The National Hydropower Association (NHA) in the U.S. has urged Congress to consider infrastructure and tax measures that invest in power generation infrastructure to help support a strong economic recovery and a clean energy future.
NHA says the federal hydropower fleet is sitting on a backlog of operation and maintenance needs – from new turbines to improving environmental performance and efficiency. Upgrading the federal hydropower fleet creates jobs, strengthens the supply chain and deepens energy resource diversity. NHA also encourages leveraging existing U.S. Department of Energy and other federal programs to develop the next generation of energy manufacturing and innovation, such as marine energy, along with job training.
NHA’s $1.5 billion Water Power Infrastructure and Innovation Strategy recommended actions include:
Hydropower Facility Improvement Program – $850 million: Program to modernize the hydropower fleet and address the backlog of operation and maintenance (O&M) needs, increasing capacity, improving efficiency and advancing environmental performance at federal and non-federal dams.
Marine Energy Infrastructure and Demonstration Program – $550 million: Investing funding for offshore testing and infrastructure for wave, tidal and ocean current precommercial demonstration projects, with additional support for DOE’s Powering the Blue Economy initiative.
Workforce Development and Job Training – $100 million: Investment in university and community college technical training grants, paid internships and placement programs at businesses and national labs.
Tax policy recommendations
The hydropower industry needs long-term certainty to accommodate the lengthy development lead times for these infrastructure projects that often last for 50 years or more. Also, tax incentives for new facilities on existing dams, in particular, are important in light of the capital-intensive nature of these projects. In addition, NHA requests that Congress enact policies that provide a level playing field for all hydropower, marine energy and pumped storage, which will attract substantial private investment and foster job growth and economic benefits throughout the U.S.
NHA’s tax policy recommendations include:
Extend and expand the production and investment tax credits: Long‐ term extensions of the PTC and ITC for hydropower projects are needed to accommodate the longer regulatory and development lead time associated with these projects.
Allow energy storage to qualify for the ITC: Expanding energy storage capacity is essential to ensuring a secure and stable grid as well as integrating more renewable energy. Pumped storage technology is the most cost-effective, large-scale storage method. The enactment of an elective payment provision for energy storage will help foster pumped storage development and help secure a resilient grid.
Extend the safe harbor provisions: Once work on a facility has begun, it can take the project several years to complete the construction process and be placed in service. Hydropower projects would benefit from an extension of the continuity of safe harbor for projects that have already commenced but experienced delays due to supply chain disruptions from the pandemic.
NHA is a nonprofit association dedicated to promoting the growth of clean, renewable hydropower and marine energy.