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Annual Technology Baseline 2017

National Renewable Energy Laboratory


Recommended Citation:
NREL (National Renewable Energy Laboratory). 2017. 2017 Annual Technology Baseline. Golden, CO: National Renewable Energy Laboratory. http://atb.nrel.gov/.


Please consult Guidelines for Using ATB Data:
https://atb.nrel.gov/electricity/user-guidance.html

Hydropower

Note: Pumped-storage hydropower is considered a storage technology in the ATB and will be addressed in future years. It and other storage technologies are represented in Standard Scenarios Model Results from the ReEDS model.

Upgrades to Existing Facilities

Representative Technology

Hydropower technologies have produced electricity in the United States for over a century. Many of these infrastructure investments have potential to continue providing electricity in the future through upgrades of existing facilities (DOE 2016). At individual facilities, investments can be made to improve the efficiency of existing generating units through overhauls, generator rewinds, or turbine replacements. Such investments are known collectively as "upgrades," and they are reflected as increases to plant capacity. As plants reach a license renewal period, upgrades to existing facilities to increase capacity or energy output are typically considered. While the smallest projects in the United States can be as small as 10–100 kW, the bulk of upgrade potential is from large, multi-megawatt facilities.

Resource Potential

The estimated total upgrade potential of 6.9 GW/24 TWh (at about 1,800 facilities) is based on generalizable information drawn from a series of case studies or owner-specific assessments (DOE 2016). Information available to inform the representation of improvements to the existing fleet includes:.

  • A systematic, full-fleet assessment of expansion potential at Reclamation projects performed under the Reclamation Hydropower Modernization Initiative (see U.S. Bureau of Reclamation, "Hydropower Resource Assessment at Existing Reclamation Facilities")
  • Case study reports from the U.S. Army Corps of Engineers (Corps) performed under its Hydropower Modernization Initiative (Montgomery, Watson, and Harza 2009)
  • Case study reports combining assessments of upgrade and unit and plant optimization potential from the U.S. Department of Energy/Oak Ridge National Laboratory Hydropower Advancement Project.
map of total upgrade potential for hydropower facilities in the United States
Map of the hydropower resource in the United States

Renewable energy technical potential, as defined by Lopez et al. (2012), represents the achievable energy generation of a particular technology given system performance, topographic limitations, and environmental and land-use constraints. The primary benefit of assessing technical potential is that it establishes an upper-boundary estimate of development potential. It is important to understand that there are multiple types of potential—resource, technical, economic, and market (Lopez et al. 2012; NREL, “Renewable Energy Technical Potential”).

Base Year and Future Year Projections Overview

Upgrades are often among the lowest-cost new capacity resource, with the modeled costs for individual projects ranging from $800/kW to nearly $20,000/kW. This differential results from significant economies of scale from project size, wherein larger capacity plants are less expensive to upgrade on a dollar-per-kilowatt basis than smaller projects are. The average cost of the upgrade resource is approximately $1,500/kW.

CAPEX for each existing facility is based on direct estimates (DOI 2010) where available. Costs at non-reclamation plants were developed using Hall et al. (2003).

Cost= (277 × ExpansionMW-0.3) + (2230 × ExpansionMW-0.19)

The capacity factor is based on actual 10-year average energy production reported in EIA 923 forms. Some hydropower facilities lack flexibility and only produce electricity when river flows are adequate. Others with storage capabilities are operated to meet a balance between electric system, reservoir management, and environmental needs using their dispatch capability.

No future cost and performance projections for hydropower upgrades are assumed.

Upgrade cost and performance are not illustrated in this documentation of the ATB for the sake of simplicity.

Standard Scenarios Model Results

The ATB CAPEX, O&M, and capacity factor assumptions for the Base Year and future projections through 2050 for High, Mid, and Low projections are used to develop the NREL Standard Scenarios using the ReEDS model. See ATB and Standard Scenarios.

The ReEDS model times upgrade potential availability with the relicensing date, plant age (50 years), or both.

Powering Non-Powered Dams

Representative Technology

Non-powered dams (NPD) are classified by energy potential in terms of head. Low-head facilities have design heads below 20 m and typically exhibit the following characteristics (DOE 2016):

  • 1MW to 10 MW
  • New/rehabilitated intake structure
  • Little, if any, new penstock
  • Axial-flow or Kaplan turbines (2-4 units)
  • New powerhouse (indoor)
  • New/rehabilitated tailrace
  • Minimal new transmission (<5 miles, if required)
  • Capacity factor of 35% to 60%.

High-head facilities have design heads above 20 m and typically exhibit the following characteristics (DOE 2016):

  • 5 MW to 30 MW
  • New/rehabilitated intake structure
  • New penstock (typically <500 feet of steel penstock, if required)
  • Francis turbines (1–3 units)
  • New powerhouse (indoor)
  • New/rehabilitated tailrace
  • Minimal new transmission line (up to 15 mw, if required)
  • Capacity factor of 35% to 60%.

