Raya University

College OF Engineering And

Technology
Department Electrical And Computer Engineering
ECEg4233 : Hydropower Engineering
Lecture note:-Planning and Development process
BY:Letebrhan G.

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 OUTLINE

Hydropower development
Socio-economic analysis
Environmental analysis
Efficiency of hydropower

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 CHAPTER-2: Planning and Development Process
2.1 Hydropower Development

 The hydropower development cycle consists of three main

parts, each covering one of the three periods in the life of
hydropower project.
 Preconstruction
 Implementation
 Operation
Each stage takes the project a step forward in the
development cycle, based on the findings from the actual
and previous stages
 The major part of investigation, planning and designing
takes place in the first phase. 3
 Cont’d

 Normally, The investigation and planning of

hydropower projects pass several milestones before
projects are accepted for implementation.
 Each project has different physical properties and
conditions which have to be considered in order to
obtain a good basis for planning and design.

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 con’t
Project investigation, planning and designing are normally
organized in several consecutive studies:
 Resource studies
Resource inventories(lists)
 Resource ranking
Site specific studies
 Reconnaissance studies
Pre-feasibility studies
 Feasibility studies
oThe main purpose of resource inventory investigation is to
identify, register and catalog the hydropower resources
existing in the river basins; areas; districts; and provinces.
o The identified project sites are ranked according to size,
cost, electric demand, etc. 5
 Site Specific Studies
Reconnaissance studies
 The first stage of hydropower investigation is the
identification of projects.
 If this has not been done as part of the resource studies,
It must be carried out as part of the reconnaissance study.
 Such study are of preliminary natures, their purpose is
not to investigate projects in detail
 Being the first step of project planning, reconnaissance
studies are concerned with identification as well as
investigation of projects which are suitable to the stated
purpose (supplying of an identified power market with
electric power and energy).
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 Cont’d
The main objectives of this study may be:
 Assessment of demand or define electric power need
 Selection of candidate projects from the resource
inventories which will meet the electric power demand
 Investigation of candidate projects and project alternatives
to the best technical level (stated purpose)
 Technical ranking of candidate projects should be
prepared and well recorded.
 Selection of a suitable project from the list of investigated
candidate projects
 Estimation of preliminary cost and implementation
schedule
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 Cont’d
Main activities to be done in this stage
 Data collection
 Infrastructure information
 Power market and demand forecast, Hydrology, Topograp
 Geology and geotechnical engineering, Environmental
studies
 Socio-economic set up
 Office studies
 Power demand forecast, Flow regulation
 Head, environmental constraints
Field work and reconnaissance report
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 Pre-feasibility study (Preliminary Design)
 In this study one or more project alternatives are proposed and
studied before selection.
 The main purpose of pre-feasibility is to:
 Establish demand for the project
 Formulate a plan for developing this project
 Assess if the project is technically, economically and environmentally
acceptable
 Make recommendation for future action

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 CONT…
The following aspects are to be investigated during pre-feasibility study:
1. Hydrologic Study:
 Source extent amount, occurrence and variability of water.
 Present, past and future needs of water.
 Include opportunities for control and development of water.
 Quality of water in terms of its physical and chemical properties.
 Sediment quality and quantity.
 Existing water rights should be recognized for each and every
stakeholder.
2. Power studies: this considers a balance between power supply and
demand.
3. Layout Planning: a comprehensive layout plan will be prepared and
should be supplemented with sufficient number of drawings, which will
be used for preparation of the bill of quantities. 10
 CONT…
4. Geology and foundation engineering
5. Seismic (earthquakes) studies
6. Environmental studies
7. Estimation of cost
8. Economic and financial studies
9. Future investigation plan
10. Pre-feasibility report:
 A clear statement should be made in respect of technical, economical
and environmental feasibility of the project.
 It should give clear indication whether or not to study the project in
more detail.

