More hydropower relicensure expected

Thursday, April 16, 2015

Many U.S. hydropower projects face relicensure by the Federal Energy Regulatory Commission within the next 3 years, making hydro project relicensing a hot topic.

The FERC is the nation's primary federal regulator of hydropower facilities.  Under Part I of the Federal Power Act, the Commission's responsibilities over hydropower include issuing licenses for the construction of new projects, relicensing for the continuance of existing projects, and oversight of all ongoing project operations, including dam safety inspections and environmental monitoring.

According to the Commission, about 1,023 issued licenses were active as of April 1, 2015.  Licenses are typically effective for up to 50 years, largely because dams and hydroelectric power facilities are typically long-lived assets and because the regulatory process for licensure is extensive (and expensive for project developers or owners).  Nevertheless, as time marches on, even a 50-year license will ultimately expire, so owners of FERC-licensed hydropower projects must eventually evaluate relicensure

Federal law and regulations, including Section 15(b)(1) of the Federal Power Act and 18 C.F.R. §5.5 of the Commission’s regulations, govern the relicensure process.  Between 5 and 5.5 years before an existing license expires, the licensee must notify the Commission whether or not it intends to file an application for a new license.  This filing is known as a Notice of Intent or NOI.  At the same time, the licensee seeking relicensure must also file a Pre-Application Document (PAD).  The PAD must include: (1) a process plan and schedule; (2) a description of the project’s location, facilities, and operation; (3) a description of the existing environment at the project and its resource impacts; (4) a preliminary list of issues and proposed studies; and (5) a list of contacts.  A licensee must also distribute the PAD to appropriate federal, state, and interstate resource agencies, Indian tribes, local governments, and members of the public likely to be interested in the project’s relicensing.

The Commission has noted an anticipated uptick in the rate of relicensure applications.  From October 1, 2010 through September 30, 2014, the Commission has received an annual average of about 12 Notices of Intent to relicense hydroelectric projects.  According to the FERC, 47 licensed projects were in the relicensure process as of April 1.  But even more projects face relicensure in the next 3 years.  According to an April 1 notice issued by the Commission, about 100 FERC-licensed hydropower projects will begin the relicensing process between October 1, 2016, and September 30, 2018.  The Commission thus anticipates the annual average number of Notices of Intent to increase to about 34.

Owners of FERC-licensed hydropower projects nearing the end of their license terms must plan ahead to prepare for relicensure.  Given the expected increase in hydroelectric project relicensure, Commission staff reasonably expects an increase in their workload.  While most existing projects have historically been able to win new licenses, in some cases hydropower project relicensing can become controversial.  Expect the next several years to bring increased relicensing activity.

Maine considers nuclear energy law change

Monday, April 13, 2015

The Maine legislature is considering a proposal to amend state laws regarding the siting and construction of new nuclear power plants. The bill known as LD 1313, "An Act To Amend the Laws Regarding Nuclear Power Generating Facilities", is listed as a "Governor's Bill", indicating its origin from Maine Governor Paul LePage. What might LD 1313 mean for Maine?

Maine is not currently home to any operating nuclear power plants.  From 1972 to 1996, the Maine Yankee Nuclear Power Plant operated a 900 megawatt reactor in Wiscasset.  While it operated, Maine Yankee was the state's largest generator of electricity.  But a Nuclear Regulatory Commission investigation launched in 1995 identified safety and other problems that ultimately rendered continued plant operation uneconomic; the site was decommissioned from 1997 through 2005, with spent fuel remaining on site to date.

Maine Yankee was controversial from its inception, with significant opposition to its construction from anti-nuclear groups and others.  Partially in response to this controversy, in 1987 Maine enacted a law "to provide for citizen participation in any decision to construct a nuclear power plant within the State."  As part of that law (as amended in 1999), the Legislature enacted a finding "that construction of a nuclear power plant is a major financial investment, which will have consequences for consumers for years to come."  The law also included a finding that, "In the recent past, investments in nuclear power plants have caused severe financial strain on consumers."  In addition, the law required a statewide voter referendum prior to the construction of any nuclear power plant in Maine, and prohibited construction of a nuclear power plant without this voter approval.

