Mississippi piques interest of hydroelectric developers

Aug 29 - St. Louis Post-Dispatch

 

For decades, the Mississippi River has been a key passageway for barges and other vessels that move millions of tons of coal and petroleum to help power the nation's economy.

These days, developers are looking to the river itself as a power source.

No fewer than a dozen hydroelectric projects are proposed just along the stretch of river bordering Missouri. Many would be situated at Army Corps of Engineers locks and dams -- structures built more than a half century ago to allow commercial navigation of the Upper Mississippi River.

Designs for the projects vary as widely as the groups backing them. Players include firms managed by former investment bankers to a barge operator to the city of Quincy. They all share a common goal: to harness the river's flow to cash in on the booming interest in renewable power. But each group likewise faces an undercurrent of financial and regulatory challenges that have dashed developers' hopes in the past.

 

"We like the Mississippi River," said Mark R. Stover, vice president of corporate affairs for Hydro Green Energy LLC, which is eyeing three projects along Missouri's shoreline. "We think there is tremendous opportunity to take the very valuable existing locks and dams and convert those into clean energy facilities."

Hydropower on the Mississippi isn't new. AmerenUE's hydroelectric plant at Keokuk, Iowa, was completed in 1913. In fact, the utility is studying ways to boost the plant's output.

And interest in developing new projects waxed and waned in recent years. But developers are ultimately scared away by high costs and lengthy federal licensing process.

In general, the river isn't ideal for hydropower development because of the topography -- it lacks the vertical drop, or "head," sought by hydro developers.

But new technologies such as "low-head" turbines are helping to change that. So, too, are incentives such as the renewable energy standards adopted by Missouri, Illinois and other states that require a certain percentage of electricity to come from renewable resources.

These laws and other federal incentives put a premium on the price of clean energy that is helping to reshape the economics of small hydro projects.

But plenty of obstacles remain, a reason why none of the projects is a sure thing. Costs for any one of the proposed hydro developments will run into the tens of millions of dollars. The licensing process is long and arduous. And new technologies being considered will face plenty of scrutiny.

Only one company -- Brookfield Renewable Power, based in Marlborough, Mass. -- actually has a license to develop a hydroelectric project on the stretch of the Mississippi River that borders Missouri.

The company is seeking a license amendment to extend the deadline for starting construction of the 75-megawatt project at the Melvin Price Locks and Dam.

The Alton site has long held allure for hydropower development. The Missouri Joint Electric Utility Commission got a 50-year federal license to develop a project in 1987. The license was transferred to the city of Alton in 1990 and was ultimately terminated after the city failed to begin construction.

The current license was granted to Price Dam Limited Partnership in 2005 and was extended the maximum four years. Brookfield, which acquired the license in 2007, needed Congress to give the Federal Energy Regulatory Commission authority to extend the construction license up to an additional six years. FERC is still considering the extension.

A couple of hours north, the city of Quincy applied last month for a federal license to build a 15-megawatt hydroelectric project on its own riverfront at Lock & Dam No. 21. The license could be had as soon as next summer if all goes right. But efforts to accelerate the $100 million project to qualify for a $30 million federal stimulus grant hit a snag.

The city must spend 5 percent of the project cost, or $5 million, by Dec. 31 to qualify for the stimulus grant -- no small sum for a city with a $29 million operating budget. Quincy has half a dozen interested equity partners, including a Missouri municipality and utilities. But the partners want the city to have a federal license in hand before committing cash.

Mayor John Spring, a former Parkway North High School science teacher, said the city could satisfy the spending requirement by ordering equipment. It has already identified a turbine manufacturer in France.

"But are we going to purchase turbines when we don't have a license?" he said.

Now, Quincy is trying to extend the deadline to qualify for the stimulus funding. Efforts have included hiring a lobbyist in Washington. If those efforts fail, the city will look to go back to its original development plan, which calls for having the project built by 2017.

Quincy also holds federal permits that give it exclusive right to study projects at Lock & Dam No. 24 at Clarksville, Mo., and Lock & Dam No. 25 at Winfield, Mo., but its focus is on Lock & Dam No. 21 right now.

CONCERNS ABOUT impact

Most of the proposed hydropower projects require additional feasibility studies before developers are confident enough to file for an operating license with FERC.

Developers must not only be convinced that the projects are technically and economically doable. They must also demonstrate that the projects won't have an adverse impact on the river.

Janet Sternberg, policy coordinator for Missouri Department of Conservation, said she was open to the potential for hydropower generation on the river. But environmental and conservation interests are eyeing development efforts cautiously.

"If you produce electricity through hydropower, you are reducing carbon emissions, which can have benefits," Sternberg said. "By the same token, we want to make sure impacts are addressed on the river, too."

Another interested party is the Army Corps of Engineers, which owns and operates the locks and dams that would house many of the projects. The Corps of Engineers is tasked with ensuring that nothing interferes with river traffic, even in low-water conditions, said Dave Gordon, chief of hydraulic design for St. Louis District ACE.

"There is a number of engineering studies required to ensure that it's not going to affect navigation," he said.

Hydro Green Energy, a small hydroelectric start-up based in Houston, is studying dozens of sites up and down the Mississippi and other rivers, including at Lock & Dam No. 27 in Granite City, Lock & Dam No. 20 in Canton, Mo., and Lock & Dam No. 22 in Saverton, Mo.

The company is in the midst of raising capital -- not an easy task in a lackluster economy -- and has money and personnel to only initially develop on one or two of the best sites, Stover said. The company hopes to have FERC licenses in hand for those projects next year and be operational by 2012.

Free Flow Power LLC, based in Massachusetts, is evaluating a group of novel projects near Missouri's Bootheel.

The projects are different from others proposed along the river because they wouldn't require dams or a vertical drop of water to produce energy. Instead, the company has proposed installing hundreds of turbines, arranged in fields and attached to pilings in the river bed, that would use only the velocity of the river current to produce electricity.

So-called hydrokinetic technology is still relatively untested. In fact, Free Flow Power has evaluated and walked away from dozens of sites along the Mississippi and Missouri rivers, choosing to focus on "the low hanging fruit" further south where the river is deeper and water flow is uninterrupted by dams, said Jon Guidroz, director of project development for Free Flow Power.

"We learned a lot, obviously, and as we learned we filtered out certain sites that are not economical," Guidroz said.

Free Flow Power is still considering 71 sites on the Mississippi and more than a dozen others on the Atchafalaya River in Louisiana. The company is eight months into a series of 11 different studies for FERC in anticipation of filing license applications as soon as 2013.

The process of obtaining hydro licenses is as long and winding as the river itself, but Free Flow Power is just as optimistic about the potential.

"There's no waterway better suited for commercializing hydrokinetics than the Mississippi," Guidroz said.

Hydro Green Energy, too, had been looking at potential hydrokinetic projects. But the company decided to focus on sites with existing dams that could be more easily and quickly developed.

A 2006 study by the Department of Energy's Idaho National Lab estimated that about 60,000 megawatts of potential hydropower capacity could be developed in the U.S. using existing dams alone. That would more than double the capacity of hydro plants regulated by FERC.

"There are 84,000 dams in the United States in the Army Corps of Engineers national inventory of dams, and there's something like 2,300 or 2,400 hydroelectric plants," said Douglas Hall, the study's author and director of Idaho National Lab's water energy program. "That leaves an awful lot of dams that do not have power generation."

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