A new report on Maine’s hydropower potential found limited opportunities to expand power generation at existing dams, but suggests the state could encourage hydropower development by tweaking state policies.
The report released Thursday by Gov. Paul LePage’s Energy Office identified 56 megawatts of additional power – beyond the more than 750 megawatts of installed capacity – that might be available by expanding or upgrading facilities that produce power now or by restarting dormant facilities with new technology. But the consultants authoring the report said such expansions are unlikely because of economics and a challenging regulatory environment at the federal and state levels.
Other recommendations include allowing long-term pricing contracts, as well as the re-creation of a “state hydropower coordinator” to boost further development of Maine’s largest renewable energy source. Hydropower generates 26 percent of the state’s electricity.
Last year, the LePage administration hired a group of consultants to inventory the state’s hydroelectric facilities and identify those that can be upgraded or restarted with new technology. LePage has repeatedly called for exploring ways to tap into more hydropower generation sources – whether in Maine or neighboring Canada – as well as expanding natural gas pipelines into Maine.
After surveying 891 dams, however, the consultants found just 47 sites with the potential to generate additional electricity – a total of 56 megawatts. That is the equivalent of a large wind power facility in Maine and is just one-tenth of the full operating capacity of the gas-fired Calpine power plant in Westbrook.
The study did not evaluate sites of potential new dams, but did say Maine has significant opportunities for “hydrokinetic” power facilities that generate electricity from the tides, waves or rivers.
SURPRISING LACK OF HYDRO POTENTIAL
Randall Dorman, senior regulatory coordinator with the Pittsfield-based consultant firm Kleinschmidt, described the hydropower results as surprising in that all of the sites were “uneconomic” under a “generous” pricing scheme. That pricing model factored in engineering, regulatory and other costs, but did not include potential transmission costs, which could be substantial for some projects. Other sites were eliminated after being deemed unfeasible because of environmental concerns.
“Even using these very generous parameters, all of the hydro sites we identified had simple paybacks of longer than 20 years, which would indicate they would be extremely expensive to develop and would not be very attractive to lenders or developers to approach,” Dorman said. “So that was somewhat of a surprising finding.”
Dorman and the other consultants said the Federal Energy Regulatory Commission presents the largest hurdle for any dam project and often discourages attempts by dam owners to restart old dams. However, the consultants suggested potential state-level policy or regulatory changes to encourage more investment by the industry, based on their surveys of hydropower companies and other states. Those included:
• Establishing a state hydropower office or coordinator responsible for coordinating all of the state agencies involved in reviewing hydropower applications. The Maine State Planning Office – which LePage disbanded – at one time had a hydropower coordinator, but the position essentially dissolved in the 1990s as the person was assigned other responsibilities.
• Opening up Maine’s “renewable energy portfolio standard” – which are credits paid to renewable energy producers – to capture more hydropower facilities.
• Introducing legislation to allow the Public Utilities Commission “to solicit pricing for long-term contracts for existing and new hydro facilities, and if the price is deemed prudent, to direct the utilities to enter into agreements for this power.”
• Promoting hydropower to improve public perception of the renewable energy source.
WILLING TO ADJUST STATE POLICIES
Patrick Woodcock, director of the Governor’s Energy Office, said long-term pricing would provide the same level of predictability that has encouraged investments in wind power and other types of renewable energy in Maine. And while 56 megawatts is not a large part of Maine’s electricity consumption, it is also not an insignificant amount, Woodcock said.
“I think we need to look at whether our regulations and public policies are supporting (hydropower),” Woodcock said. “I hope this will help start a conversation.”
Maine generates more hydropower per capita than any state east of the Mississippi River. Natural gas is responsible for generating 42 percent of the state’s electricity, followed by hydropower at 26 percent, biomass facilities burning wood products at 20 percent and wind power at 6 percent. Coal, oil, other biomass products and other fuels make up the rest of the mix.
SOME HYDRO ISSUES CONTROVERSIAL
LePage is expected to once again push to eliminate the 100-megawatt cap on Maine’s renewable energy portfolio standard, or RPS, as he has every year of his administration. Lifting the cap could help the state negotiate power purchasing agreements with Hydro Quebec and other Canadian hydropower companies.
Environmental and wind power organizations have resisted those attempts.
Under the LePage administration, the Maine Department of Environmental Protection and its commissioner, Patricia Aho, an attorney who once represented dam owners, have been criticized for losing the ability to dictate terms on water-quality issues, including lake levels during dam relicensing, by missing filing deadlines with the Federal Energy Regulatory Commission.
Jeremy Payne, executive director of the Maine Renewable Energy Association, wasn’t surprised that the consultants did not identify more potential “low-hanging fruit” in Maine’s existing hydropower facilities.
“If there were hundreds of megawatts (available), they probably would have been picked before this study ever began,” Payne said.