Colorado is embarking on a federally backed $3.4 million experiment to transform the flood irrigation farmers use to grow crops: tapping diverted water more efficiently and generating electricity.

Agriculture Secretary Tom Vilsack kicked off the “small hydropower” project Monday in Denver and announced $235 million in new federal grants nationwide to spur innovation around water, soil and drought.

The Colorado experiment aims to pressurize flows of agricultural water, producing hydro-power, and then deliver water more precisely to crops using sprinklers. If successful, this is envisioned as a way to help reduce the 85 percent share of water required to sustain agriculture in semi-arid Colorado and other western states.

“This is not only possible. It is going to happen,” Vilsack said in an interview. “It is going to provide for more efficient irrigation, which is important as we deal with increased scarcity. It also is going to deliver hydropower, a renewable energy resource.”

The federal Regional Conservation Partnership Program grants, building on $394 million awarded in January, are designed to encourage local agriculture leaders to work with innovators at private companies, universities, non-profit groups and government agencies to solve environmental challenges. Congress created the program last year and funds it under the Farm Bill.

In Colorado, state agriculture officials are coordinating the Pressurized Small Hydropower project, which will receive $1.8 million in federal funds and assistance through the Natural Resources Conservation Service, in addition to $1.6 million from American Rivers, the governor’s energy office, the Colorado Rural Electric Association and others.

“As water drops downhill, there’s a lot of energy in it,” Colorado Agriculture Commissioner Don Brown said at a signing ceremony. “We’re going to capture some of that energy.”

Circular sprinkler systems that minimize water waste will be installed on farm fields that formerly were flooded, Brown said. Significant amounts of water will be saved, but it’s too early to assess how much, he said.

Vilsack said more than 600 groups have applied for conservation grants with 115 funded so far. Teaming with the private sector amplifies what the government could do, he said. “We need to figure out ways to use water more creatively and more efficiently.”

Small hydropower systems, typically generating 2 megawatts or less, have emerged as a way to supply electricity for power grid without emitting heat-trapping greenhouse gases, which scientists link to climate change. They rely on diversion of a small portion of a river or are constructed at dams.

Bruce Finley: 303-954-1700, bfinley@denverpost.com or twitter.com/finleybruce