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 Feasibility study
 Feasibility studies are carried out to determine the
technical, economical and environmental viability of a
project.
 This phase of investigation consists of a detailed study
which is directed towards the ultimate permission,
financing, final design and construction of the project under
investigation.
The main part of feasibility studies include:
1. Data Collection
*Socioeconomic data *Population
* Income distribution * Power market
*Tariffs * Hydrology
*Topography * Geology & enviroment
 CONT…
2. Project parameter estimation
* Power and energy estimation * Power system studies
* Water resources studies * Geology and foundation
conditions
* Seismic studies * Construction materials
*Existing infrastructure
3. Layout Optimization
*Project layout * Sediment and control
measures
* Number and size of units * Auxiliary equipment
*Transmission planning
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 CONT…
4. Environmental studies
 Assessment of environmental disturbance and their
mitigation measures
5. Engineering design
 Intake structure and sediment excluder
 Headrace and tailrace
 Powerhouse
 Dimensioning and preparation of specification for hydro
turbine and electromechanical equipment
 Construction facilities

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 CONT…
6. Estimation of project cost
 Project cost
 Operation, maintenance and replacement
 Environmental cost
 Construction planning and budgeting
 Contingencies and other costs
7. Economical and financial analysis
8. Future steps to be taken for the project implementation
9. Feasibility Report

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 Implementation Phase

 Project implementation is a multidisciplinary job which include:

 Approval and appropriation of funds
 Pre-qualification and hiring of consultants
 Detailed design
 Preparation of tender/contract documents
 Preparation of construction design and engineering design
 Preparation of operation manual
 Construction of civil works
 Preparation of completion report

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 Socio- Economic Analysis
Introduction
 Electricity is one of the most important inputs for economic
development of a country.
 An economic analysis is based on the benefits and costs from the
view point of society as whole, should include both tangible and
intangible benefits & costs in the analysis.
 While a financial analysis is viewed from the perspective of the
project sponsor, and states whether the tangible value of the output
of the project will be sufficient :-
 To amortize (pay back) the project loan
 To pay operation and maintenance cost
 To meet the interest on other financial obligation

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 Cont….
 A series of information documents must be assembled in an orderly
fashion before the analysis can be conducted:
 Information on the input of the project:- the capital cost of civil
engineering and electromechanical equipment; operating and
maintenance costs; useful life of the civil engineering and electro
mechanical equipment
 Information on project construction:- the period of construction, its
progress and data of putting into operation.
 Information on hydropower plant parameters:- peak power, installed
capacity and annual generation of the power plant.
 Information from market analysis:- the energy purchaser, rate of
capacity and energy(tariff), equipment and labor costs and obtained
from the planning department of the government.
 Information from financing:- fund sources and funding; its yearly
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installment (payment) during construction; interest rate
 Economic and Financial feasibility?

Economic feasibility is considered from the stand point of

the sponsor enterprise. when total benefits accruing from the
project exceed the total costs incurred, the project is
regarded as economically feasible.
Financial feasibility may be defined as a project’s ability to
obtain funds for implementation and repay their funds on a
self liquidating basis with acceptable risks at realistic interest
rates.
The final decision on whether or not hydropower scheme
should be constructed, based on the comparison of the
expected costs and benefits for the useful life of the project.

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 Economics of Power Generation
 The art of determining the per unit (i.e., one kWh) cost of production
of electrical energy is known as economics of power generation
(EPG).
 A consumer will use electric power only if it is supplied at reasonable
rate. Therefore, power engineers have to produce electric power as
cheap as possible.
 Some important terms in EPG:
I. Economic Life (useful life):
 It is the time during which the project can be operated normally
In general
 30-40 years for civil engineering
 15-25 years for turbine generator sets
 10-15 years for diesel sets.
 Renewal of the main parts of the equipment in civil engineering is
needed after that period.
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 CONT…
II . Depreciation:- The decrease in the value of the power plant
equipment and building due to constant use is known as depreciation.
This reduction in the value of plant every year is known as annual
depreciation.
III. Present worth:- is a sum of money at the present, the value of an
investment at the present, or the value of money expended in the future
discounted back to the present.
 The sum of these values represents the net present value(NPV).
IV. Future worth:- is a sum of money at a future time, the value of a
future investment, or the value of an expenditure at present discounted
out to that future time.
V. Interest:-is the price paid for borrowing money and expressed as a
percentage of the amount borrowed(discount rate). The social interest
rate are different in different countries; usually it takes around 10%.
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 VI . Annual Equivalent Value

This is the capital value of an annuity, the

cumulated present values of which (in n years)
equals the total initial capital cost, or the
capital is recovered in n years by an annual
equivalent value under a given discount rate.

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 2.1 Cost of Electrical Energy
The total cost of electrical energy generated can be divided;
i. Fixed cost:- is independent of maximum demand and units
generated.
eg. interest on capital cost of land and salaries of high officials.
ii. Semi-fixed cost:-is depends upon maximum demand but
independent of units generated. The maximum demand on the power
station determines its size and cost of installation.
Eg. Salaries of management, clerical staffs
(iii). Running cost:-is depends only upon the number of units
generated.
 is on account of annual cost of fuel, maintenance, repairs and
salaries of operating staff. Since these charges depend upon the
energy output, the running cost is directly proportional to the number
of units generated by the station.

