CHAPTER-5

COST EFFECTIVENESS OF SMALL HYDROPOWER

5.1 INTRODUCTION
Cost effectiveness in small hydro power depends largely on proper selection of site, good
planning of the layout of the scheme on optimization basis, hydrological and optimum power
potential studies, careful and correct designs of structures, proper estimates with realistic rates
and use of construction techniques appropriate to small hydro and efficient execution. This
requires an interdisciplinary approach at different stages of the work. Careful monitoring and
adherence to the construction schedule is essential to prevent cost and time overruns.
The procedure for cost-effectiveness analysis is a systematic comparison of alternatives of
selects the one that minimizes cost while reliably satisfying technical limitations and
preferences over the expected time for operation .The total cost of the project is related to size
and effectiveness.
The optimization process consists of three main steps: (1) find the maximum yearly energy;
(2) maximize the yearly benefits of all the maximized sets of power plants; and (3) select the
most beneficial of the feasible sets of run-of-river power plants on the basis of a combination
of the cited criteria

The design of reliable and cost effective small hydropower plants capable of large-scale
electrical energy production is a prerequisite for the effective use of hydropower as an
alternative resource. In this sense, the design of a small hydroelectric plant or equivalently the
determination of type and energy load of the particular hydro turbines should maximize the
energy output together with the life-time of the machines. In all cases, the design objective is
closely related to the total annual output of the overall hydro turbine operation in power terms.

5.2 THE IMPORTANCE OF MINIMIZING CAPITAL COST

In conventional large-scale hydropower, attention is given to maximizing the energy that
will be produced from the site over the life of the scheme, which may be a century or more.
The efficiency of energy recovery tends to dominate over considerations of initial capital cost.
On the other hand small hydro installations typically service small communities with limited

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resources, and the initial capital cost becomes the overriding issue, so it is more important to
maximize power per unit cost than to maximize power alone.

5.3 PLANNING FOR OPTIMUM DESIGN

Cost effective small hydro would depend largely on proper selection of site, good planning of
the layout of the scheme on optimization basis, competent hydrological and power potential
studies, careful and correct designs of structures, proper estimates with realistic rates and use
of construction techniques appropriate to small hydro and efficient execution. The procedure
for cost-effectiveness analysis is a systematic comparison of alternatives of selects the one
that minimizes cost while reliably satisfying technical limitations and preferences over the
expected time for operation .The total cost of the project is related to size and effectiveness.

Any SHP scheme should aim at maximising the power output as efficiently and
economically as possible at the selected site. This requires proper planning in selection of
site and equipment, techno-economically attractive design and configuration, economy in
construction of civil works and equipment and maximising the load factor etc. These
planning aspects are discussed in brief in the following paragraphs.
The data on flow discharge and head is normally sufficient to plan a SHP scheme and
simple methods can be used to generate these data. The larger and costlier the scheme, more
critical and accurate data is needed. For a SHP in a remote area, some amount of dependable
and year round power is required which can be determined based on the minimum usable
flow in the stream.
5.3.1 Site selection

The selection of appropriate site for the installation of SHP requires consideration of several
factors.

• The site must be accessible or can be made accessible to facilitate construction,

operation and maintenance of the installation and transportation of equipment and material
etc.

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• The available energy is optimally utilised and future needs of power are considered
while fixing the capacity of the SHP.
• Net head, flow and power output have significant effect on site selection because a low
head installation requires larger flow of water whereas a high head site needs relatively
smaller flow for similar output. It is advisable to make use of higher head available because
most of the civil works and turbo-machinery get reduced in size resulting in reduction of cost.
• Powerhouse to be situated at a reasonable distance from the consumers or existing grid
to avoid as far as possible high voltage lines and other costly step up equipment.

• The site should have social benefit potential and also multi sector integration potential.

5.3.2 Civil works

The principal components of civil works are specific site, if necessary components are
excluded or unnecessary components are included, problems may arise in implementation,
operation and maintenance of the plant and can result in increase in the cost of SHP.

An intake is a component found in every SHP. An intake provides a controlled flow of

water from a river or stream into a conduit to convey water into the turbine to generate
power. In addition to this, major function of intake is to minimise the amount of debris and
sediment carried by the water. Therefore, the design of intake mainly depends upon the
quality and quantity of water to be fed into the power conduit and also whether a dam or a
weir is included in the layout. An important parameter in case of intake is its orientation
with reference to the stream. Best orientation is in the direction perpendicular to the stream
which can prevent sediment, debris etc. entering the power conduit. Intake can be
advantageously located behind or under big boulders which can deflect flood flows and
river borne debris and can also limit water flow into the intake.

