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Hydro Review

Study: Hydropower Potential Could Create 1.4 million Jobs

A comprehensive study by Navigant Consulting Inc. has identified significant untapped hydropower potential in the United States. Altogether, the technical potential for new hydropower development in the U.S. is 400,000 MW, the study shows.

By Rakesh Radhakrishnan

Hydropower is the largest renewable energy source deployed in the U.S. (representing almost 7 percent of deployed electrical capacity) and has recently been reinvigorated due to discussions of the U.S. adopting a Renewable Electricity Standard (RES). Technologies such as pumped hydropower represent ideal compliments to intermittent renewables such as solar and wind.

What's more, large parts of the existing hydropower infrastructure could be upgraded with more efficient turbines, and existing dams in the U.S. without hydropower could be retrofitted with minimal environmental impact. There are emerging technologies such as hydrokinetic, wave, tidal instream energy conversion (TISEC) and small distributed hydropower that could all contribute in helping meet a RES, while simultaneously creating high-paying jobs in the U.S.

In 2009, the National Hydropower Association (NHA) commissioned Navigant Consulting to conduct a comprehensive study on potential hydropower capacity in the U.S. The study also gauged job creation through the construction of new hydropower capacity.

Based on work done by the Department of Energy (DOE)1, there are significant untapped hydropower resources (more than 400,000 MW) in the U.S. from a variety of sources including existing dams without hydropower, hydrokinetic, pumped storage and ocean power technologies.

Navigant Consulting developed a weak RES (10 percent by 2025) and strong RES (25 percent by 2025) forecast for hydropower deployment by 2025 based on a review of literature from DOE and the Electric Power Research Institute (EPRI)2.

The review was supplemented with an analysis of permitted hydropower projects in the Federal Energy Regulatory Commission's (FERC) queue, other sources3,4,5 and industry interviews to arrive at forecasts for various technologies.

Table 1 on page 18 shows how much of the nation's hydropower potential (400,000 MW) can be achieved by 2025 under a weak RES and a strong RES. Under a strong RES, 15 percent of the nation's inland potential (300,000 MW) can be met by 2025. Under a weak RES, 7 percent of that potential could be met, the study shows. About 14 percent of the nation's ocean energy potential could be met by 2025 under a strong RES.

The estimates suggest cumulative additions of nearly 23,300 MW of hydropower in a weak RES scenario with nearly 60,000 MW installed in a strong RES scenario. Pumped storage is a large contributor in both cases with significant additional potential represented in efficiency improvements and dams that currently do not have hydropower.

Ocean hydropower systems could become a large part of the additional capacity, especially if the technology matures quickly.

In addition to analyzing the potential for adding new hydropower capacity in the U.S., Navigant Consulting attempted to answer another important question: How many jobs could be created in the U.S. if the potential for new hydro capacity was met?

Job Creation

A comprehensive picture of the hydropower industry value chain was developed to estimate the direct jobs by value chain element. These direct jobs include those in project design/permitting, turbine manufacturing, etc. Indirect jobs are created by suppliers, financiers, etc., to implement the projects and to support/supply the direct jobs that exist. Induced jobs are service sector jobs such as restaurant or retail that are created as a result of the direct and indirect jobs.

The direct full time equivalent (FTE - representing one job for a full year) per MW of hydropower installed for each of the value chain elements was estimated based on interviews with key value chain participants. The direct jobs were further split into management, engineering and support type jobs to help in looking up indirect and induced multipliers that tend to be different for these job types (because of differences in income levels represented by the jobs).

FIGURE 1 Total Jobs Distributed by State for a Weak RES (10 Percent by 2025)

The U.S. Bureau of Economic Analysis (BEA) data was then used to estimate the associated indirect and induced multipliers for these direct jobs. It was determined that direct jobs ranged anywhere from 5 to 6 FTE per MW for the mature inland hydropower technologies up to 14 FTE per MW for the less mature and more labor intensive ocean power technologies. One point to note is that in general, the less mature technologies and the smaller the size of the systems, the larger the FTE per MW as one might expect. Less mature technologies can undergo significant efficiency improvements/cost reductions as they reach market maturity and the larger systems enjoy the economies of scale as one might expect.

Since the BEA data included indirect and induced multipliers that were state specific, it was then important to first allocate the MW forecasts by state and estimate direct jobs by state. This was done by multiplying the 2025 forecasts by theoretical resource potential percentages for each state. Once the MWs were allocated, each direct job in the value chain was then estimated based on specific assumptions.

FIGURE 2 Total Jobs Distributed by State for a Strong RES (10 Percent by 2025)

The cumulative direct jobs for component manufacturing jobs and project development jobs were based on the percentage of existing companies in various states engaged in these elements of the value chain. The project deployment and operations/maintenance jobs were allocated to the states where the resource was deployed.

Based on the indirect multipliers from BEA, one direct job results in approximately 0.66 indirect jobs and 1.66 induced jobs on average (although state by state multipliers vary significantly). The cumulative jobs estimated for a weak RES scenario was about 480,000 versus about 1.4 million for a strong RES scenario. The validity of the numbers can be confirmed fairly quickly through approximate revenue estimates. For example, the 480,000 cumulative jobs represent an economic value of $48 billion (assuming $100,000 per job). Since this is the required labor for about 23,000 MW of installation, the total cost of installing systems at an average of $4 per watt is about $92 billion. This means the labor content for installing systems is about 52 percent of total costs, which was confirmed to be a reasonable allocation based on discussions with hydropower industry experts. Figures 1 and 2 show the state by state breakdown of the total cumulative jobs.

The states with the most job growth include:

  • Western states with the greatest resource potential (e.g. Washington, California, Oregon, and Alaska),
  • Manufacturing states (e.g. Pennsylvania, Wisconsin, Tennessee. and Ohio), and
  • States with advanced hydro potential (e.g. Florida, Maine, New York, and Tennessee).

One key finding from this study is that states which emphasize front end value chain elements such as project development and manufacturing stand to gain from an accelerated deployment of hydropower resources independent of which state actually reaps the benefits of the deployed project. We also compared the current FERC queue for hydropower with the weak RES and strong RES estimates and what was clear from this analysis is that meeting the weak RES scenario is plausible provided the permitting process is accelerated for projects that are in queue. Reaping the job benefits from the accelerated scenario, on the other hand, requires the adoption of an aggressive 25 percent RES in the U.S.



The author would like to thank the NHA and its members for funding and actively participating in this study. Special acknowledgments go to NHA leaders Rick Miller (HDR/DTA), Andrew Munro (Grant County PUD), Linda Church Ciocci (NHA) and Mark Garner (Voith Hydro). Other team members from Navigant who contributed to this study include Lisa Frantzis, Haley Sawyer, Charles Haddon, Ann Kurrasch, Kreg McCollum, Jay Paidipati, and Shalom Goffri.

  1. Feasibility Assessment of the Water Energy Resources of the US for New Low Power and Small Hydro Classes of Hydroelectric Plants 2006, DOE-ID-11263 produced by Idaho National Labs for the U.S. Department of Energy.
  2. Assessment of Waterpower Potential and Development Needs. Update 2009, EPRI.
  3. MMS, Technology White Paper on Ocean Current Energy Potential on the Outer Continental Shelf, 2006
  4. Florida Atlantic University, Center for Ocean Technology, Ocean Current Estimates
  5. Bedard, R., et al. North America Tidal InStream Energy Conversion Technology Feasibility Study, EPRI TP 009 − NA, June 11, 2006.

Rakesh Radhakrishnan, Ph.D., is managing consultant for Navigant Consulting Inc.


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