| Planning, Developing and Operating Small Hydro
Planning small hydro projects requires many stages of technical and
financial study to determine if a site is technically and economically
feasible. The viability of each potential project are very site specific.
Power output depends on flow of water and the height of the drop of
the available water. The amount of energy that can be generated depends
on the quantity of water available and the variability of flow throughout
the year. The economics of a site depends on the power (capacity) and
energy a project can produce, if the power can be sold, and the price
paid for the power sold. In a remote community the value of power generated
for consumption is generally significantly more than for systems that
are connected to a central grid. However, remote communities may not
be able to use all the available energy from the small hydro plant or,
may be unable to use the energy when it is available because of seasonal
variations in water flow and energy consumption.
Although most small-hydro projects are different, the following steps provide
a good outline of the main stages in the development and operation of a project:
- Reconnaissance surveys and hydraulic studies
This first phase of work frequently covers numerous sites and includes:
map studies; delineation of the drainage basins; preliminary estimates of
flow and floods; and a one day site visit to each site (by a design engineer
and geologist or geotechnical engineer); preliminary layout; cost estimates
(based on formulae or computer data); a final ranking of sites based on
power potential; and an index of cost.
- Pre-feasibility study
Work on the selected site or sites would include: site mapping and geological
investigations (with drilling confined to areas where foundation uncertainty
would have a major effect on costs); a reconnaissance for suitable borrow
areas (e.g. for sand and gravel); a preliminary layout based on materials
known to be available; preliminary selection of the main project characteristics
(installed capacity, type of development, etc.); a cost estimate based on
major quantities; the identification of possible environmental impacts;
and production of a single volume report on each site.
- Feasibility study
Work would continue on the selected site with a major foundation investigation
programme; delineation and testing of all borrow areas; estimation of diversion,
design and probable maximum floods; determination of power potential for
a range of dam heights and installed capacities for project optimisation;
determination of the project design earthquake and the maximum credible
earthquake; design of all structures in sufficient detail to obtain quantities
for all items contributing more than about 10 per cent to the cost of individual
structures; determination of the dewatering sequence and project schedule;
optimisation of the project layout, water levels and components; production
of a detailed cost estimate; and finally, an economic and financial evaluation
of the project including an assessment of the impact on the existing electrical
grid along with a multi-volume comprehensive feasibility report.
- System planning and project engineering
This work would include studies and final design of the transmission system;
integration of the transmission system; integration of the project into
the power network to determine precise operating mode; production of tender
drawings and specifications; analysis of bids and detailed design of the
project; production of detailed construction drawings and review of manufacturer's
equipment drawings. However, the scope of this phase would not include site
supervision nor project management, since this work would form part of the
project execution costs.
- Financing
The process of arranging financing for small-hydro projects is often difficult.
The developer has to complete two steps to realize their development plans.
The first is to obtain a contract with a utility or organisation which will
purchase the produced electricity. With this contract in place the next
step is to negotiate a bank loan or other source of financing. However,
many banks lack knowledge of small-hydro projects and have no experience
with this type of loan. In recent years some banks have acquired the necessary
experience and now routinely provide loans for small-hydro projects.
- Ownership and Maintenance
Key factors for sucess include:
- Realistic assessment of project costs and benefits (good assessment
methodologies are available)
- Solid partnership with good management skills
- Experience within partnership
- Personal and corporate financial strength
- Knowledgeable financial institution (documentation available
for reference that addresses risk assessment)
- Design with special attention to operation and maintenance requirements
- Pro-active maintenance plan to minimise expense and downtime
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