Energy Firms Show New Interest in Pittsburgh’s Hydropower Potential

Pittsburgh Business Times
4 May 2012
By Anya Litvak, Reporter

A new slate of companies are vying for hydropower projects in the region, replacing previous candidates who thought they could make such projects work but later dropped their efforts.

It’s been a pattern in the Pittsburgh district. “They come and go,” said Jeff Benedict, hydropower coordinator at the Pittsburgh District of the U.S. Army Corps of Engineers, noting the last time a new hydropower plant came online in this area was in the late 1980s.

The reality of long licensing times and “thousands of dollars” in feasibility and engineering studies has stifled the interest of several companies over the past several years, Benedict said. Still, he’s “cautiously optimistic” that vibrant interest from several newcomers may bring new projects online.

Hydropower plants use the kinetic energy of flowing water to power a turbine that creates electricity.

Two years ago, interest in this area’s hydropower potential was dominated by Massachusetts-based Brookfield Renewable Power, which proposed 14 projects.

When it abandoned them in July 2010, saying it couldn’t justify the economics, there was a brief lull in proposals that evolved into a competition between several out-of-state firms.

Today, there are six companies looking at sites in southwestern Pennsylvania and evaluating projects totalling 213 megawatts of capacity. Half of them are new on the scene: Boston-based Free Flow Power Corp., Utah-based Symbiotics Energy and Minneapolis-based Nelson Energy Inc.

Free Flow Power has set its sights on seven locks and dams along the Monongahela, Allegheny and Ohio rivers in Pennsylvania, as well as Crooked Creek in Armstrong County and two sites in West Virginia.

The company was founded in 2007, born out of the vision that hydropower was the largest and most overlooked renewable technology in the market today, said Jon Guidroz, director of project development.

Free Flow took an inventory of available sites and saw southwestern Pennsylvania as fertile ground for hydropower development, made more attractive by certain federal tax incentives, including the soon-to-expire renewable energy production tax credit and the investment tax credit.

Guidroz said the earliest construction could begin at the southwestern Pennsylvania sites is 2015.

High Hopes From the Feds

In a recent report assessing the hydropower potential of unpowered dams, the Department of Energy found Pennsylvania to be among the most promising states for new development, with what it believes is 679 megawatts of capacity yet to be tapped.

About 75 percent of that is concentrated in southwestern Pennsylvania along the area’s three rivers. The sites with the most promise, according to the report, are Montgomery Locks and Dam in Industry, which has the potential to generate 99.8 MW, and the Emsworth Locks and Dams in Emsworth, with 84.4 MW of potential.

In general, Benedict thinks the DOE’s assessment is “on the high side” of what has been proposed in the past.

The Montgomery Locks and Dam is a case in point. Doug Spaulding, president of Nelson Energy, which is pursuing an evaluation of the site, thinks what’s feasible is about half the federal estimate.

Factors such as the siting of the powerhouse and making sure hydropower doesn’t interfere with Corps navigation have the potential to adjust the capacity size of the project, he said.

“The answer to that question is at the end of a bunch of preliminary engineering studies,” Spaulding said, and the company plans to decide within the next month if it will start putting money into those studies or drop the project, which could carry a capital cost of nearly $200 million.

Licensing a hydropower project in this region involves securing a series of permits from federal, state and municipal officials, and can take more than six years, according to Benedict. Most companies that express initial interest in developing never follow through on it.

“I can certainly sympathize there’s a lot of permitting involved,” he said.

Take Mahoning Creek Hydropower, a project that’s furthest along the development spectrum in this region. Owned by Ohio-based Advanced Hydro Solutions LLC, the 6 MW proposed plant was fully licensed by FERC more than a year ago, but has been delayed by negotiations with the Corps and the DEP over water quality parameters.

The estimated construction cost has gone from $12.5 million to $15 million over the past several years, and the construction start date will not be this month, as planned, said Advanced Hydro Solutions President David Sinclair, whose firm has been pursuing the project since December 2005.

Anya Litvak covers energy, transportation, gaming and accounting. Contact her at alitvak@bizjournals.com or (412) 208-3824.