Hydropower

2024 ATB data for hydropower include data for two broad resource categories: nonpowered dams (NPD) and new stream-reach developments (NSD). Cost projections are derived independently for the two resource categories. The data for NPD are based on a reduced-form model estimated using data from (Oladosu et al., 2021), and those for NSD are retained from the 2023 ATB, which is based on projections developed for the Hydropower Vision study (DOE, 2016).

The NPD and NSD data cost calculations are based on baseline and potential future cost reductions using a mix of bottom-up modeling, technological learning, input from a technical team of Oak Ridge National Laboratory researchers, the experience of expert hydropower consultants, and other assumptions. The three scenarios for technology innovation are as follows:

• Conservative Technology Innovation Scenario (Conservative Scenario): no change in capital expenditures (CAPEX), operating expenditures (OPEX), or capacity factor for NPD or NSD, consistent across the 2024 ATB
• Moderate Technology Innovation Scenario (Moderate Scenario): near-term innovations for NPD using new materials for tunnel lining and penstock and replacement of large bulb turbines with matrix-type turbines; incremental technology learning for NSD, consistent with the Reference case in the Hydropower Vision study (DOE, 2016) to reduce capital expenditures (CAPEX)
• Advanced Technology Innovation Scenario (Advanced Scenario): gains expected from potential new technologies, such as modularity (in both civil structures and power train design), advanced manufacturing techniques, and materials, consistent with the Advanced Technology case in the Hydropower Vision study (DOE, 2016); both CAPEX and operation and maintenance (O&M) cost reductions implemented.

Resource Categorization

Hydropower resources can be broadly categorized depending on analytical needs and technological characteristics. Three hydropower categories are included in the 2024 ATB:

• Powering of Nonpowered Dams (NPD): These are existing dams that do not currently have hydropower. Studies have estimated up to 12 gigawatts (GW) of technical potential of U.S. NPD (Hadjerioua et al., 2012) based on average monthly flow rates over 30 years and a design flow rate exceedance level of 30% at more than 54,000 dams in the contiguous United States. However, recent developments suggest the economic potential of NPD may be lower based on current technologies. (Technical potential encompasses technologically feasible sites; economic potential includes only those where economic benefits exceed economic costs to society; market potential consists of those where financial benefits exceed financial costs.) Most of this potential (5 GW, or 90% of resource capacity) is associated with fewer than 700 dams.
• New Stream-Reach Development (NSD): These are greenfield hydropower developments along previously undeveloped waterways (DOE, 2016). The total estimated resource potential is 53.2 GW/301 terawatt hours (TWh) at nearly 230,000 individual sites (Kao et al., 2014) after accounting for locations that are statutorily excluded from hydropower development, such as national parks, wild and scenic rivers, and wilderness areas. NSD sites generally have smaller potential capacities because of lower water flow and head than most historical hydropower projects. These characteristics lead to higher CAPEX estimates than past projects because many of the larger, higher-head sites in the United States have been previously developed. New hydropower facilities are assumed to apply run-of-river operation strategies. Run-of-river operation means the flow rate into a reservoir equals the flow discharge rate, so these facilities do not have dispatch capability.
• Upgrades of Existing Facilities: These are existing hydropower infrastructure investments that have the potential to continue providing electricity in the future through upgrades (DOE, 2016). At individual facilities, investments can be made to improve the efficiency of existing generating units through overhauls, generator rewinds, or turbine replacements. In particular, as plants reach the license renewal period, upgrades to existing facilities to increase capacity or energy output are typically considered. The bulk of upgrade potential is from large, multimegawatt facilities, with a total of 6.9 GW/24 TWh (at about 1,800 facilities) based on a series of case studies or owner-specific assessments (DOE, 2016).

Representative Technology

In the 2024 ATB, CAPEX estimates are provided for eight representative NPD plants. The NPD sites are grouped into lock and lake design categories, each with four cost groups (Low Cost, Medium Cost, High Cost, and Very High Cost). CAPEX estimates for NPD sites are derived from a reduced-form model estimated with data for 19 reference sites selected to capture variations in the U.S. resource base. The reference sites are analyzed in detail to understand the drivers of costs (Oladosu et al., 2021). The detailed cost analysis was extended to other NPD sites using the reduced-form model. The NPD reference plants shown below are plants near the midrange of costs within each design/cost category previously highlighted.

