Policy Documents

Research & Commentary: Hydroelectric Power and Renewable Portfolio Standards

June 17, 2013

Several states are taking second looks at the renewable portfolio standards (RPS) they passed in the late 1990s and early 2000s.

An RPS requires utilities to obtain a specified percentage of their power from renewable sources by a certain date. Twenty-two of the 29 states with such mandates have considered changing those laws in the past two years.

States such as Connecticut and Montana have recently amended their RPS mandates by allowing more hydroelectric power to qualify as renewables. Missouri (HB 44), Oregon (SB 121), and Washington (SB 5431) are currently considering similar legislation.

Hydropower generates electricity by harnessing the rechargeable motive power of the water cycle, making it just as much a renewable resource as wind, solar, or biomass. Unlike wind and solar, hydropower is not intermittent, so it requires no fossil fuel backup generators that create greenhouse gas emissions. States that generate a large percentage of their electricity from hydroelectric power, such as Washington and Idaho, have some of the lowest electricity prices in the nation.

Fifty-six percent of U.S. renewable-generated electricity already comes from hydropower, while 28 percent comes from wind and just 1 percent from solar. Opponents say letting hydropower count toward RPS mandates will hurt development of wind and solar, which are significantly more expensive and thus less attractive to producers and consumers. RPS mandates makes electricity more expensive for ratepayers and removes the incentive for renewable energy producers to cut their own costs, inhibiting the rate at which they scale up.

Of the 80,000 dams in the United States, less than 3 percent are used to produce power, presenting an enormous opportunity to expand renewable energy by adding generators or retrofitting existing dams that were built without power-production capability. Market advocates say including all renewable sources in RPS mandates will create competitive pressure on wind and solar to reduce costs and scale up.

If lawmakers want to lower energy costs, encourage innovation, and reduce emissions, they should repeal all mandates and subsidies and create a level playing field for all energy sources. Government should not pick winners and losers, especially in the energy arena. Barring outright repeal of RPS mandates, their negative effects can be reduced by making them more inclusive and flexible.

The following documents provide additional information about hydroelectric power and renewable portfolio standards.


Ten Principles of Energy Policy
Heartland Institute President Joseph Bast outlines the ten most important principles for policymakers confronting energy issues, providing guidance to help deal with ongoing changes in markets, technology, and policies adopted in other states, supported by a thorough bibliography.

Energy 101: Hydropower
A short video produced by the U.S. Department of Energy depicting how hydroelectricity is generated and how operators plan to improve efficiency and environmental friendliness.

How Much of Our Electricity Is Generated from Renewable Energy
Renewable energy generated about 12 percent of U.S. electricity in 2012, according to the U.S. Energy Information Administration. The largest share of renewable-generated electricity came from hydroelectric power at 56 percent, followed by wind at 28 percent, biomass wood at 8 percent, biomass waste at 4 percent, geothermal at 3 percent, and solar at 1 percent.

Hard Facts: An Energy Primer
On page 53 of the Institute for Energy Research’s 2012 publication, Director of Regulatory and State Affairs Daniel Simmons uses data from the U.S. Energy Information Administration to describe what he believes are the pros and cons of hydroelectric power.

The Loophole that’s Letting Conservatives Manipulate Renewable Energy Standards
Two bloggers working for the Center for American Progress write that although hydroelectric power is an appreciable renewable energy source, adding it to state renewable portfolio standards will reduce mandated investments in wind and solar power. They suggest lawmakers add hydropower as an eligible technology but increase the RPS by the same amount.

Despite Troubled Past, Hydro Remains a Dominant Renewable Energy Source in West
John Harrison, an information officer at the Northwest Power and Conservation Council, tells online publication New West that if hydropower use were allowed to satisfy renewable portfolio standard requirements, existing resources would meet so much of the requirements there wouldn’t be a need to build new plants.

Montana Bill Would Define Hydro as Renewable Power
Montana Policy Institute CEO Carl Graham tells Environment & Climate News that if his state is going to be in the business of picking renewable energy winners and losers, it’s hypocritical to exclude hydropower, which is every bit as renewable as wind and solar. H. Sterling Burnett, senior fellow at the National Center for Policy Analysis, agrees, saying although hydropower has limitations, it can generally be counted on 24 hours a day, seven days a week.



If you have any questions about this issue or The Heartland Institute, contact Heartland Institute Policy Analyst Taylor Smith at tsmith@heartland.org or 312/377-4000.