Resource Potential

Up to 12 GW of technical potential exists to add power to U.S. NPD. However, when economic decision-making approximating seen in recent development activity is taken into account, the economic potential of NPD may be approximately 5.6 GW at over 54,000 dams in the contiguous United States. The majority of this potential (5 GW or 90% of resource capacity) is associated with less than 700 dams (DOE 2016). These resource considerations are discussed below:

  • According to the National Inventory of Dams, more than 80,000 dams exist that do not produce power. This data set was filtered to remove dams with erroneous flow and geographic data and dams whose data could not be resolved to a satisfactory level of detail (Hadjerioua, Wei, and Kao 2012). This initial assessment of 54,391 dams resulted in 12 GW of capacity.
  • A new methodology for sizing potential hydropower facilities that was developed for the new-stream reach development resource (Kao et al. 2014) was applied to non-powered dams. This resource potential was estimated to be 5.6 GW at over 54,000 dams. In the development of the Hydropower Vision, the NPD resource available to the ReEDS model was adjusted based on recent development activity and limited to only those projects with power potential of 500 kW or more. As the ATB uses the Hydropower Vision supply curves, this results in a final resource potential of 5 GW/29 TWh from 671 dams.
  • For each facility, a design capacity, average monthly flow rate over a 20-year period, and a design flow rate exceedance level of 30% are assumed. The exceedance level represents the fraction of time that the design flow is exceeded. This parameter can be varied and results in different capacity and energy generation for a given site. The value of 30% was chosen based on industry rules of thumb. The capacity factor for a given facility is determined by these design criteria.
  • Design capacity and flow rate dictate capacity and energy generation potential. All facilities are assumed sized for 30% exceedance of flow rate based on long-term, average monthly flow rates.

Renewable energy technical potential, as defined by Lopez et al. (2012), represents the achievable energy generation of a particular technology given system performance, topographic limitations, and environmental and land-use constraints. The primary benefit of assessing technical potential is that it establishes an upper-boundary estimate of development potential. It is important to understand that there are multiple types of potential—resource, technical, economic, and market (Lopez at al. 2012; NREL, “Renewable Energy Technical Potential”).

Base Year and Future Projections Overview

Site-specific CAPEX, O&M, and capacity factor estimates are made for each site in the available resource potential. CAPEX and O&M estimates are made based on statistical analysis of historical plant data from 1980 to 2015 (O'Connor et al. 2015a). Capacity factors are estimated based on historical flow rates. For presentation in the ATB, a subset of resource potential is aggregated into four representative NPD plants that span a range of realistic conditions for future hydropower deployment.

Projections developed for the Hydropower Vision study (DOE 2016) using technological learning assumptions and bottom-up analysis of process and/or technology improvements provide a range of future cost outcomes. Three different projections were developed for scenario modeling as bounding levels:

  • High cost: no change in CAPEX, O&M, or capacity factor from 2015 to 2050; consistent across all renewable energy technologies in the ATB
  • Mid cost: incremental technology learning, consistent with Reference in Hydropower Vision (DOE 2016); CAPEX reductions for new stream-reach development (NSD) only
  • Low cost: gains that are achievable when pushing to the limits of potential new technologies, such as modularity (in both civil structures and power train design), advanced manufacturing techniques, and materials, consistent with Advanced Technology in Hydropower Vision (DOE 2016); both CAPEX and O&M cost reductions implemented.

Standard Scenarios Model Results

ATB CAPEX, O&M and capacity factor assumptions for Base Year and future projections through 2050 for Low, Mid, and High projections are used to develop Standard Scenarios using the ReEDS model. See ATB and Standard Scenarios.

ReEDS Version 2017.1 standard scenario model results restrict the resource potential to sites greater than 500 kW consistent with the Hydropower Vision, which results in 5 GW/29 TWh at 671 dams.

New Stream-Reach Development

map of new stream-reach development potential in the United States
Source: ORNL NSD resource assessment

Representative Technology

Greenfield or new stream-reach development (NSD) sites are defined as new hydropower developments along previously undeveloped waterways and typically exhibit the following characteristics (DOE 2016):

  • 1 MW to 100 MW
  • New diversion/intake structure
  • New penstock
  • Steel with length being head/terrain dependent
  • Various turbine selections
  • Impulse/Francis are common for recently completed projects
  • New powerhouse (indoor)
  • New tailrace
  • New transmission line (up to 15 miles for new projects)
  • Capacity factor of 30% to 80%.

Resource Potential

The resource potential is estimated to be 53.2 GW/301 TWh at nearly 230,000 individual sites (Kao et al. 2014) after accounting for locations statutorily excluded from hydropower development such as national parks, wild and scenic rivers, and wilderness areas.

