Design Aspects and Sustainability of Mini/Micro Hydropower Schemes
Design Aspects and Sustainability of Mini/Micro Hydropower Schemes
Design Aspects and Sustainability of Mini/Micro Hydropower Schemes
Emmanuel G. Michael
Renewable Energy Projects Consultant
UNIDO
Head ranges
High 75 m & above
Medium 30-75 m
Low 3-30 m
Ultra low below 3 m
Pros
• Efficient energy source
– Takes little water
– Allows substantial distribution
• Reliable electricity source
• No reservoir required
• Cost effective energy solution
• Power for developing countries
• Integrate with the local power grid
Cons
• Suitable site characteristics required
• Energy expansion not possible
• Low-power in the dry period
• Small streams do not provide enough
force to generate power
• A large water reservoir is required
• Hydro generators will damage the local
ecosystem
• Micro hydro electricity is unreliable
• The electricity generated is low quality
• Hydro power is free
* Civil Works
- Intake/Diversion Weir.
- Power Channel.
- Desilting Tank.
- Forebay Tank.
- Penstock.
- Power House Building.
- Tail Race.
* Electromechanical Equipment
- Turbine.
- Generator & Controls.
- Power transmission & distribution network
Diversion Weir De-silting Tank Canal Headrace
FLINGER BEARING
+
Initial planning
+ Project procedures
Developers acceptability + Management and
exit strategy ownership model
+ +
+ Productive +
Quality of uses of
installation + Integration with electricity
other development +
+ activities + +
Continuity of + + + Tariff Affordability
water flow Reliability of structure to pay bills
electricity supply SUSTAINABLE
+ MHP
+ SYSTEMS +
DEVELOPMENT
+
Demand- +
supply balance Human resource Community
capacity participation
+ +
+
Willingness
Access to + to pay
spare parts + +
Plant
maintenance
+
Michael, Emmanuel G. (2008)
Monitoring and
follow up plans
+
Initial planning +
procedures
+ Project Management and
Developers exit acceptability + ownership model
strategy
+ +
+ Productive uses +
Quality of of electricity
installation + Integration with other
development activities
+
+ + +
Continuity of + + + Tariff Affordability to
water flow Reliability of structure pay bills
Electricity Supply SUSTAINABLE
MHP
+ SYSTEMS
+ DEVELOPMENT +
+
Demand-supply +
balance Human resource Community
capacity participation
+ +
+
Willingness to
Access to spare pay
+
parts
+ +
Plant
Maintenance
Michael, Emmanuel G. (2008)
• Government incentives (size, location,
ownership)
• Policy statements backed up with enforceable
regulations
• Energy regulatory authorities
• Renewable Energy promotion agencies, etc
• Regulation guiding development of projects
• Water rights/permits
• EIA clearance
• Power generation and use
• Land use permits, etc
• Simplifying the licensing procedures by possibly creating a
single window,
• Simplifying procedures when refurbishing abandoned sites,
• Creating a stable regulatory framework to reduce uncertainty,
• Implementing a price system that takes into account the positive
externalities of this energy source compared to fossil fuels.
• Investment subsidies
• Soft loans
• Energy Taxes
• Tax credits
• High feed in tariffs
• Supported price (green tariffs, green portfolios, tenders for
specific electricity sources).
Sl. Item Low Head High Head
No.
1. Capital Cost for SHP 1200 to 1500 $ pr 1200 to 1500 $
kW Per KW
2. Electricity Generation 4000-6000
Annual Cost of Generation 3500-5000
Depending upon water availability kWh/year/kW kWh/year/kW
a Interest 8% 10 %
b O&M 4% 4%
c Depreciation 3% 3%
d Insurance 1% 1%
Total 16 % 16%
Cost of Generation at 60% plf 3-4 cents $ per 6-8 cents $ per
kWh kWh
Cost category Percentage of
total
Civil work design, supervision, 10%
etc
Electromechanical equipment 10-15%
(Generator, control, other
electrical accessories)
Penstock 5-10%
Civil structures 40-60%
Turbine and valves 5-35%
Many financing structures available,
depending on the prevailing situation, some
are:
• Corporate Financing
• Sale before Construction
• Sale after Construction
• Investor Ownership Flip
• Leveraged Ownership Flip and Pay-As-You-Go ("PAYGO")
• Back Leveraged Structure
• Leveraged Lease
• Homeowner Model
• Green financing – carbon credits
• Cooperate financing
• Sale before construction
• Sale after construction
• Investor ownership flip
• Leverage lease
• Home owner model
• Green financing – carbon credits
– Regulated Market
• Kyoto CDM
– Agreements between industrialised country (Annex I) and
developing country (Non-Annex I)
– Follows strict procedures as per the Kyoto agreement
– Often good price for the CERs
– Unregulated market
• Voluntary agreements
• Follows relatively simple procedures
• Often low prices for the CERs
HYDROPOWER IS EFFECTIVE FOR CDM
72
• Which financing structure?
• Equity
• Debt
• Guarantee
• Relief/incentives
Equity
Sub Category Function Source
Guarantee
A commercial lender provides a loan to the
project entity (the importing entity), at below
market interest rates. The Export-Import bank
Exchange Rate Risk Export Credit Agency
provides compensation for the difference
between commercial rate and below-market
rate
Limited protection against risks of sovereign
Political Risk non-performance and against certain Force Word Bank
Majeure risks.
Relief /Incentives
Tax Credits
Tax Holidays Individual governments may offer tax incentives Host governments
Duty exemption
Other forms of
Connection, capacity, purpose, etc Host governments
incentives
Debt
Sub Category Function Source
Vendor
Debt…
Sub Category Function Source
Sophisticated investors
including insurance
Private Placement Direct sale of long-term debt / equity
companies, pension funds,
trading companies