewal of MOU to promote hydropower as a component of the President’s
Climate Action Plan
June 2014
Water Resources Reform and
Development Act of 2014
Prioritizes development of hydropower at USACE dams and directs USACE to
prioritize reviews
August 2013
Hydropower Regulatory Efficiency
Act of 2013
Directs FERC to improve regulatory process, speed up delays and reduce
costs
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What Can Stakeholders Do?
• Support the streamlining of permitting processes
• Support the standardization of environmental and engineering studies
• Attend public meetings and file comment letters that reflect the appropriate
balance of support and information needs
• Provide existing information to developers, where applicable
• Identify upfront which projects are good candidates for hydropower development
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QUESTIONS/COMMENTS
www.ryedevelopment.com
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