Problems of hydroelectric development at existing dams : an analysis of institutional, economic, and environmental restraints in Pennsylvania, New Jersey, and Maryland

The Johns Hopkins University Applied Physics Laboratory has developed for the Department of Energy (DOE) a methodology that helps quantify the impact of the institutional, economic, and environmental (IEE) restraints on the hydroelectric development of existing dams. The methodology involves determination of the incremental costs of hydroelectric generation versus the potential hydroelectric energy output within a designated area. The resulting hydroelectric energy supply curve (kWh versus C/kWh) is a valuable tool for assisting in determining what governmental policies will encourage the greatest development of the resource. The following are some of the questions this tool should help answer: What types of hydroelectric developers should be encouraged and how should this be done? What is the effect of taxes and insurance on the supply? What effects do the present licensing costs have
upon the supply? What is the effect of low-cost turbine-generators on the supply? What are the impacts of the present environmental and recreational requirements? What would be the effect of governmental subsidies, loans, and assistance (e.g., as a federally assisted liability insurance program) on the hydroelectric supply? Within Pennsylvania, Maryland, and New Jersey, 393 nonhydroelectric dams were identified that had individual potential capacities greater than 50 kW. Twenty-nine of these dams were estimated to be economically viable at a price of 25 mills or less to a developer with an annual fixed charge rate of 10.4%. The potential capacity estimate for the three states was 151 000 kW with an annual energy potential of 8.6 × 10° kWh at a price of 25 mills/kWh. At a price of 40 mills/kWh the potential capacity estimate was 320 000 kW
with an annual energy potential of 1.7 × 10° kWh. The type of developer has a significant effect on the potential supply. The reason for this is the difference in the annual fixed charge rate expected for private versus public developers. At a price of 25 mills/kWh, the estimated supply potential from public developers (annual fixed charge rate of 10.4%) is almost four times the estimated supply potential from private developers (annual fixed charge rate of 17.9%). However, low-cost loans (6.875%) for private developers and a 50% reduction in taxes would allow private developers to supply 85% of the potential available from public developers.