HYDROVISION International

Opportunities and threats: HYDROVISION International 2023 keynote charts hydro’s path forward

Opportunities and threats: HYDROVISION International 2023 keynote charts hydro’s path forward
(Steve Walsh, supervisory board member, Ukrhydroenergo. Credit: HYDROVISION International)

Steve Walsh has a knack for spotting blind spots. 

A retired U.S. Marine, Walsh has spent over 40 years as an investment and energy executive, charged not only with identifying opportunities, but also flagging threats on the horizon. 

Threats of climate change, asset degradation, and labor shortages are shared throughout the industry. But the challenges facing Walsh, and the companies he served, centered around government corruption and, most recently, war. 

“Many hydropower projects either in development or in operation are under attack,” Walsh said during the HYDROVISION International 2023 opening keynote in Charlotte, North Carolina. “Understanding that not everyone likes or supports your agenda is key to understanding the environment, and helps you formulate an adequate response. 

“That is really key to understanding the threat.”

Walsh’s career led him to designing and implementing armed security systems for AES at the 1,000 MW Chivor hydropower project in Colombia, which faced the threat of guerrilla groups kidnapping employees and sabotaging assets in the early 2000s. 

He also helped navigate divisive relations between AES and the Kazakhstan government, which accused the company of failing to invest hundreds of millions of dollars in a 550 MW hydropower fleet it acquired in 1997. After 20 years of AES operating the facilities, the Kazakhstan government reclaimed the assets. 

Today, as a supervisory board member at Ukrhydroenergo, a Ukrainian state-owned company that is the largest hydropower company in Eastern Europe, now under constant threat of shelling from the Russian invasion. 

Over the course of his career, Walsh learned that it is “very, very important” for asset owners to identify key nodes, and vulnerabilities, in their systems. He shared key considerations with HYDROVISION International 2023 attendees for designing and implementing security plans:

  • Keep people safe
  • Keep station operating 
  • Keep the availability to evacuate the power to the grid
  • Have and rehearse emergency plans
  • Be proactive with all stakeholders
  • Update your insurance policy
  • Seek advice 
  • Don’t get caught by surprise
  • Always search for ways to create value 
  • Improvise, adapt, overcome!

Hydro’s path forward 

The outlook for hydropower globally is nuanced. While new build development is rather stagnant in the U.S., O&M investments are likely to grow in the years to come, according to Brock Ramey, a power specialist at the market intelligence consultancy Industrial Info Resources, who also presented during the HYDROVISION International 2023 keynote address. 

Specifically in the U.S., permitting, regulation, and regulation remain hurdles for hydropower advancement. Typically, securing a new permit from the Federal Energy Regulatory Commission can take five years or more, while relicensing stretches 7-8 years, he said. 

Internationally, new build activity is surging in Southeast Asia (2,253 projects in development, vs. 623 in operation) and South Asia (1,507 in development, vs. 862 in operation). The U.S. and Canada, by comparison, have cumulatively 1,069 projects in operation vs. 123 in development.

Flipping the script 

As the New York Power Authority’s regional manager for Western New York and chief transformational officer, Daniella Piper is hyper-focused on elevating the recognition and appreciation for the clean electricity that hydropower provides. 

Piper oversees operations at the 2.5 GW Niagara Power Project, NYPA’s largest hydroelectric facility. NYPA, the largest state-owned public power provider in the U.S., provide almost a quarter of the power needed by the New York State grid, 80% of which comes from clean, renewables power. 

Daniella Piper, chief transformational officer, NYPA, spoke during the HYDROVISION International 2023 keynote session in Charlotte, NC. Credit: HYDROVISION International.

But despite hydropower’s outsized role in serving New York’s decarbonization goals, broad policy support is lacking, Piper said in the HYDROVISION International 2023 keynote address. Meanwhile, aggressive production demands — frequently ramping up and down to fill the gaps left by intermittent renewable power plants, like wind and solar — are taking a tole on assets. 

One of the most significant problems, Piper notes, is that across the country wholesale markets do not deliver adequate price signals for clean, flexible power generation. 

“The average hydropower project in the United States is more than 60 years old and in dire need of investment,” Piper told attendees. “These resources will be vital for the clean energy transition.” 

Piper pushed attendees, including investors, operators, trade organizations, and industry allies, to advocate for energy, ancillary service, and capacity markets to reward resources based on the services that they provide. Additionally, she said the hydro industry must leverage historic tax credits for clean energy in the Inflation Reduction Act to build new assets. 

“We as champions of hydro are well-position to ensure that it is preserved and valued to ensure a sustainable future for all,” Piper said.