Governor LePage's proposal would amend those two sections of existing law relating to the process for siting nuclear power plants.  First, LD 1313 would delete the legislative finding that "In the recent past, investments in nuclear power plants have caused severe financial strain on consumers." Second, LD 1313 would limit the referendum requirement to nuclear power plants "with capacity greater than 500 megawatts."

LD 1313 would appear to encourage the construction of relatively small nuclear power plants in Maine -- that is, those with capacity of 500 megawatts or smaller, roughly half of Maine Yankee's size.  But of the approximately 100 nuclear power plants in commercial operation in the U.S. today, nearly all can generate more than 500 megawatts of power.  The Omaha Public Power District's Fort Calhoun plant in Nebraska is rated at 476 megawatts, and is one of the only commercial reactors in the U.S. smaller than 500 megawatts.  The technical and security aspects of nuclear power have traditionally pushed utilities to develop relatively large nuclear power plants, making the development of small but traditional nuclear power in Maine relatively unlikely.

Perhaps more likely to benefit if LD 1313 is enacted would be the development of small modular nuclear reactors.  According to the U.S. Department of Energy, small modular reactors offer the advantage of lower initial capital investment, scalability, and siting flexibility at locations unable to accommodate more traditional larger reactors.  They also have the potential for enhanced safety and security.  The Department of Energy has expressed interest in advancing small modular reactor technology.  If LD 1313 is enacted, it could eliminate the requirement of statewide voter approval of the construction of a nuclear power plant using small modular reactor technology.

But whether LD 1313's enactment would actually lead to the construction of small modular reactors in Maine is unclear.  Is the voter referendum requirement really the chief obstacle to small modular reactor construction in Maine?  Or can Maine's lack of small modular reactors be explained by other limitations -- like technology, financing, or safety regulations?

LD 1313 has been referred to the Maine State Legislature's Joint Standing Committee on Energy, Utilities and Technology.  To date, no public hearing has been scheduled.

Energy Department to fund low-impact hydropower R&D

Friday, April 10, 2015

The U.S. Department of Energy has announced $7 million in funding for the research and development of advanced low-impact hydropower systems.  The Energy Department's competitive solicitation is designed to fund projects that help advance hydropower drivetrains -- the systems passing turbines' rotational energy along to their attached generators -- and structural foundations enabling low environmental impacts and reduced lifetime operating and maintaining costs.

The funding is available from the Energy Department's Office of Energy Efficiency and Renewable Energy.  This office, known as EERE, runs programs designed to speed up the development and deployment of energy efficiency and renewable energy technologies and market-based solutions.  hydropower manufacturing. 

This funding opportunity is designed to attract innovations that enable rapidly built, removable, and replaceable hydropower systems.  It solicits proposals to develop alternative hydropower systems with low civil infrastructure development costs, deployable within 2 years with relatively low environmental impacts, and which can be removed or replaced after their intended life is completed.  According to the funding opportunity announcement, these concepts and systems will be able to operate at a cost that is competitive with traditional sources of generation.

The complete funding opportunity announcement -- DE-FOA-0001286: RESEARCH AND DEVELOPMENT OF INNOVATIVE TECHNOLOGIES FOR LOW IMPACT HYDROPOWER DEVELOPMENT -- is available through the Office of Energy Efficiency and Renewable Energy's Funding Opportunity Exchange.

While this funding opportunity supports a wide variety of technological innovations for new hydropower development, specific areas of interest include:
  • New, rapidly deployable and removable hydropower technologies, such as innovative prefabricated structures, water impoundment structures, and water conveyance systems.
  • Innovative methods and materials for the construction of conventional hydropower facilities, including, but not limited to, concrete alternatives, in-water construction, and innovative advanced tunneling methods.
  • Design and lab testing of innovative conventional hydropower powertrain and generator components, such as advanced composite materials and replaceable blade technologies for turbine runners, new generator technologies, and materials and coatings for powertrain components.
The Energy Department will hold a webinar on this funding opportunity announcement on Tuesday, April 21, 2015 at 3:00 pm (ET).  Applicants must first submit a concept paper (currently due no later than 5:00 PM (ET) on May 7), with full applications currently due by 5:00 PM (ET) on June 15, 2015.