The 2024 ATB retains NSD data for four representative plants from the 2023 ATB. These are based on binning approximately 8,000 potential NSD sites by head and capacity estimates from the Oak Ridge National Laboratory resource assessment (Kao et al., 2014). Analysis of these bins is used to estimate future hydropower deployment. The table below shows resource and technology characteristics for the hydropower categories included in the 2024 ATB; details are provided in the ATB data spreadsheet. The reference plants for NSD are developed using the average characteristics (weighted by capacity) of the resource groups within each set of ranges. For example, NSD 1 is constructed from the capacity-weighted average values of NSD sites with 3–30 feet of head and 0.5–10.0 megawatts (MW) of capacity. The weighted-average values are used as inputs to the cost formulas (O'Connor et al., 2015a) to calculate site CAPEX and O&M costs for NSD sites.

The 2024 ATB does not include cost estimates for hydropower upgrade potential. This is currently modeled in the Regional Energy Deployment System (ReEDS) model as becoming available at the relicensing date or plant age of 50 years or both.

Design Values of Representative Hydropower Plants

Scenario Descriptions

In general, differences among the technology scenarios for hydropower in the ATB reflect different levels of adoption of innovations. Reductions in technology costs, particularly in the Advanced Scenario, reflect opportunities outlined in the Hydropower Vision study (DOE, 2016), which included road map actions to lower technology costs. The tables below provide an overview of potential hydropower innovations. A recent analysis of NPD sites also identified potential near-term opportunities for reducing the cost of NPD hydropower under the Moderate Scenario (Oladosu et al., 2021).

Summary of Technology Innovation: Moderate Scenario (2030)

Summary of Technology Innovation: Advanced Scenario (2030)

Scenario Assumptions

The scenarios for hydropower described above are not associated with specific deployment assumptions. Scenarios assume ongoing and future R&D efforts will gradually overcome technological challenges facing new U.S. hydropower development.

Methodology

This section describes the methodology to develop assumptions for CAPEX, O&M, and capacity factor. For standardized assumptions, see labor cost, regional cost variation, materials cost index, scale of industry, policies and regulations, and inflation.

Capital Expenditures (CAPEX)

Definition: Hydropower capital costs are defined according to the breakdown structure described by O'Connor et al. (O'Connor et al., 2015a). The broad components of CAPEX include initial capital costs (e.g., site preparation, water conveyance system, powerhouse, electromechanical system, and electrical infrastructure) and development costs.

Recent Trends: Historical data and other data from the literature are reviewed in the charts below. An attempt is made to identify potential CAPEX reduction for resources of similar characteristics over time (e.g., the estimated cost to develop the same site in 2019, 2030, and 2040 based on different technology, installation, and other technical aspects). Because the sample size is limited, all literature projections are analyzed together without distinguishing the types of technologies. Note costs for the three 2024 ATB hydropower scenarios are for the lowest-cost category (i.e., NPD 1); however, such sites have dwindled in number because the most productive sites are built first.  

Base Year: CAPEX estimates for NPD sites are based on a detailed analysis of 19 reference sites using simulations with the bottom-up smHIDEA (Hydropower Integrated Design and Economic Analysis) model. The bottom-up simulations include estimates for the broad components of capital costs as outlined previously (Oladosu et al., 2021). The results of the simulations are extended to other NPD sites using a reduced-form model estimated with the bottom-up simulations results. Estimates for NSD plants are based on a 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., 2015b) as given in the following equation:

$$ \text{NSD CAPEX} = \left(9,605,710 \times P^{0.977} \times H^{-0.126}\right) + \left(610,000 \times P^{0.7}\right) $$

where P is capacity in megawatts and H is head in feet. Actual and proposed NPD and NSD CAPEX from 1981 to 2014 (O'Connor et al., 2015b) are shown in box-and-whiskers format for comparison to the ATB base year CAPEX estimates and future projections.

Base year estimates of overnight capital cost (OCC) for NPD sites in the 2024 ATB range from $3,045/kilowatt (kW) to $20,043/kW. These estimates reflect the variation in resource potentials and site features considered in the NPD reference cost analysis as outlined in the above table (Design Values of Representative Hydropower Plants). In general, the higher-cost sites reflect lower water flow and head that may also require significant civil works and transmission connections. These sites have fewer analogs in the historical data because the most productive NPD sites have already been built. Base year estimates of OCC for NSD, based on the above equation, range from $6,574/kW to $8,611/kW. The estimates reflect potential sites with 3 feet of head to more than 60 feet of head and from 1 MW to more than 30 MW of capacity. The higher-cost ATB sites generally reflect small-capacity, low-head sites that differ from 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 and Alaska.