  • About 8,500 stream reaches were evaluated to assess resource potential (i.e., capacity) and energy generation potential (i.e., capacity factor). For each stream reach, a design capacity, average monthly flow rate over a 20-year period, and design flow rate exceedance level of 30% are assumed. The exceedance level represents the fraction of time that the design flow is exceeded. This parameter can be varied and results in different capacity and energy generation for a given site. The value of 30% was chosen based on industry rules of thumb. The capacity factor for a given facility is determined by these design criteria. Plant sizes range from kilowatt-scale to multi-megawatt scale (Kao et al. 2014).
  • The resource assessment approach is designed to minimize the footprint of a hydropower facility by restricting inundation area to the FEMA 100-year floodplain.
  • New hydropower facilities are assumed to apply run-of-river operation strategies. Run-of-river operation means that the flow rate into a reservoir is equal to the flow rate out of the facility. These facilities do not have dispatch capability.
  • Design capacity and flow rate dictate capacity and energy generation potential. All facilities are assumed sized for 30% exceedance of flow rate based on long-term, average monthly flow rates.

Renewable energy technical potential, as defined by Lopez et al. (2012), represents the achievable energy generation of a particular technology given system performance, topographic limitations, and environmental and land-use constraints. The primary benefit of assessing technical potential is that it establishes an upper-boundary estimate of development potential. It is important to understand that there are multiple types of potential—resource, technical, economic, and market (Lopez et al. 2012; NREL, “Renewable Energy Technical Potential”).

Base Year and Future Year Projections Overview

Site-specific CAPEX, O&M, and capacity factor estimates are made for each site in the available resource potential. CAPEX and O&M estimates are made based on statistical analysis of historical plant data from 1980 to 2015 (O'Connor et al. 2015a). Capacity factors are estimated based on historical flow rates. For presentation in the ATB, a subset of resource potential is aggregated into four representative NSD plants that span a range of realistic conditions for future hydropower deployment.

Projections developed for the Hydropower Vision study (DOE 2016) using technological learning assumptions and bottom-up analysis of process and/or technology improvements provide a range of future cost outcomes. Three different projections were developed for scenario modeling as bounding levels:

  • High cost: no change in CAPEX, O&M, or capacity factor from 2015 to 2050; consistent across all renewable energy technologies in the ATB
  • Mid cost: incremental technology learning, consistent with Reference in Hydropower Vision (DOE 2016); CAPEX reductions for NSD only
  • Low cost: gains that are achievable when pushing to the limits of potential new technologies, such as modularity (in both civil structures and power train design), advanced manufacturing techniques, and materials, consistent with Advanced Technology in Hydropower Vision (DOE 2016); both CAPEX and O&M cost reductions implemented.

Standard Scenarios Model Results

ATB CAPEX, O&M and capacity factor assumptions for Base Year and future projections through 2050 for Low, Mid, and High projections are used to develop Standard Scenarios using the ReEDS model. See ATB and Standard Scenarios.

ReEDS Version 2017.1 standard scenario model results restrict the resource potential to sites greater than 1 MW, which results in 30.1 GW/176 TWh on nearly 8,000 reaches.

CAPital EXpenditures (CAPEX): Historical Trends, Current Estimates, and Future Projections

Capital expenditures (CAPEX) are expenditures required to achieve commercial operation in a given year. These expenditures include the hydropower generation plant, the balance of system (e.g., site preparation, installation, and electrical infrastructure), and financial costs (e.g., development costs, onsite electrical equipment, and interest during construction) and are detailed in CAPEX Definition. In the ATB, CAPEX reflects typical plants and does not include differences in regional costs associated with labor or materials. The range of CAPEX demonstrates variation with resource in the contiguous United States.

The following figure shows the Base Year estimate and future year projections for CAPEX costs. Three cost reduction scenarios are represented: High, Mid, and Low. Historical data from actual and proposed non-powered dam (NPD) and new stream-reach development (NSD) plants installed in the United States from 1981 to 2014 are shown for comparison to the ATB Base Year. The estimate for a given year represents CAPEX of a new plant that reaches commercial operation in that year.

chart: CAPEX historical trends, current estimates, and future projections for hydropower in the 2017 ATB
Historical data shown in box-and-whiskers format where a bar represents the median, a box represents the 20th and 80th percentiles, and whiskers represent the minimum and maximum.
Historical CAPEX estimates represent actual and proposed projects from 1981 to 2014.
Year represents Commercial Online Date for a past or future plant.

Recent Trends

Actual and proposed NPD and NSD CAPEX from 1981 to 2014 (from O'Connor et al. 2015a) are shown in box-and-whiskers format for comparison to the ATB current CAPEX estimates and future projections.

The higher-cost ATB sites generally reflect small-capacity, low-head sites that are not comparable to the historical data sample's generally larger-capacity and higher-head facilities. These characteristics lead to higher ATB Base Year CAPEX estimates than past data suggest. For example, the NSD projects that became commercially operational in this period are dominated by a few high-head projects in the mountains of the Pacific Northwest or Alaska.

The Base Year estimates of CAPEX for NPDs in the ATB range from $3,800/kW to $6,000/kW. These estimates reflect facilities with 3 feet of head to over 60 feet head and from 0.5 MW to more than 30 MW of capacity. In general, the higher-cost sites reflect much smaller-capacity (<10 MW), low-head (<30 ft.) sites that have fewer analogues in the historical data, but these characteristics result in higher CAPEX.