Power conduit is required to carry the water flow from the stream to the inlet of penstock
with minimum loss of head and at the same time at minimum cost possible. Velocity in the
canal is inversely proportional to its cross section and also cost of construction, i.e. higher
the velocity, smaller is the cross section and volume of excavation. A power conduit is
generally a canal excavated in soil and it can be lined or unlined depending on velocity of

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flow, ease in maintenance and cost of construction. Common lining materials are brick,
stone masonry, LDPE etc. Hume pipes are suitable as power conduit but at higher cost.
There can be a trade off in the combination of power canal and penstock to obtain the same
head and power potential depending on the nature of terrain, allowable loss of head: ease of
maintenance and cost. The options available are:
• Larger diameter and longer penstock pipe direct from the intake to the turbine
without a canal.
• A power canal for longer distance and a smaller diameter and smaller length
penstock from end of the canal to the turbine.
A significant point to be considered here is that for a given length, the cost of power canal
using local material may be cheaper than steel penstock. The forebay is a basin located just
before the entrance to penstock to serve as a settling basin or for storage of water to cope up
with demand of water due to sudden increase in the turbine load. It can be a simple
excavated area. The size of particle to be removed depending on head is as follows. Bead
size of silt particle to be removed Medium High
The cost of power house can be minimised by restricting its configuration. For example the
powerhouse building can accommodate turbo-generating equipment only as a cost saving
measure. The volume flow rate of water will directly influence the cost of powerhouse, since
the leading dimensions of turbine and the powerhouse are related to the quantity of water.
Impulse turbines are used for high heads and low flows which require smaller space whereas
reaction turbines are for low heads and higher flows and require larger space.

5.3.3 Cost effective penstock

The penstock cost is typically 1/3 of the overall installation costs; it is one of the most
expensive items and has to be carefully chosen. There are two components to achieving the
best power per unit cost, first finding the maximum power per unit length of penstock and
second, making a realistic choice of penstock. . Cost of penstock is high if it is buried, but it
may become unavoidable if topography warrants it. The cost towards supports and anchor for
penstock is a considerable amount and need to be reduced if possible. Different materials
which can be used for penstock in addition to steel are cast iron, ductile iron, PVC,
polyethylene, concrete and asbestos cement, ERW pipes and Indian Hume Pipes.

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There is a well-known analysis for finding the optimum discharge for a given diameter from
available piping, optimum is a compromise between
• Small diameter ,cheaper piping with very high flow rates and high head losses due to
friction, and
• Large diameter, more expensive pipe with low friction head losses.
This analysis shows that at the optimum discharge the friction head loss is one third of the
gross head. Mild steel and HDPE pipes are the most common penstock materials used in
small hydro power schemes. HDPE pipes are usually economical at low head and flows and
are also easy to join and repair

5.3.4 Determination of optimum installed capacity

The sizing of a small hydropower plant of the run-of-river type is very critical for the cost
effectiveness of the investment .To determines the optimal installation capacity of small hydro
plant all technical, economic and reliability indices are considered in a trade-off relation.
Using this approach, the amount of annual energy is determined by using categorized statistics
of the flow duration curve in different months. Then, after specifying the income and costs of
the plant, the economic indices of different alternatives are extracted. The reliability indices
are then calculated and ultimately, through comparison of the technical, economic and
reliability indices, a superior alternative can be selected, determining the optimal installation
capacity. This method of calculating the technical, economic and reliability indices and the
subsequent processes used in the planning of an small hydro plant will be further discussed
and described

5.4 OPTIMIZATION

Optimization in general, is the search for a feasible operational policy that maximizes or
minimizes the value of the objective function or optimization criteria. Hydropower is non-
linear function though the operation problems in hydropower are non-linear problems. The
best solution to non-linear problems can be obtained by application of non-linear optimization
techniques.

