Can U.S. Hydropower Compete in a New Energy Era – Yahoo Finance

Report on the State of U.S. Hydropower and its Alignment with Sustainable Development Goals

Introduction: Hydropower’s Role in Achieving SDG 7

Hydropower remains the United States’ largest source of renewable energy, representing a cornerstone of the nation’s strategy for achieving Sustainable Development Goal 7 (Affordable and Clean Energy). Its historical development since the late 1800s has established a significant, albeit aging, infrastructure base for clean electricity generation.

• In 2024, hydropower accounted for 27% of the total utility-scale renewable electricity generation in the U.S.
• This contribution represented 5.86% of the total utility-scale electricity production nationwide.

However, a significant opportunity for expanding this contribution to SDG 7 exists, as fewer than 3% of the more than 90,000 dams in the U.S. are currently utilized for power generation. The majority serve other critical functions related to water management, flood control, and recreation, aligning with SDG 6 (Clean Water and Sanitation).

Challenges to Sustainable Infrastructure and Climate Action (SDG 9 & SDG 13)

The continued viability of U.S. hydropower is at a critical juncture, facing challenges that threaten its contribution to SDG 13 (Climate Action) through the provision of clean energy. These challenges center on aging infrastructure, economic pressures, and complex regulatory frameworks.

Infrastructure Modernization and Investment

A substantial portion of the U.S. hydropower fleet is aging, with an average dam age of 65 years. This necessitates significant investment to maintain operational capacity and align with modern standards for sustainable infrastructure as outlined in SDG 9 (Industry, Innovation, and Infrastructure).

1. Funding Gap: The Bipartisan Infrastructure Law provides $753.6 million for hydropower, but this amount is primarily sufficient for maintenance rather than the large-scale expansion and modernization required.
2. Relicensing Wave: Over the next decade, nearly 450 hydroelectric plants, representing over 16 GW of capacity, are due for relicensing. This process requires substantial capital investment to meet new standards.

Environmental and Economic Hurdles

The relicensing process presents hurdles that intersect with multiple SDGs, requiring a balance between energy production, environmental protection, and economic feasibility.

• Alignment with SDG 15 (Life on Land): Many facilities were built without modern environmental considerations. Upgrades to meet current standards, such as enabling unobstructed passage for fish and wildlife, are essential for protecting biodiversity but are extremely costly for operators.
• Economic Competitiveness: The declining costs of natural gas, wind, and solar power have made it increasingly difficult for capital-intensive hydropower upgrades to compete economically, challenging its role in providing affordable energy under SDG 7.
• Regulatory Complexity: The absence of a single federal agency with full authority over hydropower creates a complex and lengthy bureaucratic process for relicensing, averaging eight years. This regulatory inefficiency acts as a barrier to investment in sustainable infrastructure (SDG 9).

Policy and Partnerships for the Goals (SDG 17)

Addressing these challenges requires concerted action through government policy and strategic partnerships, reflecting the principles of SDG 17 (Partnerships for the Goals).

Government Initiatives

Recent policy developments aim to create a more favorable investment climate for hydropower modernization.

• The U.S. Treasury Department has expanded a renewable energy rule, allowing hydropower facilities to qualify for federal investment tax credits if they reinvest at least 80% of their market value into infrastructure upgrades.
• Bipartisan legislative efforts, such as the One Big Beautiful Bill Act, aim to preserve access to key federal tax credits, providing greater certainty for investors.

Corporate Sector Engagement: A Case Study

A landmark $3 billion deal between Google and Brookfield Asset Management exemplifies the power of private sector partnerships in advancing clean energy goals. This collaboration will provide up to 3 GW of hydropower for Google’s data centers and includes commitments to upgrade and relicense the associated facilities. This initiative directly supports SDG 7 and SDG 9 and serves as a model for corporate action in the energy transition.

Outlook and Strategic Recommendations

The future of U.S. hydropower depends on overcoming the financial and regulatory barriers to modernization. The U.S. Energy Information Administration (EIA) projects a 7.5% rise in hydropower generation in 2025, reaching 259.1 billion kilowatt-hours, but this positive trend is contingent on sustaining the existing fleet.

Conclusion and Path Forward

To ensure hydropower continues to play a significant role in achieving the Sustainable Development Goals, a strategic focus on the following areas is required:

• Mobilize Investment: Substantial public and private funding must be directed toward upgrading aging facilities to meet modern environmental and safety standards, thereby securing their contribution to SDG 7, SDG 9, and SDG 13.
• Streamline Regulation: Reforming the relicensing process to provide clear, efficient, and predictable oversight is critical to reducing investment risk and accelerating the modernization of clean energy infrastructure.
• Promote Partnerships: Encouraging further collaborations between government, industry, and the private sector, as seen in the Google-Brookfield deal, is essential for financing the transition to a more sustainable and resilient energy system.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The article on hydropower in the United States connects to several Sustainable Development Goals (SDGs) by discussing renewable energy production, the state of aging infrastructure, financial investments, environmental considerations, and public-private partnerships.