The Base Year estimates of CAPEX for NSD range from $5,500/kW to $7,900/kW. The estimates reflect potential sites with 3 feet of head to over 60 feet head and from 1 MW to more than 30 MW of capacity. In general, NSD potential represents smaller-capacity facilities with lower head than most historical data represents. These characteristics lead to higher CAPEX estimates than past data suggests as many of the larger, higher-head sites in the United States have been previously developed.

Base Year Estimates

For illustration in the ATB, all potential NPD and NSD sites were first binned by both head and capacity. Analysis of these bins provided groupings that represent the most realistic conditions for future hydropower deployment. The design values of these four reference NPD and four reference NSD plants are shown below. The full range of resource and design characteristics is summarized in the ATB data spreadsheet.

Representative Hydropower Plants
Plants Resource Characteristics Ranges Weighted Average Values Calculated Plant Values
Plants Head (feet) Capacity (MW) Head (feet) Capacity (MW) Capacity Factor ICC (2015$/kW) O&M (2015$/kW)
NPD 1 3-30 0.5-10 15.4 4.8 0.62 $6,169 $112
NPD 2 3-30 10+ 15.9 82.2 0.64 $5,615 $31
NPD 3 30+ 0.5-10 89.6 4.2 0.60 $4,131 $119
NPD 4 30+ 10+ 81.3 44.7 0.60 $3,895 $41
NSD 1 3-30 1-10 15.7 3.7 0.66 $7,270 $125
NSD 2 3-30 10+ 19.6 44.1 0.66 $6,490 $41
NSD 3 30+ 1-10 46.8 4.3 0.62 $6,357 $118
NSD 4 30+ 10+ 45.3 94.0 0.66 $5,722 $29
Reference plants are representative of the range of resource potential shown in the columns to the right.
30+ represents head >= 30 ft.; similarly 10+ represents capacity >= 10 MW.

The reference plants shown above were developed using the average characteristics (weighted by capacity) of the resource plants within each set of ranges. For example, NPD 1 is constructed from the capacity-weighted average values of NPD sites with 3–330 feet of head and 0.5–30 MW of capacity.

The weighted-average values were used as input to the cost formulas (O'Connor et al. 2015a) in order to calculate site CAPEX and O&M costs.

CAPEX for each plant is based on statistical analysis of historical plant data from 1980 to 2015 as a function of key design parameters, plant capacity, and hydraulic head (O'Connor et al. 2015a).

NPD CAPEX = (11,489,245 × P0.976 × H-0.24) + (310,000 ×P0.7)
NSD CAPEX = (9,605,710 × P0.977 × H-0.126) + (610,000 × P0.7)

Where P is capacity in megawatts, and H is head in feet. The first term represents the initial capital costs, while the second represents licensing.

Future Projections

Projections developed for the Hydropower Vision study (DOE 2016) using technological learning assumptions and bottom-up analysis of process and/or technology improvements provide a range of future cost outcomes. Three different CAPEX projections were developed for scenario modeling as bounding levels:

  • High cost:
    • NPD and NSD CAPEX unchanged from the Base Year; consistent across all renewable energy technologies in the ATB
  • Mid cost: consistent with Reference in Hydropower Vision:
    • NSD CAPEX reduced 5% in 2035 and 8.6% in 2050
    • NPD CAPEX unchanged from the Base Year
  • Low cost: consistent with Advanced Technology in Hydropower Vision:
    • Low head NPD/All NSD CAPEX reduced 30% in 2035 and 35.3% in 2050. Low Head NPD is NPD-1 and NPD-2.
    • High head NPD CAPEX reduced 25% in 2035 and 32.7% in 2050. High head NPD is NPD-3 and NPD-4.

Detailed description of the methodology for developing Future Year Projections is found in Projections Methodology.

Technology innovations that could impact future CAPEX costs are summarized in LCOE Projections.

Standard Scenarios Model Results

ATB CAPEX, O&M and capacity factor assumptions for Base Year and future projections through 2050 for Low, Mid, and High projections are used to develop Standard Scenarios using the ReEDS model. See ATB and Standard Scenarios.

ReEDS Version 2017.1 standard scenario model results use resource/cost supply curves representing estimates at each individual facility (~700 NPD and ~8,000 NSD).

The ReEDS model represents cost and performance for NPD and NSD potential in 5 bins for each of 134 geographic regions, which results in CAPEX ranges of $2,750/kW–$9,000/kW for NPD resource and $5,200/kW–$15,600/kW for NSD.

The ReEDS model represents cost and performance for NPD and NSD potential in 5 bins for each of 134 geographic regions, which results in capacity factor ranges of 38%–80% for NPD resource and 53%–81% for NSD.

CAPEX Definition

Capital expenditures (CAPEX) are expenditures required to achieve commercial operation in a given year.