In the hydropower industry, this optimization criterion may vary and usually is one of the
following:

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 • Maximization of energy production
• Maximization of benefits or revenues
• Minimization of squared differences between power profiles
• Maximization of benefits in energy export-import
In the first single-objective optimization study, the target is to find the proper plant
configuration that minimizes or maximizes the value of some operation or economic
parameters. The economic indices NPV and BCR and an additional load coefficient Lf that
gives the ratio of the mean produced power to the installed capacity has been calculated .the
maximum value of NPV and BCR will gives maximum energy production, about 80% of the
water stream potential .the remaining 20% is lost due to hydraulic and other losses. How ever
low load coefficient values indicate, the installed power is too high, and this increases the
investment capital cost.

5.4.1 Basic components of an optimization problem

An objective function expresses the main aim of the model which is either to be minimized or
maximized. For example, in a manufacturing process, the aim may be to maximize the profit
or minimize the cost. In comparing the data prescribed by a user-defined model with the
observed data, the aim is minimizing the total deviation of the predictions based on the model
from the observed data. In designing a bridge pier, the goal is to maximize the strength and
minimize size.
A set of unknowns or variables control the value of the objective function. In the
manufacturing problem, the variables may include the amounts of different resources used or
the time spent on each activity. A set of constraints are those which allow the unknowns to
take on certain values but exclude others. In the manufacturing problem, one cannot spend
negative amount of time on any activity, so one constraint is that the "time" variables are to be
non-negative.
The optimization problem is then to find values of the variables that minimize or maximize
the objective function while satisfying the constraints.
The optimization process consists of three main steps: (1) find the maximum yearly energy;
(2) maximize the yearly benefits of all the maximized sets of power plants; and (3) select the
most beneficial of the feasible sets of run-of-river power plants on the basis of a combination
of the cited criteria

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5.4.2 Linear programming problem

If the objective function and all the constraints are ‘linear’ functions of the design variables,
the optimization problem is called a linear programming problem (LPP).

A linear programming problem is often stated in the standard form

 x1 
x 

 
2

Find X =  . ……………………… (5)
. 
 

x n 

n
Which minimizes f(X) = ∑c x
i =1
i i …………… (6)

Subject to the constraints

n

∑a i =1
ij xi = b j , j = 1, 2, . . . , m

xi ≥ 0 , j = 1, 2, . . . , m

Where ci, aij, and bj are constants.

5.6 CASE STUDY OF A SMALL HYDRO POWER PROJECT

For illustration purposes a typical small hydro plant which is located Arunachal Pradesh, India
and 100% dependability flow is 4.49 cumecs, 75% flow dependability is 5.55 cumecs. Based
on the discharge data collected from Arunachal Pradesh development agency, estimation for
mean monthly values of flow, over a period of 10 years is made and a flow duration curve is
calculated as shown in Fig.5.1 and cost of various components of civil works and electro-
mechanical works are estimated and shown in table 5.1. And estimation of generation cost and
load factor at a head of 60 m as shown in table 5.2. The graph between the generation cost and
installed capacity shown in fig 5.2
The economical analysis has been carried out considering costs and obtained incomes,
according to the given algorithm. The economic indices B/C Ratio, NPV Value has been
calculated and shown in table 5.3.The interest rate has been settled as 8 % and 11% in order to
attract foreign investment in developing countries.

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 Fig 5.1 Flow Duration curve

Table 5.1 cost of small hydropower plant at 60m Head

Installed Capacity(kW)
4000 1000
S.no Components 2000 30000 0 5000 6000 7000 8000 9000 0 11000 12000
1 CIVIL WORKS
Weir and Intake 860.5 955.33 1050 1100 1150 1200 1250 1400 1450 1500 1550
Power channel 530 575 620 630 640 650 660 750 800 900 950
Desilting tank 155 172 190 200 210 220 230 260 300 320 350
Forebay &Spillway 115 119 124 128 132 136 140 155 160 165 170
Penstock 119 139 160 179 198 218 230 250 260 270 280
Power house 270 315 360 382 404 427 450 480 500 520 535
tail race channel 69 75 80 84 88 93 98 110 120 125 130
Total cost of civil 2350.3
works 2118.5 3 2584 2703 2822 2944 3058 3405 3590 3800 3965
Cost of E & M
2 Works 1271.1 1410.2 1550 1622 1693 1766 1835 2043 2154 2280 2379
235.03 270. 282. 294. 305. 340.
Other Costs 211.85 3 258.4 3 2 4 8 5 359 380 396.5
3601.4 3995.5
TOTAL COST 5 6 4393 4595 4797 5005 5199 5789 6103 6460 6740.5

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The main design parameters can be selected in order to produce a cost effective generation
that gives a high NPV with maximum energy generation. The economic indices are calculated
by using MATLAB coding.

