New DOE Report Identifies Solutions To Five Major Gaps in U.S. Hydropower Supply Chain (2024)

Photo from Krysta Rasmussen via the 2023 Make a Splash Photo and Video Contest

Drawing on feedback from hydropower industry stakeholders gathered by DOE’s Water Power Technologies Office (WPTO), researchers identified five major gaps:

• Unpredictable and variable demand signals for materials and components.In general, hydropower systems have exceptionally long lives (e.g., 30–50 years), so replacements and refurbishment schedules have cycles that are years or decades.
• Severely limited or nonexistent domestic suppliers for materials and components.Only one or two—or in some cases, no—domestic suppliers exist for materials and components.
• Federal contracting procedures and domestic content laws. There are several procurement regulations and/or general practices that inhibit the development of the domestic hydropower supply chain.
• Foreign competition, foreign subsidies, and ineffective trade policies.Discussions with companies in the hydropower industry highlighted inequitable competition from foreign companies and ineffective trade policies as issues in the hydropower supply chain.
• Shortage of skilled workers.Hydropower manufacturing and upstream support industries suffer from a significant lack of expertise in the workforce. As these industries have been offshored over the last 40 years, skilled workers have retired or moved to other industries.

To address the gaps in the domestic hydropower supply chain, the report recommends to:

• Lead with the federal fleet to prime the development of an aggregated, consistent demand signal.Nearly 50% of the domestic hydropower fleet is federally owned. The potential demand signal from new federal facilities and refurbishments can be significant. Federal procurement processes should be evaluated to ensure that they are effective in developing the domestic supply chain while obtaining the hydropower and pumped storage hydropower equipment and services the federal fleet needs.
• Increase awareness of the domestic supply chain through the development of databases of domestic manufacturing and installations.Developing tools to predict demand is another way that WPTO can help both the federal and private fleets. Tools currently in development or undergoing enhancements include a database of domestic suppliers along the hydropower supply chain and a tool that allows users to see data (e.g., size, turbine type) on individual hydropower generation units.
• Work with other low-carbon technologies industries to create a significant, steady, and predictable demand signal for common materials.While the demand from the hydropower industry is in the billions of dollars annually, it is not sufficient to build out a domestic industry, especially in the material and component sectors.However, many of the components and materials used for hydropower systems (e.g., transformers and electrical steel) are also used in other clean energy technologies, such as wind energy, and for upgrading the electric grid. Industries such as ship manufacturing and defense supply chains also have commonalities with hydropower. These industries can be leveraged so that the aggregate demand can address gaps in their respective supply chains.
• Continue workforce development efforts.There are few low-carbon energy technologies that have as significant of a gap in educational programs as hydropower. In addition to expanding academic programs, there are also a vast array of experiential-type programs that can help raise the awareness of hydropower and its opportunities, including internships/fellowships/apprenticeships, experiential placements, job fairs, primary and secondary school competitions, collegiate competitions, programs that place veterans and other unique workforce segments, and more.