For the ATB—and based on EIA (2016a) and the System Cost Breakdown Structure described by O'Connor et al. (2015b)—the hydropower plant envelope is defined to include:

  • Hydropower generation plant
    • Civil works, such as site preparation, dams and reservoirs, water conveyances, and powerhouse structures
    • Equipment, such as the powertrain and ancillary plant electrical and mechanical systems
  • Balance of system
    • Installation and O&M infrastructure
    • Electrical infrastructure, such as transformers, switchgear, and electrical system connecting turbines to each other and to the control center
    • Project indirect costs, including costs related to environmental mitigation and regulatory compliance, engineering, distributable labor and materials, construction management start up and commissioning, and contractor overhead costs, fees, and profit
  • Financial costs
    • Owner's costs, such as development costs, preliminary feasibility and engineering studies, environmental studies and permitting, legal fees, insurance costs, and property taxes during construction
    • Electrical interconnection and onsite electrical equipment (e.g., switchyard), a nominal-distance spur line (<1 mile), and necessary upgrades at a transmission substation; distance-based spur line cost (GCC) not included in the ATB
    • Interest during construction estimated based on three-year duration accumulated 10%/10%/80% at half-year intervals and an 8% interest rate (ConFinFactor).

CAPEX can be determined for a plant in a specific geographic location as follows:

CAPEX = ConFinFactor*(OCC*CapRegMult+GCC).
(See the Financial Definitions tab in the ATB data spreadsheet.)

Regional cost variations and geographically specific grid connection costs are not included in the ATB (CapRegMult = 1; GCC = 0). In the ATB, the input value is overnight capital cost (OCC) and details to calculate interest during construction (ConFinFactor).

In the ATB, CAPEX is shown for four representative non-powered dam plants and four representative new stream-reach development plants. CAPEX estimates for all identified hydropower potential (~700 NPD and ~8,000 NSD) results in a CAPEX range that is much broader than that shown in the ATB. It is unlikely that all of the resource potential will be developed due to the very high costs for some sites. Regional cost effects and distance-based spur line costs are not estimated.

chart: CAPEX definition for hydropower in the 2017 ATB

Standard Scenarios Model Results

ATB CAPEX, O&M, and capacity factor assumptions for the Base Year and future projections through 2050 for High, Mid, and Low projections are used to develop the NREL Standard Scenarios using the ReEDS model. See ATB and Standard Scenarios.

CAPEX in ATB do not represent regional variants (CapRegMult) associated with labor rates, material costs, etc., and neither does ReEDS.

CAPEX in ATB do not include geographically determined spur line (GCC) from plant to transmission grid, and neither does ReEDS.

Operation and Maintenance (O&M) Costs

Operations and maintenance (O&M) costs represent average annual fixed expenditures (and depend on rated capacity) required to operate and maintain a hydropower plant over its technical lifetime of 50 years (the distinction between economic life and technical life is described here), including:

  • Insurance, taxes, land lease payments, and other fixed costs
  • Present value and annualized large component overhaul or replacement costs over technical life (e.g., rewind stator, patch cavitation damage, and replace bearings)
  • Scheduled and unscheduled maintenance of hydropower plant components, including turbines, generators, etc. over the technical lifetime of the plant.

The following figure shows the Base Year estimate and future year projections for fixed O&M (FOM) costs. Three cost reduction scenarios are represented. The estimate for a given year represents annual average FOM costs expected over the technical lifetime of a new plant that reaches commercial operation in that year.

chart: base year estimate and future year projections for fixed O&M costs for hydropower in the 2017 ATB

Base Year Estimates

A statistical analysis of long-term plant operation costs from FERC Form-1 resulted in a relationship between annual, FOM costs, and plant capacity (updated to 2015$ from O'Connor et al. 2015a).

Lesser of (Annual O&M (in 2015$)=227,000xP0.547) or (2.5% of CAPEX)

Future Year Projections

Projections developed for the Hydropower Vision study (DOE 2016) using technological learning assumptions and bottom-up analysis of process and/or technology improvements provide a range of future cost outcomes. Three different O&M projections were developed for scenario modeling as bounding levels:

  • High cost: FOM costs unchanged from the Base Year to 2050; consistent with all ATB technologies
  • Mid cost: FOM costs for both NPD and NSD plants are unchanged from 2015 to 2050; consistent with Reference in Hydropower Vision
  • Low cost: FOM costs for both NPD and NSD plants are reduced by 50% in 2035 and 54% in 2050, consistent with Advanced Technology in Hydropower Vision.

A detailed description of the methodology for developing future year projections is found in Projections Methodology.

Technology innovations that could impact future O&M costs are summarized in LCOE Projections.

Capacity Factor: Expected Annual Average Energy Production Over Lifetime

The capacity factor represents the expected annual average energy production divided by the annual energy production, assuming the plant operates at rated capacity for every hour of the year. It is intended to represent a long-term average over the technical lifetime of the plant (the distinction between economic life and technical life is described here). It does not represent interannual variation in energy production. Future year estimates represent the estimated annual average capacity factor over the technical lifetime of a new plant installed in a given year.

The capacity factor is influenced by site hydrology, design factors (e.g., exceedance level), and operation characteristics (e.g., dispatch or run of river). Capacity factors for all potential NPD sites and NSDs are estimated based on design criteria, long-term monthly flow rate records, and run-of-river operation.