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 Cash Flow Calculations
 A cash flow diagram is a graphic representation of cash flow with
magnitude of expenditures(costs) and (benefits)receipts plotted
vertically and time represented on the horizontal scale.
 The distance along the horizontal scale represents time.

Fig 2.1 Cash Flow diagram 24

 Cont’d
Let P = present value , F = future costs, A = annual equivalent value, i
= discount rate or interest rate and n = economic life or calculation
period.
1. The single payment future value equation
F=P(1 + i)n ,Where (1 + i)n it represents the capitalization
factor or the future value factor
2. The single payment present value equation
F
P= , Where (1 + i)n it expresses the depreciation suffered
(1+i)n
by future monetary fluxes when transferred to the present is call present
worth or present value factor
3. The uniform payment future value equation
[ 1+i n −1] [ 1+i n −1]
F=A , Where the future value factor with
i i
uniform payments ( the future value of a uniform series of A dollar
deposits)
 Cont’d
4. The sinking fund equations
In this method, a fixed depreciation charge is made every year and
interest compounded on it annually.
i 𝑖
A=F* ,Where the sinking fund factor (uniform
[ 1+i n −1] [ 1+𝑖 𝑛 −1]
series of Deposits whose future value is F dollar.
5. The present value of an annuity equation
[ 1+i n −1] [ 1+𝑖 𝑛 −1]
F=A , Where is the present value of annuity factor
i(1+i)n 𝑖(1+𝑖)𝑛
(the present value of uniform series of A dollar deposits.
6. The capital recovery equation
(1+i)n i
A=P*
[ 1+i n −1]
(1+𝑖)𝑛 𝑖
Where * the capital recovery factor (the uniform series of
[ 1+𝑖 𝑛 −1]
deposits whose present value is P dollar).
 Example2.1
1. If 100 birr is invested in a bank to day may earn 8% per
year. What is the future value of the 100 birr for the 1st
,5th and 15th year?
2. If 100 birr is to be received after one year, five year
and fifteen year, what is the present value of 100 birr
today? Discount rate is 8% per year.
3. Calculate NPV, a sum of $400,000 dollars invested
today in an IT project may give a series of bellow in
cash follow's in future:
$70,000 in year 1,$120,000 in year 2, $140,000 in year 3
$140,000 in year 4 and 40,000 in year 5.If opportunity of
cost capital is 8% per auunum, then should we accept or
reject the project?
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 solution
1.Given
NPV=100.i=8% and required Fv?
F=P(1 + i)n
After 1 year(n=1), F=P(1 + i)n =108 birr
After 5 year(n=5), F=P(1 + i)n =146.93 birr
After 15 year(n=15), F=P(1 + i)n =317.2 birr
2. Given
Fv=100,i=8% and required pv?
F
P=
(1+i)n
F
Pv for 1 year(n=1), P= = 93birr to day
(1+i)n
F
Pv for 5 year(n=5), P= n = 68 birr to day
(1+i)
F
Pv for 15 year(n=15), P= , = 31,2birr to day
(1+i)n 28
 COST AND BENEFITS
Capital cost:- this is the sum of money invested in a project ( including
its interest during construction) before its completion.
 In general the capital cost of preliminary design is classified by the
following items:
 Civil engineering
 Electro mechanical equipment and its installation
 Equipment such as gate, penstock and its installation
 Temporary engineering
 Other expenses, e.g. administration of the construction unit, operation
preparation, scientific research, construction monitoring, legal
procedures, certificates, taxes and insurance
 Interest during the construction period.

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 Cont’d
Annual costs:- include the annual capital cost and the annual
operation and maintenance costs, the later involving salaries, material
expenses, water fees, overhaul expenses, interim replacement and
administration, etc
Benefits:
 The direct benefits is mainly from the benefits of the energy sale
as in the following expression:
𝐵𝑒 =𝐸𝑒 (1-β)(1-ϒ)P
Where 𝐵𝑒 =benefit from energy sale,𝐸𝑒 =effective annual energy
generation,β =plant use factor,ϒ=Grid loss factor ,P- Energy price
 i.e. the total net energy output given out by the generator of the
hydropower plant during the year after the deduction of energy
loss in outage.
 In the above equation 𝐸𝑒 (1-β)(1-ϒ) represents the amount of
electric energy on sale 30
 Cont’d

 Indirect benefits involves tangible and intangible benefits

 Tangible benefits:- are quantifiable and measurable.
e.g. cash flow, cash income, cost reduction, team work and managing
risk
 Intangible benefits:- uncountable, difficult or impossible to quantify
e.g.
 raise the standard of living of the society,
 reduces deforestation,
 increase the opportunity of employment
 Improved employee motivation.

