Pending federal legislation will make small agricultural hydropower development more economically feasible. Colorado is seizing the opportunity to increase agricultural income by decreasing energy costs through small hydro development.
By Kurt Johnson and Lindsay George
George Wenschhof, a cattle rancher in Meeker, Colo., figured out how to harness the mechanical energy in his newly installed center pivot sprinkler irrigation system to power his ranch through the installation of a 23-kW hydropower facility that uses equipment supplied by turbine manufacturer Canyon Hydro in Deming, Wash. Wenschhof, who describes himself as holding a degree in "cowboy engineering," installed a hydroelectric turbine-generator unit to offset the electrical load of his irrigation system and all of his ranch operations. A case study of this work developed by the Colorado Energy Office notes that the hydroelectric project is saving Wenschhof $10,000 to $13,000 per year in avoided electric bills.
Small agricultural hydropower projects like Wenschhof's will become cheaper and easier to complete once pending federal legislation is enacted. Pending federal small hydro permitting reform legislation will eliminate requirements that have stifled small hydro development in the U.S. for decades, thus making agricultural small hydropower projects much more economically feasible to develop.
On May 8, 2013, the Senate Energy and Natural Resources Committee unanimously approved two pieces of legislation aimed at making the regulatory process more efficient for small hydropower. They are: H.R. 267, the Hydropower Regulatory Efficiency Act, and H.R. 678, the Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act, along with their Senate companion bills.
"Hydropower has really become the gold standard for collaboration in energy," said Senate Energy Committee Chairman Ron Wyden (D-OR). Wyden signaled his expectation that the bills could move through the Senate floor without controversy.
"I expect these hydropower bills will be our first energy-related public laws this Congress," added Energy Committee Ranking Member Lisa Murkowski (R-AK).
Both of the bills mentioned above are aimed at dramatically simplifying federal permitting requirements for small hydropower. For many small hydro systems, the costs of complying with federal permitting requirements can exceed the cost of the turbine and generator equipment. Federal permitting costs - combined with the permitting time of six to 18 months for even the smallest projects - mean that many potential small agricultural hydro systems have not been built. Elimination of those requirements through pending federal reform legislation will provide a big boost to small hydro development nationwide, not just in Colorado.
Small hydro in Colorado agriculture
The Colorado Department of Agriculture (CDA) is developing a small hydropower "road map" for the agricultural sector as part of its efforts to support renewable energy and energy efficiency within the agricultural community. CDA recently embarked on an effort to collect, aggregate and analyze market research data on the opportunities, costs, benefits and barriers to the application and deployment of small hydropower technologies in agricultural operations throughout Colorado.
Through this small hydro "road map," which is expected to be completed by December 2013, CDA plans to focus its future resources on the implementation of small hydropower technologies to benefit Colorado agriculture. One example of this involves hydro development utilizing existing ditch drops.
Many farmers may hesitate to invest in energy projects given a business environment with unpredictable risks, such as weather, that can impact their margins dramatically from year to year. But if small hydropower is made sufficiently attractive through incentives and educational outreach, its development will gain traction in the Colorado agricultural community.
Federal incentives that can support small hydropower projects include grants and loan guarantees that are available through the U.S. Department of Agriculture, as well as project grants that are available through the Natural Resources Conservation Service (NRCS).
The Colorado Energy Office recently developed a Small Hydro Guidebook and also completed an analysis of energy efficiency and renewable energy opportunities in the agricultural sector.
Colorado also offers state financial incentives to support small hydropower. For example, the Colorado Water Resources and Power Development Authority (CWRPDA) offers a feasibility grant program that can provide up to $15,000 in 50% cost-shared funds to support small hydro feasibility studies and permitting. CWRPDA also offers a small hydropower loan program that can lend up to $2 million at a rate of 2% for project construction. Eligible borrowers for these two CWRPDA programs include water, water conservancy and irrigation districts.
In addition, the Colorado Water Conservation Board (CWCB) offers a hydropower loan program for agricultural borrowers that can finance engineering and construction of hydroelectric projects, with loan terms of 30 years at an interest rate of 2%.
One example of a group that is taking advantage of these funding opportunities is the Tri-County Water Conservancy District in western Colorado. The district is currently building an 8-MW hydroelectric project at Ridgway Dam on the Uncompahgre River utilizing $11 million in low-interest loan financing from both CWRPDA and CWCB.
Assessing opportunities in agricultural hydropower
Although there has not been a comprehensive nationwide assessment of the magnitude of the opportunity for agricultural hydropower applications, the state of Colorado has begun to explore the opportunity. In 2011, researchers at Colorado State University in Fort Collins conducted a field study in which 36 canals were investigated for their hydroelectric generating potential. The research documented a total of 233 structures, including weirs and drops, of which 70 were identified as potential hydropower sites.