The following figure shows a range of capacity factors based on variation in the resource for hydropower plants in the contiguous United States. Historical data from run of river hydropower plants operating in the United States from 2003 through 2012 are shown for comparison with the Base Year estimates. The range of the Base Year estimates illustrates the effect of resource variation. Future projections for High, Mid and Low cost scenarios are unchanged from the Base Year. Technology improvements are focused on CAPEX and O&M cost elements.

chart: capacity factor (annual average energy production over plant lifetime) for hydropower in the 2017 ATB
Historical data shown in box and whiskers format where a bar represents the median, a box represents the 20th and 80th percentiles, and whiskers represent the minimum and maximum.
Historical data represent energy production from about 200 run-of-river plants operating in the United States from 2003 through 2012 where Year represents calendar year.
Projection data represent expected annual average CF for plants with Commercial Online Date specified by Year.

Recent Trends

Actual energy production from about 200 run-of-river plants operating in the United States from 2003 to 2012 (EIA 2016a) is shown in box-and-whiskers format for comparison with current estimates and future projections. This sample includes some very old plants that may have lower availability and efficiency losses. It also includes plants that have been relicensed and may no longer be optimally designed for current operating regime (e.g., a peaking unit now operating as run of river). This contributes to the broad range, particularly on the low end.

Interannual variation of hydropower plant output for run-of-river plants may be significant due to hydrological changes such as drought. This impact may be exacerbated by climate change over the long term.

Current and future estimates for new hydropower plants are within the range of observed plant performance. These potential hydropower plants would be designed for specific site conditions, which would indicate operation toward the high end of the range.

Base Year Estimates

For illustration in the ATB, all potential NPD and NSD sites are represented with four reference plants, each as described below.

Representative Hydropower Plants
Plants Resource Characteristics Ranges Weighted Average Values Calculated Plant Values
Plants Head (feet) Capacity (MW) Head (feet) Capacity (MW) Capacity Factor ICC (2014$/kW) O&M (2014$/kW)
NPD 1 3-30 0.5-10 15.4 4.8 0.62 $6,169 $112
NPD 2 3-30 10+ 15.9 82.2 0.64 $5,615 $31
NPD 3 30+ 0.5-10 89.6 4.2 0.60 $4,131 $119
NPD 4 30+ 10+ 81.3 44.7 0.60 $3,895 $41
NSD 1 3-30 1-10 15.7 3.7 0.66 $7,270 $125
NSD 2 3-30 10+ 19.6 44.1 0.66 $6,490 $41
NSD 3 30+ 1-10 46.8 4.3 0.62 $6,357 $118
NSD 4 30+ 10+ 45.3 94.0 0.66 $5,722 $29

Future Year Projections

The capacity factor remains unchanged from the Base Year through 2050. Technology improvements are focused on CAPEX and O&M costs.

Standard Scenarios Model Results

ATB CAPEX, O&M, and capacity factor assumptions for the Base Year and future projections through 2050 for High, Mid, and Low projections are used to develop the NREL Standard Scenarios using the ReEDS model. See ATB and Standard Scenarios.

ReEDS Version 2017.1 standard scenario model results use resource/cost supply curves representing estimates at each individual facility (~700 NPD and ~8,000 NSD).

The ReEDS model represents cost and performance for NPD and NSD potential in 5 bins for each of 134 geographic regions, which results in capacity factor ranges of 38%–80% for the NPD resources and 53%–81% for NSD.

Existing hydropower facilities in the ReEDS model provide dispatch capability such that their annual energy production is determined by the electric system needs by dispatching generators to accommodate diurnal and seasonal load variations and output from variable generation sources (e.g., wind and solar PV).

Plant Cost and Performance Projections Methodology

Projections developed for the Hydropower Vision study (DOE 2016) using technological learning assumptions and bottom-up analysis of process and/or technology improvements provide a range of future cost outcomes. Three different projections were developed for scenario modeling as bounding levels:

  • High cost: no change in CAPEX or OPEX from 2015 to 2050; consistent across all renewable energy technologies in the ATB
  • Mid cost: incremental learning, consistent with Reference in the Hydropower Vision study (DOE 2016); CAPEX reductions for NSD only
  • Low cost: gains that are achievable when pushing to the limits of potential new technologies, such as modularity (in both civil structures and power train design), advanced manufacturing techniques, and materials, consistent with Advanced Technology in Hydropower Vision (DOE 2016); both CAPEX and O&M cost reductions implemented.
chart: cost and performance projections methodology for hydropower in the 2017 ATB

The Mid and Low cost cases use a mix of inputs based on EIA technological learning assumptions, input from a technical team of Oak Ridge National Laboratory researchers, and the experience of expert hydropower consultants. Estimated 2035 cost levels are intended to provide magnitude of order cost reductions deemed to be at least conceptually possible, and they are meant to stimulate a broader discussion with the hydropower industry and its stakeholders that will be necessary to the future of cost reduction in the industry. Cost projections were derived independently for NPD and NSD technologies.

