Biden Boosts Hydroelectric Upgrades With Tax Break
The Biden administration has extended a tax break to hydroelectric facilities, aiming to boost reinvestment in upgrades. This move comes as the average age of U.S. dams reaches 65 years, with many lacking modern infrastructure for fish and wildlife passage.
The Treasury Department's decision grants hydroelectric facilities the same tax flexibility as wind and solar industries. This is crucial, as the relicensing process for these facilities is lengthy and costly. On average, it takes eight years to relicense an existing hydropower facility, compared to just 18 months for a new nuclear facility.
Nearly 450 hydroelectric stations, totalling over 16 gigawatts of generating capacity, are scheduled for relicensing in the next decade. The process involves multiple state and federal agencies, often leading to delays and additional costs for dam owners. Without long-term licenses, hydroplant owners may be reluctant to invest in upgrades, as warned by the National Hydropower Association's chief executive. The Kelley's Falls Dam in Manchester, New Hampshire, shut down last year, highlighting the potential loss of power if these facilities are not relicensed.
Hydroelectric facilities may also face additional financial burdens during relicensing. They might be required to fund unrelated projects or programs. Despite this, no specific companies have been mentioned as profiting from the licensing process or assisting with financing costs.
The Biden administration's tax break aims to encourage reinvestment in hydroelectric facilities, helping to modernise aging infrastructure and maintain power generation. However, the lengthy and costly relicensing process remains a challenge, with the potential loss of gigawatts of power if facilities shut down. As the relicensing process continues, it's crucial to address these challenges to ensure the sustainability of the U.S. hydroelectric industry.
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