The Economics of Small Dams
Today’s guest blog is a part of the America’s Most Endangered Rivers® series, and it is about a river that we listed in 2012, the South Fork Skykomish River in Washington. Rich Bowers, the Hydropower Reform Coalition Pacific Northwest Coordinator, tells us about a new economic report that sheds light on the economics of dam building in the Northwest.
Why would utilities and developers pursue expensive new dams when conservation and more beneficial renewable opportunities exist? That’s a question I and other river advocates are pondering here in the Pacific Northwest. We currently have eight new small dam projects on the books for Idaho, Montana, Oregon, and Washington (two applications were filed just last week). Each requires building roads, transmission lines, a dam, powerhouse, and other support infrastructure that will remain for decades. It’s perplexing that we can have this many new proposals in a region that also leads the nation in removing old, uneconomic, and unneeded dams.
To market these dams, promoters claim they are environmentally benign, offer low emissions, and are necessary to produce the power we need. But the facts are a bit different. After more than a century of building dams, all of the productive, environmentally sound hydropower sites (more than 83,000 dams in the United States) have been developed. We have learned that all dams, regardless of size, degrade water quality, harm river-dependent species, and limit downstream recreation. We are continuing to realize that small dams, including new proposals in the Northwest, are expensive to build, generate little electrical benefit, and have huge impacts if built in the wrong place.
One prime example of an expensive, marginally economic, and ill-sited dam is the proposal at Sunset Falls on Washington’s South Fork Skykomish (Sky) River. Expected to cost more than $150 million to build, and to produce just one percent of the local utilities energy needs, the dam would remove up to ninety percent of the water from the river and from a series of magnificent waterfalls (Sunset Falls and the upstream Canyon Falls). One of just four state designated scenic rivers, the Sky is located in a truly magnificent setting, with a backdrop of Mt. Index and the North Cascades Range.
To grasp how this could ever pencil out, members of the Hydropower Reform Coalition (a partnership coordinated by American Rivers) completed an independent analysis of the dam. What we learned was that the dam would be an economic nightmare. It would cost 2.3 times what the local utility is predicting, and in low water years would operate at only 31% of its capacity. In other years, the dam will only generate power in the spring when power is not needed (spring in the Northwest is when existing dams are running and wind turbines are cranking also). When demand is high in the winter, this dam would operate far below capacity, and in the summer (the second highest demand period) the dam would shut down completely from mid-July to mid-October.
This is the fifth time Sunset Falls has been studied for hydro development, and in each instance poor economics and unacceptable impacts have kept the Sky free-flowing. Our analysis shows that this proposal would share the same fate and should not be built.
To learn more about the Skykomish River, about small dam economics, or to read the analysis of the Sunset Falls Project in Washington, go to the Hydropower Reform Coalition website.