For context, ATB cost projections are compared to the literature, which represents 7 independent published studies and 11 cost projection scenarios within these studies. Cost reduction literature for hydropower is limited with several studies projecting no change through 2050. It is unclear whether (1) this represents a deliberate estimate of no future change in cost or (2) no estimate has been made.

Hydropower investment costs are very site specific and vary with type of technology. Literature was reviewed to attempt to isolate perceived CAPEX reduction for resources of similar characteristics over time (e.g., estimated cost to develop the same site in 2015, 2030, and 2050 based on different technology, installation, and other technical aspects). Some studies reflect increasing CAPEX over time. These studies were excluded from the ATB based on the interpretation that rising costs reflect a transition to less attractive sites as the better sites are used earlier.

Literature estimates generally reflect hydropower facilities of sizes similar to those represented in U.S. resource potential (i.e., they exclude estimates for very large facilities). Due to limited sample size, all projections are analyzed together without distinction between types of technology. Note that although declines are shown on a percentage basis, the reduction is likely to vary with initial capital cost. Large reductions for moderately expensive sites may not scale to more expensive sites or to less expensive sites. Projections derived for the Hydropower Vision study for different technologies (Low Head NPD, High Head NPD, and NSD) address this simplification somewhat.

Levelized Cost of Energy (LCOE) Projections

Levelized cost of energy (LCOE) is a simple metric that combines the primary technology cost and performance parameters, CAPEX, O&M, and capacity factor. It is included in the ATB for illustrative purposes. The focus of the ATB is to define the primary cost and performance parameters for use in electric sector modeling or other analysis where more sophisticated comparisons among technologies are made. LCOE captures the energy component of electric system planning and operation, but the electric system also requires capacity and flexibility services to operate reliably. Electricity generation technologies have different capabilities to provide such services. For example, wind and PV are primarily energy service providers, while the other electricity generation technologies provide capacity and flexibility services in addition to energy. These capacity and flexibility services are difficult to value and depend strongly on the system in which a new generation plant is introduced. These services are represented in electric sector models such as the ReEDS model and corresponding analysis results such as the Standard Scenarios.

The following three figures illustrate the combined impact of CAPEX, O&M, and capacity factor projections across the range of resources present in the contiguous United States. The Current Market Conditions LCOE demonstrates the range of LCOE based on macroeconomic conditions similar to the present. The Historical Market Conditions LCOE presents the range of LCOE based on macroeconomic conditions consistent with prior ATB editions and Standard Scenarios model results. The Normalized LCOE (all LCOE estimates are normalized with the lowest Base Year LCOE value) emphasizes the effect of resource quality and the relative differences in the three future pathways independent of project finance assumptions. The ATB representative plant characteristics that best align with recently installed or anticipated near-term hydropower plants are associated with NPD 4. Data for all the resource categories can be found in the ATB data spreadsheet.

Current Market Conditions
Historical Market Conditions
Normalized

Values are in 2015$.

The ATB representative plant characteristics that best align with recently installed or anticipated near-term hydropower plants are associated with NPD 4.

The methodology for representing the CAPEX, O&M, and capacity factor assumptions behind each pathway is discussed in Projections Methodology. The three pathways are generally defined as:

  • High = Base Year (or near-term estimates of projects under construction) equivalent through 2050 maintains current relative technology cost differences
  • Mid = technology advances through continued industry growth, public and private R&D investments, and market conditions relative to current levels that may be characterized as “likely” or “not surprising”
  • Low = Technology advances that may occur with breakthroughs, increased public and private R&D investments, and/or other market conditions that lead to cost and performance levels that may be characterized as the “limit of surprise” but not necessarily the absolute low bound.

To estimate LCOE, assumptions about the cost of capital to finance electricity generation projects are required. For comparison in the ATB, two project finance structures are represented.

  • Current Market Conditions: The values of the production tax credit (PTC) and investment tax credit (ITC) are ramping down by 2020, at which time wind and solar projects may be financed with debt fractions similar to other technologies. This scenario reflects debt interest (4.4% nominal, 1.9% real) and return on equity rates (9.5% nominal, 6.8% real) to represent 2017 market conditions (AEO 2017) and a debt fraction of 60% for all electricity generation technologies. An economic life, or period over which the initial capital investment is recovered, of 20 years is assumed for all technologies. These assumptions are one of the project finance options in the ATB spreadsheet.
  • Long-Term Historical Market Conditions: Historically, debt interest and return on equity were represented with higher values. This scenario reflects debt interest (8% nominal, 5.4% real) and return on equity rates (13% nominal, 10.2% real) implemented in the ReEDS model and reflected in prior versions of the ATB and Standard Scenarios model results. A debt fraction of 60% for all electricity generation technologies is assumed. An economic life, or period over which the initial capital investment is recovered, of 20 years is assumed for all technologies. These assumptions are one of the project finance options in the ATB spreadsheet.