Table 5.2 Estimation of generation cost of SHP at 60m Head

S.no Installed Head(m) Annual Generation Load
capacity(kW) energy(MU cost(Rs/kWH) factor
)
1 2000 60 17.52 1.23 1
2 3000 60 24.38 0.98 0.92
3 4000 60 29.82 0.88 0.85
4 5000 60 35.12 0.78 0.8
5 6000 60 39.94 0.72 0.76
6 7000 60 44.51 0.67 0.72
7 8000 60 48.88 0.64 0.69
8 9000 60 49.27 0.7 0.65
9 10000 60 49.77 0.73 0.55
10 11000 60 50.02 0.77 0.49
11 12000 60 50.51 0.8 0.47

The curve drawn between the installed capacity and cost per unit shows give below in Fig 5.2

Fig 5.2 Selection of optimum installed capacity

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The optimum point we can found by this graph. The economic indices of different alternatives
of Small Hydro Power are calculated and those are shown in Table 5.3

Table 5.3 Economic indices of different alternatives for SHP

S.no Installed Cost Per interest rate NPV interest rate NPV
capacity(kW) Unit 8 % B/C value(million) 11% B/C ratio value(million)
ratio
1 2000 1.23 2.20 24.11 2.25 24.65
2 3000 0.98 2.76 40.19 2.82 41.08
3 4000 0.88 3.07 52.28 3.14 53.54
4 5000 0.78 3.46 65.45 3.53 66.92
5 6000 0.72 3.77 77.23 3.85 78.96
6 7000 0.67 4.02 88.30 4.11 90.27
7 8000 0.64 4.24 98.80 4.33 101
8 9000 0.7 3.85 96.13 3.94 98.27
9 10000 0.73 3.69 95.44 3.77 97.56
10 11000 0.77 3.50 93.79 3.58 95.87
11 12000 0.8 3.39 93.29 3.46 95.36

5.7 COST OPTIMIZATION OF SHP DEVELOPMENT

The methodology as discussed earlier and estimation of effective cost per unit capacity of
small hydropower projects at different capacities and at different heads. Costs data of SHP
plants given below in table4.1, table 4.2 and table 4. 3
The model which has been used to optimize the cost of SHP is given as follows

Total cost of project= 263.6*Capacity^.3587*Head^-.0399……………….. (7)

With constraints 40 <= Head <= 250

1000<= Capacity <= 25000

Since this model is in power equation, it cannot be used directly as objective function for
optimization .it was transformed into linear form of equation by taking log of power model.
The linear equation in the log for is given as follows
Log (total cost) = 2.42 + .3587 Log (Capacity) - .0399 (Head) …………… (8)

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 Log (total cost) - 2.42 = .3587 Log (Capacity) - .0399 (Head)…………….. (9)

Take
Log (total cost)-2.42 = Z
Log (capacity) = X1
Log (Head) = X2
The new objective function becomes
Z = 0.3587*X1 – 0.0399*X2 ……………… (10)
And new constraints after taking log of the older constraints are
3 <= X1 <= 4.39
1.602 <= X2 <= 2.39

5.7.1 Minimization
The software package TORA was used for finding the minimum solution of the cost per unit
cost. The two graphical method are used to find the solution .The inputs given to the software
are

Objective function
Z = 0.3587*X1 – 0.0399*X2 ………………………. (11)
Constraints
3 <= X1 <= 4.39
1.602 <= X2 <= 2.39

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The optimum installed capacity has been found as 8000 kW and min cost of the project is
5370 lacs.
The similar methodology applied to two typical flow duration curves Objective function is
same and the constraints are given below
4.38 <= X1 <= 4.47
1.30 <= X2 <= 1.39

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In this case the optimum installed capacity has been found as 24000 kW, minimum cost of the
project has been worked out as 8709 lacs.
For another flow duration curve of small hydro project the constraints are given below
3.69 <= X1 <= 3.74
2.55 <= X2 <= 2.56

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In this case the optimum installed capacity has been found as 5000 kW, minimum cost of the
project has been worked out as 4466 lacs

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