On October 21, the Department of Energy (DOE)’s National Renewable Energy Laboratory (NREL) issued An Examination of the Hydropower Licensing and Federal Authorization Process, in which it examined the various statutory and regulatory requirements applicable to hydropower projects, and how those requirements protect water quality, fish and wildlife, among other things, they can also add to the time and cost of licensing. The report provides quantitative and qualitative analyses, considers the perspectives of developers and regulators, and addresses various studies on hydropower licensing timelines and costs, both in the United States and in other hydropower-producing countries. The report does not propose specific recommendations, but makes a series of key findings that it suggests can be used by policymakers and regulators to engage in informed discussions with project developers and other hydropower stakeholders.
The report’s key findings include:
- Greater environmental complexity and mitigation can lead to longer licensing timelines, particularly during relicensing. The average timeline to obtain an original license is 5 years, and the average time to obtain a new license following relicensing is 7.6 years;
- Licensing costs often disproportionately impact new and/or smaller projects, while larger projects can absorb costs through economies of scale;
- Licensing timelines are frequently prolonged by negotiations over environmental studies, including whether existing studies are sufficient to address potential project impacts on resources or if new studies, specific to the project site, are needed;
- Incomplete or inadequate information can lead to disagreements and extended timelines, including for water quality certifications under the Clean Water Act and consultation under the Endangered Species Act;
- FERC’s Integrated Licensing Process (ILP) is the shortest and least-variable licensing process, and is effective at holding developers and regulators to a stringent timeline;
- When compared to hydropower licensing in other countries, the FERC-led process in the United States involves the most agencies and opportunities for tribal and public input.