• SDG 7: Affordable and Clean Energy: The core theme of the article is hydropower, which is identified as the “country’s largest source of renewable energy” and a form of “clean electricity.” The discussion revolves around its generation capacity, challenges, and future potential.
• SDG 9: Industry, Innovation and Infrastructure: The article heavily emphasizes the state of U.S. hydropower infrastructure. It notes that many facilities are “getting older and more expensive to maintain,” with an “average age of 65 years,” and require significant investment for upgrades and relicensing.
• SDG 13: Climate Action: By focusing on a major source of “clean energy,” the article implicitly addresses SDG 13. Hydropower, as a low-carbon electricity source, is a key component in strategies to combat climate change by reducing reliance on fossil fuels.
• SDG 14: Life Below Water: The article touches upon the environmental impact of dams, mentioning the need for “upgrading old facilities to enable the unobstructed passage for fish and other wildlife” as a requirement for relicensing. This directly relates to protecting aquatic ecosystems.
• SDG 17: Partnerships for the Goals: The article highlights a significant partnership to advance hydropower, citing the “$3 billion hydropower deal between Google and Brookfield Asset Management” to provide clean energy for Google’s data centers.

2. What specific targets under those SDGs can be identified based on the article’s content?

Based on the issues discussed, the following specific SDG targets can be identified:

1. Target 7.2: By 2030, increase substantially the share of renewable energy in the global energy mix.
   • The article directly discusses the contribution of hydropower, stating it “contributed 27 percent of total U.S. utility-scale renewable electricity generation and 5.86 percent of total utility-scale electricity production in 2024.” It also projects a rise in generation, supporting the goal of maintaining or increasing the share of renewable energy.
2. Target 7.a: By 2030, enhance international cooperation to facilitate access to clean energy research and technology, including renewable energy… and promote investment in energy infrastructure and clean energy technology.
   • The article points to efforts to promote investment, such as the Bipartisan Infrastructure Law providing “$753.6 million” for hydropower and the Treasury Department’s expansion of a renewable energy rule to make upgraded facilities “eligible for larger federal write-offs.”
3. Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure… to support economic development and human well-being.
   • The focus on relicensing and upgrading almost “450 hydroelectric plants” that are, on average, 65 years old speaks directly to the need to improve the quality, reliability, and sustainability of critical energy infrastructure.
4. Target 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes.
   • The article details the need for “millions of dollars to be spent on upgrades to qualify for a new operating permit,” including fixing turbines and meeting modern environmental standards, which aligns with retrofitting infrastructure to be more sustainable.
5. Target 14.2: By 2010, sustainably manage and protect marine and coastal ecosystems to avoid significant adverse impacts… and take action for their restoration.
   • The requirement for relicensing to include upgrades for “the unobstructed passage for fish and other wildlife” is a direct action to manage and mitigate the adverse impacts of dam infrastructure on aquatic ecosystems.
6. Target 17.17: Encourage and promote effective public, public-private and civil society partnerships, building on the experience and resourcing strategies of partnerships.
   • The article provides a clear example of a private-private partnership with the “$3 billion hydropower deal between Google and Brookfield Asset Management,” which aims to upgrade and relicense facilities to secure a clean energy supply.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, the article contains several quantitative and qualitative indicators that can be used to measure progress:

• Indicator for Target 7.2 (Renewable energy share): The article provides specific figures, such as “5.86 percent of total utility-scale electricity production in 2024” from hydropower and the projection that it will “contribute around 6 percent of U.S. electricity production” in the coming year. These percentages are direct measures of the share of renewable energy.
• Indicator for Target 7.a (Investment in clean energy): Financial flows are explicitly mentioned as indicators of investment. Examples include the “$753.6 million” from the Bipartisan Infrastructure Law, the “$3 billion” Google-Brookfield deal, and policy-based incentives like federal tax credits.
• Indicator for Target 9.1/9.4 (Infrastructure quality and upgrades): The number of facilities needing upgrades (“almost 450 hydroelectric plants”), their average age (“65 years”), and the total capacity due for relicensing (“over 16 GW of electricity in total”) serve as baseline indicators for the scale of infrastructure renewal required. The amount of investment made in these upgrades would be a progress indicator.
• Indicator for Target 14.2 (Ecosystem protection): A qualitative indicator is the inclusion of environmental standards in the relicensing process. Progress could be measured by the number of relicensed facilities that have successfully implemented upgrades for “unobstructed passage for fish and other wildlife.”
• Indicator for Target 17.17 (Partnerships): The formation and value of partnerships serve as a direct indicator. The “$3 billion” deal between Google and Brookfield is a specific, measurable example of a partnership aimed at sustainable development.

4. Table of SDGs, Targets, and Indicators

Source: finance.yahoo.com