Future Years: Projections for NPD sites are based on baseline and near-term innovation cost estimates in a 2021 study of reference sites (Oladosu et al., 2021) and on other assumptions, including technological learning, for the specific years in the 2024 ATB. Projections for NSD are based on the Hydropower Vision study (DOE, 2016) using technological learning assumptions and analysis of process and/or technology improvements to estimate future costs. The three scenarios for hydropower in the 2024 ATB are as follows:

• Conservative Scenario: NPD and NSD CAPEX are unchanged from the Base Year.
• Moderate Scenario:
  • NPD CAPEX for 2026 to 2035 are based on cost reductions for the reference sites in (Oladosu et al., 2021) relative to the 2019 Baseline. CAPEX values for 2040 are assumed to be 4% lower than in 2030.
  • NSD CAPEX is assumed to remain constant over time. An effort to update the cost estimates is ongoing.
• Advanced Scenario:
  • NPD CAPEX for 2026 to 2030 and 2031 to 2040 are, respectively, 5% and 10% lower than the Moderate Scenario for 2030.
  • All NSD CAPEX is assumed to remain constant over time. An effort to update the cost estimates is ongoing.

Use the following table to view the components of CAPEX.

Components of CAPEX

Operation and Maintenance (O&M) Costs

Definition: O&M costs represent average annual fixed expenditures (and depend on rated capacity) required to operate and maintain a hydropower plant over its lifetime, including items noted in the table below (Components of O&M Costs).

Base Year: The core metric chart shows the base year estimate and future year projections for fixed O&M (FOM) costs for each technology innovation scenario. The estimate for a given year represents the annual average FOM costs expected over the technical lifetime of a new plant that reaches commercial operation in that year.

A statistical analysis of long-term plant operation costs from Federal Energy Regulatory Commission Form-1 results in the relationships in the following equation between annual FOM costs and plant capacity. Values are updated to 2022$.

$$ \text{Lesser of Annual O&M} = \left(227,000 \times P^{0.547}\right) \text{ or } \big(2.5\% \text{ of CAPEX}\big) $$

This equation is used to estimate O&M costs for both NPD and NSD plant groups.

Future Years: 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 FOM projections are developed for scenario modeling as bounding levels:

• Conservative Scenario: FOM costs are unchanged from the Base Year to 2050, consistent with all ATB technologies.
• Moderate Scenario: FOM costs for NPD are based on the same scenario assumptions as those used for CAPEX described above, relative to the Base Year. FOM costs for NSD plants are unchanged from 2022 to 2050, consistent with the Reference case in the 2016 Hydropower Vision study.
• Advanced Scenario: FOM costs for NPD are based on the same scenario assumptions used for CAPEX described above, relative to the Base Year. FOM costs for NSD plants are reduced by 40% in 2035 and 45% in 2050, consistent with the Advanced Technology case in the Hydropower Vision study.

Use the following table to view the components of O&M.

Components of O&M Costs

Capacity Factor

Definition: 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. The capacity factor is intended to represent a long-term average over the plant's lifetime; it does not represent interannual variation in energy production. Future year estimates represent the 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).

Recent Trends: Actual energy production from about 200 run-of-river plants operating in the United States from 2003 to 2012 (EIA, 2016) is shown in the chart below. This sample includes some old plants that might have lower availability and efficiency. It also includes plants that have been relicensed and may no longer be optimally designed for the 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 output for run-of-river plants might be significant because of hydrological events such as drought. And this impact might be exacerbated by climate change over the long term.

Base Year: Base year capacity factors for NPD are based on the simulation results used to estimate CAPEX values, as discussed previously. Base year capacity factors for NSD are assumed to be near the 80^th percentile of the historical range and to have a small range.

Future Years: The capacity factor remains largely unchanged from the Base Year through 2050, except in cases where technological changes lead to slight differences in capacity, plant efficiency, or flow/head range of operation.

References

The following references are specific to this page; for all references in this ATB, see References.