In addition, research just getting under way by CDA will identify the most achievable opportunities for agricultural small hydro development. These include dams, ditches and canals, and irrigation systems, including center pivots. For more information on this type of hydro development, see the sidebar on page 84.
New technologies for agricultural hydropower
In recent years, there has been a proliferation in the development of technologies that can effectively capture the energy available in low-head hydro applications. A 2011 report by Applegate Group, commissioned by CDA, highlighted more than 20 hydro turbine technologies that hold potential for use in irrigation infrastructure. This study also identified typical structures that appear in irrigation systems and attempted to pair technologies with those structures.
There can be many challenges to successfully implementing a small hydropower project in an irrigation canal - including the seasonality of irrigation diversions, water rights, locations that are remote from power service, and the variable nature of the flow and available releases.
In addition, however, there are many opportunities afforded by the existing, engineered infrastructure of irrigation systems. For example, pipelines and drop structures are already in place, and many of these are in need of modernization. Hydropower facilities could be incorporated into existing irrigation infrastructure during heavy maintenance work. Irrigation system operators are usually interested in finding new revenue sources that can either reduce shareholders' annual fees or fund irrigation system improvements.
In September 2011, the U.S. Department of Energy and the U.S. Department of Interior awarded nearly $12.5 million in funding for research and development projects to advance sustainable small hydropower technologies. A number of the technologies that received this funding are low-head turbines that are planned to be tested and implemented in irrigation canals across the western U.S.
Increasing agricultural income by reducing energy costs
As was highlighted in recent analysis commissioned by the Colorado Energy Office, electricity purchases can represent a significant portion of operational costs for agricultural operations. In fact, surveys of farmers in Colorado have indicated that energy expenses are generally about 7% of their total operating expenses.
In the farming sector, irrigation and its associated electricity costs are one of the largest areas of energy consumption. Colorado farmers reported spending an average of about $33,000 per year on electricity, while spending an average of $16,000 on diesel and about $8,000 on gasoline. Electricity costs to power irrigation pumps typically make up more than 50% of farmers' total electricity expenses. In 2008, electricity expenses for the entire Colorado agriculture sector were estimated to be $137 million. Development of small hydropower facilities can potentially help reduce those costs.
If the state of Colorado's new efforts to support the development of agricultural hydropower prove to be effective in reducing electricity costs, they may serve as a model that can be replicated nationwide.
Johnson, Kurt, "Big Progress for Small Hydro Permitting Reform," Hydro Review, Volume 32, No. 3, April 2013, pages 32-40.
Robinson, J. Mark, "Six Steps to Advancing Hydropower Development," Hydro Review, Volume 32, No. 3, April 2013, pages 8-14.
Agricultural Hydropower without Electricity
The owner of Bear River Ranch, located near Steamboat Springs in western Colorado, installed a hydro-mechanical system to power the ranch's center-pivot irrigation system. As reported in a Colorado Energy Office case study, the system uses the power of falling water to directly drive and pressurize the center pivot, eliminating the need for electricity and significantly reducing operating expenses. Center pivot systems save both water and labor associated with irrigation and can increase crop yields.
The 5.2-kW turbine, installed in 2012, uses 126 feet of head and 560 gallons per minute to produce power to drive the center pivot's hydraulic pump. The $13,000 project was funded through $6,000 in support from the Natural Resources Conservation Service (NRCS) Environmental Quality Incentives Program (EQIP), yielding out-of-pocket cost to the ranch of ,000 and an expected payback of slightly over three years.
EQIP provides financial and technical assistance to farmers and ranchers for the planning and implementation of natural resource conservation efforts, including energy conservation. During 2011, EQIP allocated more than $26 million for nearly 800 projects in Colorado. For Bear River Ranch, the NRCS grant lowered installation costs enough to make NRCS the only outside source of funding needed to complete the project, which avoided $22,000 in grid interconnection costs and $2,100 in estimated annual electricity costs. The project ran through the 2012 irrigation season with no problems and increased crop yields - using less water than had historically been used with flood irrigation.
Many ranchers in the area have expressed an interest in installing the same type of system. The local NRCS office is hoping to offer design services, with the hope that this type of system can be replicated throughout Colorado. For additional information, see the Bear River Ranch case study on the Colorado Energy Office website at www.colorado.gov/energy.
Kurt Johnson is chief executive officer of Telluride Energy. Lindsay George, P.E., PhD, is a project engineer with Applegate Group.