Obama links climate and health

Thursday, April 9, 2015

President Obama has issued a Presidential Proclamation declaring this week, April 6-12, 2015, as National Public Health Week.  Climate change, and its impacts on human and environmental health, figure prominently in his proclamation.

The Obama administration has focused on climate change since taking office in 2009.  In 2013, President Obama released his administration's Climate Action Plan, calling for reductions in U.S. emissions of carbon and greenhouse gases, adoption of mitigation and adaptation measures, and global action.  He has also addressed climate change in his State of the Union speeches to Congress, and the U.S. Environmental Protection Agency has issued its proposed Clean Power Plan to reduce the carbon intensity of the nation's electric power sector.

While interest in addressing climate change arises from a broad range of factors, health plays an important role in the Obama administration's action on climate issues.  In this week's Presidential Proclamation on health, President Obama noted the interdependence of climate, environment, and human health:
America's public health is deeply tied to the health of our environment. As our planet becomes more interconnected and our climate continues to warm, we face new threats to our safety and well-being. In the past three decades, the percentage of Americans with asthma has more than doubled, and climate change is putting these individuals and many other vulnerable populations at greater risk of landing in the hospital. Rising temperatures can lead to more smog, longer allergy seasons, and an increased incidence of extreme-weather-related injuries and illnesses.

My Administration is dedicated to combating the health impacts of climate change. As part of my Climate Action Plan, we have proposed the first-ever carbon pollution limits for existing power plants -- standards that would help Americans live longer, healthier lives. And as we continue to ensure the resilience of our health care system, we are working to prepare our health care facilities to handle the effects of a changing planet. Climate change is no longer a distant threat. Its effects are felt today, and its costs can be measured in human lives. Every person, every community, and every nation has a duty to protect the health of all our children and grandchildren, and my Administration is committed to leading this effort.
This week the Obama administration announced further actions to protect communities against the impacts of climate change.  These actions include convening stakeholders to prepare for a White House Climate Change and Health Summit later this spring that will feature the Surgeon General, and an Adaptation in Action Report by the Centers for Disease Control and Prevention (CDC).

The Obama administration also announced an expansion of its Climate Data Initiative to include more than 150 health-relevant datasets on  President Obama unveiled the Climate Data Initiative in 2014 to host data related to climate change that can help inform and prepare businesses and citizens for the impacts of extreme weather.  The newly released datasets are designed to help the public answer questions, including:
  • In what ways does the changing climate affect public health where I live?
  • What risk factors make individuals or communities more vulnerable to climate-related health effects?
  • How can public health agencies, communities, and individuals plan for uncertain future conditions?

Maine long-term contracting for electricity

Tuesday, April 7, 2015

Maine energy regulators have asked for public comment on the goals and objectives for a decade-old program supporting long-term contracts between utilities and independent power producers.  At stake is the future of Maine's long-term contracting program for electricity resources.

In 2006, the Maine State Legislature enacted an Act to Enhance Maine’s Energy Independence and Security, P.L. 2005, ch. 677.  Part C of that Act (codified at 35-A M.R.S. § 3210-C) authorizes the Maine Public Utilities Commission to direct transmission and distribution utilities to enter into long-term contracts for capacity and energy.  The statute directs the Commission to conduct a competitive solicitation for contracts at least every three years, and specifies the framework that the Commission must use in selectingcapacity resources for contracting, including a stated priority list of types of resources and a duty to select lowest price offers.

Since the Act's enactment, the Commission has conducted five solicitations under this program (including the current solicitation, under which proposals are due by May 1, 2015).  In each case, the Commission has hired an outside consultant to forecast relevant markets for energy, capacity, and renewable energy credits to be used in evaluating the value of the market products offered in responsive bids.

