Tax Credits
"Because the project is owned by the city of Hastings, a public power entity, the hydrokinetic turbines’ output is not eligible for the state or federal production tax credit (PTC)," Krouse said. "At the time of the installation of the first turbine, the Clean Renewable Energy Bonds (CREBs) program was fully subscribed, so funding via CREBs was not attainable."
He pointed out that prior to adoption of the Energy Independence and Security Act of 2007, which for the first time included hydrokinetic power technologies under the Section 45 PTC, a hydro project at a nonpublic hydropower facility would have been eligible for the PTC under the definition of incremental hydropower that was inserted into Section 45 PTC law under the Energy Policy Act of 2005. If Hydro Green Energy had partnered with a private energy company on its first hydro project, instead of the city of Hastings, the project would have been eligible for the PTC, according to Krouse.
Because all future hydro projects (and in fact, all hydrokinetic projects, regardless of location or application point) will be eligible for the Section 45 PTC and CREBs, and maybe for funding under a federal renewable portfolio standard program and a carbon cap-and-trade system, these types of projects are becoming increasingly attractive to a wide variety of entities, he explained.
Wildlife Protection
Some wildlife advocates are worried that the underwater hydrokinetic turbines might harm fish, diving birds, and other types of wildlife. Krouse was quick to respond to such concerns.
"The Hydro Green Energy turbine has three blades spinning at 21 rpm in a modestly ducted turbine that is 12 feet in diameter," he said. "Conventional units can have 8, 10, or more blades that can rotate at hundreds of rpms. Our turbine is a large and slow-moving device and should lead to minimal, and possibly no, environmental impacts. We have used the U.S. Army Corps of Engineers’ fish mortality equation to model mortality to fish. The model predicts less than 1% mortality. In that model, the error range is +/–1%, so it is possible, and we believe, that there will be no impacts to marine life at all."
He emphasized that modeling performed on his company’s turbine has shown no impact to water quality (temperature, dissolved oxygen, or turbidity). Nonetheless, his company will continue to gather water quality data at Hastings for one to three years.
"At Hastings, in April or May, we will perform the most thorough and precise fish mortality test ever performed on a hydrokinetic power device," he continued. "The results of that test, which will cost the company more than $500,000, will be made public both on our website and in scientific and industry journals to once and for all settle the question of aquatic impacts by hydrokinetic systems of our design and size. We have also implemented a bird-monitoring plan, acoustic monitoring, and a zebra mussel control program."
Looking Downstream
In terms of hydrokinetic power’s potential, a 2007 study by the Electric Power Research Institute found that the U.S. could develop at a minimum 13,000 MW of river (in-stream) and ocean-based (wave, current, and tidal) hydrokinetic power by 2025. The industry has great growth potential and is just starting to emerge from its infancy. In order to achieve this growth potential, a revision to licensing requirements is a must, as the time and expense involved under the current system are major obstacles.
Overall, Hydro Green Energy’s CEO is optimistic about the future development of hydrokinetic energy in the U.S.
"Within the next 10 years, I think it is quite reasonable to expect significant growth in the industry," he said. "In terms of how much generation actually comes on-line, I think it is too early and too difficult to predict. And, some of the growth will depend on the continuation of a number of policies at the state and federal levels designed to ensure renewable energy growth in the U.S."
Currently, the company is developing 12 hydrokinetic power projects in the U.S. — 10 open river and two tidal. Those projects are located in Mississippi, Louisiana, New York, Alaska, and Maine and range in size from 5 MW to 70 MW. Within the next five years, Hydro Green Energy hopes to have at least 350 MW on the U.S. power grid.
"Our company also is talking to a large number of hydropower companies, utilities, municipalities, and other hydrokinetic developers about selling our equipment for either new hydro projects or in-river hydrokinetic projects," Krouse said. "We expect strong U.S. and international equipment sales over the next decade, and — based on current levels of interest — sales for hydro projects could be quite significant."
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