Overcoming regulatory barriers to deployment of hydropower hybrids

Hybridizing existing hydropower plants with energy storage or other generation can expand the flexibility, reliability services, and economic value provided by existing hydropower assets. However, permitting delays and direct regulatory costs can create barriers. So far in the US, nine hydro-hybrids have received Federal Energy Regulatory Commission (FERC) approval and thirteen total hydro-hybrids have been developed. Analyzing these nine cases along with similar projects shows that regulatory delays have increased recently. While hydro-hybrids have not yet been affected by the worst of the delays, the risk of large delays ( > 500 days) has increased significantly. The worst delay observed was 762 days, which effectively increased the project cost by up to 28%. FERC could reduce this barrier by lowering regulatory costs and the risk of large delays with a stronger and broader categorical exclusion under the National Environmental Policy Act (NEPA) and by narrowly defining FERC’s jurisdiction over hybrid assets. A broader categorical exclusion for typical hybridization projects would reduce repeated work across projects and streamline the part of the process that carries the most timeline risk. Narrowly defining FERC’s jurisdiction over secondary storage or generation assets would increase certainty about the process and streamline many projects. For example, hybridization projects that do not affect hydropower operations and already go through environmental reviews at the state or local level may not need federal regulation to ensure responsible development and operation. This would significantly reduce the cost and risk of large delays to licensees without negative environmental or social outcomes.