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 Methods Of Economic Appraisal (Assessment)
1. The net present value method(NPV)
 This method is useful for ranking multiple projects.
 If we set the first year of construction as the base year the
procedure is to discount the net benefit (i.e. benefits minus
cost) from each year to the base year, then to obtain their
cumulative sum.
𝑛 𝐵𝑗 −𝐶𝑗
NPV=σ𝑗=0
(1+𝑖)𝑗
 If NPV is negative, the project should be rejected as it is
expected that the benefits during its lifetime will be
insufficient to cover the project costs. Assuming that there
are not any restrictions with respect to the required initial
capital among projects or alternative design solutions with
positive NPV the best ones will b with greater NPV.
 2. The Benefit – Cost Ratio Method
 The benefit–cost ratio is the ratio of the present value of
benefit to that of cost
 The criterion B /C ≥ 1

 The B/C ratio does not give the amount of net benefit.

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 3. The internal rate of return method (IRR)
 IRR is that discount rate at which the net present value is
equal to zero.
 IRR is calculated through an iterative process, which is
suitable for spread sheet computer processing.
 Like the NPV, IRR incorporates all the pertinent(relevant)
 All projects that have an internal rate of return less than
the opportunity cost of capital should be rejected.
 The criterion for selection between different alternatives is
normally to choose the investment with the highest rate of
return.
 The IRR expression is:

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 Environmental analysis
 When building, during normal operation, in the case of an accident
and at the end of the operation of a hydroelectric power station, the
environmental effects discussed below might occur.
1.Construction:-Water pollution caused by construction material or fine
soils getting into the stream, release of fine particles caused by
excavation, improper cleaning of building machinery, etc.
2.Normal operation:- During the operation of hydroelectric power
stations, no toxic substances are released directly, with the exception of
potential lubricant losses
3.Malfunctio:- If an accident occurs in an operation, If dams or weirs
fail, this can have a large impact on the population and the flora and
fauna.
4.End of Operation:-The actual hydroelectric power components are
mainly built from metallic material with recognized and generally
environmentally friendly disposal methods.
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Event person or
thing affected priority impact
During • Noise • Low
• Low
construction • Accident • Low
• Wild life • Emission
• Forest • Noise • Medium
disturbances
Accident • Better access
future • Medium
• Worker
• Medium
production
loss
• Major
injures or • Medium
death • high
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 The following is a comprehensive checklist that might
be used in developing and using methodologies.
i. Natural considerations:

a. Terrestrial b. Hydrological
• Soils • Surface water levels
• Landforms • Surface water quantities
• Seismic activity • Surface water quality
c. Biological • Ground water levels
• Vegetation • Groundwater quantities
• Fish and aquatic life • Groundwater quality
• Birds d. Atmospheric
• Terrestrial animals • Air quality
• Air movement
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 ii. Cultural and human considerations:

a. Social b. Local economy

• Scenic views and vistas • Employment (short-term)
• Open-space qualities • Employment (long-term)
• Historical and • Housing (short-term)
archaeological sites
• Housing (long-term)
• Rare and unique species
• Health and safety • Fiscal effects on local
government
• Ambient noise level
• Residential integrity • Business activity

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 Other Social and Political Considerations
a. Land Ownership
 In hydropower feasibility
studies, land ownership is an
important consideration.
 The land is in government
ownership, or there are
certain legal restraints on
the land.
b. Legal Considerations
 Legal considerations are
important in the appraisal
of social and political
feasibility of hydropower
developments:
 water rights,
 regional state regulatory
permits, and
 federal licensing.
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 Efficiency Of Hydropower
 Hydropower is very efficient
 Efficiency = (electrical power delivered to the “bus
bar”) ÷ (potential energy of head water)
Typical losses are due to
 Frictional drag and turbulence of flow.
 Friction and magnetic losses in turbine & generator.
Overall efficiency ranges from 75-95%.

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