These parameters are held constant for estimates representing the Base Year through 2050. No incentives such as the PTC or ITC are included. The equations and variables used to estimate LCOE are defined on the equations and variables page. For illustration of the impact of changing financial structures such as WACC and economic life, see Project Finance Impact on LCOE. For LCOE estimates for High, Mid, and Low scenarios for all technologies, see 2017 ATB Cost and Performance Summary.

Areas identified as having potential cost reduction opportunities associated with the Low cost projection include:

  • Widespread implementation of value engineering and design/construction best practices
  • Modular "drop-in" systems that minimize civil works and maximize ease of manufacture reduce both capital investment and O&M expenditures
  • Use of alternative materials in place of steel for water diversion (e.g., penstocks)
  • Implementation of standardized “smart” automation and remote monitoring systems to optimize scheduling of maintenance
  • Research and development on environmentally enhanced turbines to improve performance of the existing hydropower fleet
  • Efficient, certain, permitting, licensing, and approval procedures.

The Hydropower Vision study (DOE 2016) includes roadmap actions that result in lower-cost technology.

References

DOE (U.S. Department of Energy). 2016. Hydropower Vision: A New Chapter for America's Renewable Electricity Source. Washington, D.C.: U.S. Department of Energy. DOE/GO-102016-4869. July 2016. https://energy.gov/sites/prod/files/2016/10/f33/Hydropower-Vision-10262016_0.pdf.
Montgomery, Watson, and Harza. 2009. Hydropower Modernization Initiative, Phase I, Needs and Opportunities Evaluation and Ranking. Prepared for the U.S. Army Corps of Engineers Northwest Division Hydroelectric Design Center. Contract No. W9127N-08-D-0003. Task Order 001.
Lopez, Anthony, Billy Roberts, Donna Heimiller, Nate Blair, and Gian Porro. 2012. U.S. Renewable Energy Technical Potentials: A GIS-Based Analysis. National Renewable Energy Laboratory. NREL/TP-6A20-51946. http://www.nrel.gov/docs/fy12osti/51946.pdf.
DOI (U.S. Department of the Interior, Bureau of Reclamation). 2010. Assessment of Potential Capacity Increases at Existing Hydropower Plants: Hydropower Modernization Initiative. Sacramento, CA: U.S. Department of the Interior. October 2010. https://www.usbr.gov/power/AssessmentReport/USBRHMICapacityAdditionFinalReportOctober2010.pdf.
Hall, Douglas G., Richard T. Hunt, Kelly S. Reeves, and Greg R. Carroll. 2003. Estimation of Economic Parameters of U.S. Hydropower Resources. Idaho Falls, ID: Idaho National Laboratory. INEEL/EXT-03-00662. June 2003. http://www1.eere.energy.gov/water/pdfs/doewater-00662.pdf.
Hadjerioua, Boualem, Yaxing Wei, and Shih-Chieh Kao. 2012. An Assessment of Energy Potential at Non-Powered Dams in the United States. Oakridge, TN: Oakridge National Laboratory. GPO DOE/EE-0711. April 2012. http://www1.eere.energy.gov/water/pdfs/npd_report.pdf.
Kao, Shih-Chieh, Ryan A. McManamay, Kevin M. Stewart, Nicole M. Samu, Boualem Hadjerioua, Scott T. DeNeale, Dilruba Yeasmin, M. Fayzul, K. Pasha, Abdoul A. Oubeidillah, and Brennan T. Smith. 2014. New Stream-Reach Development: A Comprehensive Assessment of Hydropower Energy Potential in the United States. Oakridge, TN: Oakridge National Laboratory. April 2014. GPO DOE/EE-1063. http://nhaap.ornl.gov/sites/default/files/ORNL_NSD_FY14_Final_Report.pdf.
O'Connor, Patrick W., Scott T. DeNeale, Dol Raj Chalise, Emma Centurion, and Abigail Maloof. 2015. Hydropower Baseline Cost Modeling, Version 2. Oak Ridge, TN: Oak Ridge National Laboratory. ORNL/TM-2015/471. September 2015. http://info.ornl.gov/sites/publications/files/Pub58666.pdf.
EIA (U.S. Energy Information Administration). 2016a. Capital Cost Estimates for Utility Scale Electricity Generating Plants. Washington, D.C.: U.S. Department of Energy. November 2016. https://www.eia.gov/analysis/studies/powerplants/capitalcost/pdf/capcost_assumption.pdf.
O'Connor, Patrick W., Qin Fen (Katherine) Zhang, Scott T. DeNeale, Dol Raj Chalise, and Emma Centurion. 2015. Hydropower Baseline Cost Modeling. Oak Ridge, TN: Oak Ridge National Laboratory. ORNL/TM-2015/14. January 2015. http://info.ornl.gov/sites/publications/files/Pub53978.pdf.
EIA (U.S. Energy Information Administration). 2017. Annual Energy Outlook 2017 with Projections to 2050. Washington, D.C.: U.S. Department of Energy. January 5, 2017. http://www.eia.gov/outlooks/aeo/pdf/0383(2017).pdf.