Today, the Commission issued a Notice of Inquiry into the goals and objectives for long-term contracting under the Act.  In the notice, the Commission asks for public comment on how long-term contracts can most effectively be used to support the development of increased generation from renewable resources, and reduce price volatility and greenhouse gas emissions; how the Commission should evaluate proposals' price reduction benefits; and how to best structure transactions.

The Commission also asked for comment on relatively novel potential uses of the program, including leveraging federal support for energy programs to benefit Maine ratepayers, increasing in-state generation capacity such that Maine would “separate” from the rest of New England in the regional forward capacity market to yield reduced in-state prices for capacity, and "geo-targeting" capacity resources to avoid transmission and distribution costs more effectively.

Finally, the Commission requested feedback on its long-term contracting process.  Should the Commission issue requests for proposal on a set schedule (e.g. every two years), or should it retain discretion as to when to issue an RFP?  Should the process include fixed dates for key milestones like submission of final bids or Commission decisions, or should it remain flexible and unfixed?

Comments are due to the Maine Public Utilities Commission by May 6, 2015.

Virginia offshore wind research lease

Friday, April 3, 2015

The U.S. federal agency responsible for leasing offshore wind sites on the outer continental shelf has executed its first wind energy research lease, giving Virginia's state energy agency the right to pursue the Virginia Offshore Wind Technology Advancement Project (VOWTAP), a 12-megawatt offshore wind test facility to be located in federal ocean waters.

Offshore wind energy offers the potential to generate large amounts of electricity from a renewable resource, but to date no commercial grid-tied U.S. offshore wind projects are operating.  The U.S. Bureau of Ocean Energy Management is responsible for leasing sites on the outer continental shelf for energy projects, including offshore wind and other renewable energy developments.  BOEM has auctioned off sites for offshore wind projects off several East Coast states, including Virginia, but had not previously issued a research lease.

On March 24, BOEM announced the execution of a wind energy research lease with the Commonwealth of Virginia’s Department of Mines, Minerals and Energy (DMME).  Under research lease OCS-A 0497 (35 pages), the Virginia agency proposes to design, develop and demonstrate a grid-connected, 12-megawatt offshore wind test facility on the Outer Continental Shelf off the coast of Virginia, in partnership with a local utility affiliated with Dominion Resources, Inc.

The 30-year lease covers approximately 2,135 acres of sea space east of Virginia Beach, adjacent to the Wind Energy Area leased to Virginia Electric and Power Company (dba Dominion Virginia Power) for commercial development since 2013.  The lease describes the project as "a research project to generate energy using wind turbine generators and conduct any associated resource assessment activities, as well as install associated offshore substation platforms, inter-array cables, and subsea export cables."  As a research lease, the Virginia agreement does not include any fees payable from DMME to BOEM "for the purpose of ensuring a fair return for the use of this lease area."

As is standard for BOEM's offshore wind site leases, the lease itself does not give the lessee the right to build or operate an offshore wind project.  Rather, the lease gives the Virginia DMME the exclusive right to submit to BOEM for approval a Site Assessment Plan and a Research Activities Plan, and then to allow a designated operator to conduct whatever activities are described in those plans once they are approved by BOEM. 

In this case, DMME has designated Dominion subsidiary Virginia Electric and Power Company as the lease operator.  Dominion's partnership with DMME on offshore wind dates back at least to 2012, when the U.S. Department of Energy announced funding awards for seven proposed Offshore Wind Advanced Technology Demonstration Projects.  Dominion won one of these 2012 awards, and partnered with DMME and others to establish VOWTAP.  VOWTAP won a second funding award from DOE in 2014 for deployment activities.

Dominion and DMME have already filed a Research Activities Plan for VOWTAP.  With the research lease in hand, the path forward includes approval of that plan and a Site Assessment Plan by BOEM.  If the VOWTAP project is built, the data obtained and lessons learned from this project will be made publicly available and inform the future production of renewable energy within the adjacent commercial Wind Energy Area leased to Dominion.