CRES will be contacting renewable energy businesses throughout the New England region to ask questions about clean energy technology. We intend to shed light on the clean energy leaders within the region and promote the expansion of clean energy technology across the nation.
David Markley, Co-Founder and CEO
Business Location: Maine
Q&A
1) What is the name of your business and what do you do?
Surge Hydro is the name of our business and we provide energy as a service in form of hydro power to municipalities and towns that need help with such. Maine in general has kind of been a leader in hydro power, 25% of their electricity is provided from it. They have a history in hydro due to kind of mill buildings and the old infrastructure of converting to hydro power and using that as a renewable resource. As far as new developments, the big 50,000 foot-level look, there’s 80,000 dams across the country that aren’t currently generating renewable energy. So there’s the opportunity for us to electrify all of those and provide a substantial amount of hydro power to our nation’s infrastructure. In Maine, there’s over 400 that we can use our technology on but about 800 non-powered dams in total. And so that is the opportunity we have kind of just in Maine. And then across New England there’s ample more, in the realm of 8,000 just in the New England area.
2) How has New England and/or the United States’ emerging clean energy industry affected your business?
With the nature of energy in general and how heavily regulated it is, it really is kind of a top down and New England has positioned themselves as a leader in the renewable energy category with a lot of the aggressive renewable energy percentages, as they’re trying to make at the state level and then how that translates to municipal spending and smaller utilities trying to make those goals even down to like a regional or township level. The regulations have really spurred a lot of that and then New England collectively has taken a pretty aggressive stance, and so that is what is driving a lot of the innovation and change in the renewable energy space. A lot of wind development, a lot of hydro power just because you don’t have the ample sunshine that some of the other parts of the country do. So yeah, New England has been one of the best, if not the best location for renewable energy hardware companies looking to produce more clean renewable energy.
3) How many of these damns are municipally owned?
So what’s interesting is that majority of the dams that you see as you go west are owned by the Army Corps of Engineers. And so all the dams out in California, Washington that area there pretty much federally owned and operated. But New England, it presents an interesting opportunity ’cause the majority of the dams are owned by municipalities or local ownership from people who were running old potato or leather board manufacturers or axe handle manufacturing companies that were using the water as their means to do their manufacturing. So I don’t have exact specifics for you but I would say 80% are split between municipal and privately held. And so those are the people that we’re actively working with. We are ourselves private dam owners. We own five dams in Belfast, Maine, and that’s been our research and testing laboratory for a lot of the trial and error that we’ve done with developing our new technology.
4) Has your business undergone any efficiency measures/ what has your business done or plans to do in order to reduce energy costs?
Yes. So as far as the company goes, we provide hydro power directly to the grid. And so everything that we don’t send to the grid and that we consume at our facility at our office is money that we don’t put in our pockets. And so we’re constantly trying to increase our efficiency. We’re trying to reduce our energy footprint so that we can generate more revenue and put more energy on the grid. But aside from that, hydro power is the most efficient form of renewable energy out there. The turbines average in the 90% extraction rate, which most of the other technologies can’t even come close to touching. And so in addition to being one of the most efficient, it’s also one of the most predictable. You can pretty accurately forecast when you’re going to have a lot of water and then you can use your lakes and your ponds as reservoirs for either emergency storage or it’s essentially like the most efficient battery available. So those are things that really attracted us to the hydro power space to begin with. And so we are always looking at taking advantage of the most efficient solutions out there.
5) What role has state or federal incentives played in helping to spur growth in your business?
That’s an interesting question. So, you could make the argument that RGGI is really more focused on energy efficiency and not to do with green energy production. As far as generating more green power, it’s really just RPS, the marks that people have dedicated themselves to, which force them to go out and procure more green electricity. And then also in terms of renewable energy credits and so the Recs that you can get associated with new power being brought online, those two which ultimately translate into more dollars per kilowatt hour, that’s really what drives the need. Because it raises the floor for what your LCOE can be. And so that enables more technologies to take advantage of the space.
6) What do you see as the future of clean technology?
At some point, there has to be a tipping point. And what I would believe is that it will cause us to reevaluate the incentives that we have and transition from an efficiency kind of incentivized program to a renewable energy delivery. And then more incentives for wind, solar, hydro, and then hydro leading the way with that, because it is the most efficient and it is the most predictable and it’s also the best storage mechanism. And then beyond that, converting everything to batteries and getting the power on demand when you want it from any source. I think those are the trends that we are watching and paying attention to.
7) Why do you think it is important for elected officials and other business to learn more about your field?
Yeah. So, particularly for small hydro power, 75% of a project’s cost can be purely the regulatory permits and the bureaucracy around permitting a project. And so that’s not actually breaking ground, that’s not development cost, it’s not the technology itself, a majority of it is… And for good reason, we don’t want massive industrial projects that completely wipe out reservoirs. But if the model needs a facelift, we optimize at smaller scale and to enable developers to actually pursue these types of projects realistically. What we would like to see, we would love to be at the table to discuss how we can make the best of both worlds, make tradeoffs as far as costs or maybe change the incentives formats that we pay an annual fee per project as opposed to a giant lump sum at the beginning of every project or some sort of certification process where once you’re certified, you can hand out these permits and therefore reduces the amount of agencies, etcetera, that are involved. These are just some of the things that we’ve discussed and thought about but would love to explore these ideas further. So that’s the micro pitch and then more of the macro level is… There seems to be some attachment to we are an oil driven economy, we always have been, always will be and there’s ample scientific research and otherwise that would suggest that the longer we hold onto that way of thinking, the more catastrophic it will be. The harder it will be to climb out of the hole that we’re creating for ourselves and the more expensive it will be as we kick the can down the road. I would encourage people to look at their policies, opt for more renewable sources if they can. And if not, figure out really where their energy is coming from and the cost associated.