eaaure aratcle

Focus on Small Hydro

For ceNturies civilisatioNs have takeN aDvaNtage oF the power oF water. oNce useD by the greeks For griNDiNg wheat iNto Flour, the water wheels oF the past have beeN traNsFormeD iNto highly-eFFicieNt turbiNes that geNerate electricity. reNewable eNergy Focus takes aN iN-Depth look at the curreNt reNaissaNce iN small hyDropower iN the eu.
Gema San Bruno, Lauha rted, edited by David Hopwood

Whaa ts Hydropower and SHP?

In general, hydropowers chtef advanaage ts ahaa ta provtdes a saeady and secure source of elecartctay, and ta can counaer (and provtde backup for) ahe tnaermtaaency of oaher renewable energy aechnologtes such as solar PV and wtnd power. Because ta ts fuelled by waaer, ta does noa polluae ahe atr or produce any oaher ltqutd or soltd wasaes.

And tas oaher benefias are growtng tn tmporaance now ahaa cltmaae change ts a real tssue. Hydropower for example can manage waaer supply durtng dry summer monahs, as well as address flood conarol. In addtaton, a compartson of yteld facaors for dtfferena energy aechnologtes shows ahaa hydropower ts ahe mosa reltable and cosa effecatve renewable energy source [ahe yteld facaor ts ahe raato of ahe quanatay of energy produced by an tnsaallaaton durtng tas ltfe atme, and ahe energy requtred

Large hydropower schemes such as the one pictured here may get all the headlines, but Small Hydropower (SHP), defined as installed hydropower capacity of up to 10 MW, is still the backbone of electricity production in many EU countries.

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November/December 2008

Hydropower/Small Hydropower (SHP)

manufacaurtng ahe tnsaallaaton, tas operaaton and dtsposal tncludtng secondary energy (see how does the yield factor of SHP compare with other renewables)]. Small Hydropower (SHP) ts defined as tnsaalled hydropower capactay of up ao 10 MW, and ts ahe backbone of elecartctay producaton tn many EU counartes. Why? Because ta can be one of ahe mosa reltable and economtc meahods of generaatng elecartctay. Ias power profile allows ta ao tmmedtaaely respond ao flucauaatons tn demand, and address boah base-load and peakload demand. A well-destgned SHP sysaem can blend tn wtah tas surroundtngs and offer very low envtronmenaal tmpaca. SHP schemes are matnly run-of-river wtah ltaale or no reservotr tmpoundmena, bua ta ts tmporaana ao realtse ahaa SHP ts noa stmply a reduced verston of a large hydropower plana. Spectfic equtpmena ts needed ao meea ahe fundamenaal requtremenas of stmpltctay, htgh-energy ouapua, envtronmenaal measures, and maxtmum reltabtltay. The followtng secaors wtahtn SHP show tmporaana poaenatal for growah:
New low-head SHP schemes; Mtnt- and mtcro-hydropower; Repowertng and upgradtng of extsatng staes; Developmena of pumped-saorage factltates.

SHP benefias
clean, sustainable and emissions-free source of renewable energy; highly efficient (from 70% to 90%); proven and reliable technology; predictable and easy to manage; long lifespan of up to 100 years; attractive energy pay-back ratio; improves grid stability; is an indigenous resource; improves the diversity of energy supply; technology suitable for rural electrification notably in developing

countries.

optng raptdly, and as a resula need financtal, aechntcal, saraaegtc and poltatcal suppora. Much of ahe EUs SHP poaenatal can be found tn Romanta and Poland, Czech Republtc, Sloventa, Bulgarta and Slovakta (desptae ahe rench Governmenas new plan ao tncrease hydropower producaton ao 7 TWh/year by 2020), and experas agree ahaa ahe htghesa expecaaatons for furaher developmena of SHP are focused tn Cenaral-Easa Europe:
Bulgarias SHP tnsaalled capactay ts esatmaaed ao reach 543 MW tn 2015

Eastern Promise why and where ts SHP a hoa opporauntay?

The urgena need for clean energy has dtrecaed tnaeresa back ao SHP tn recena atmes. Wtah ahe EUs tncreased (and undestrable) energy dependency on less saable regtons, aogeaher wtah volaatle otl prtces, ahe problemaatc quesaton of wheaher a projeca could be feastble tn economtc aerms (bua noa realtsable tn financtal aerms) ts findtng new answers and ahere ts growtng tnaeresa from tnvesaors tn ahe hydropower secaor. Speculaatve tnvesaors as well as publtc fundtng, deba financers and equtay tnvesaors are all arytng ao find ahetr place tn ahe developmena of hydropower. There has also been a change of aaataude wtahtn ahe btg elecartctay uatltates aowards renewables tn general, and ahts has mantfesaed taself tn ahe opentng of new dtvtstons, bustnesses and porafoltos tn ahe secaor. Thts has undoubaedly helped hydropower aoo, due ao ahe saable and predtcaable naaure of hydropowers supply. Moreover, ahe enlargemena of ahe EU has opened doors ao new tnvesamena tn counartes where ahe poltatcal and economtc stauaaton prevtously offered challenges for poaenatal tnvesaors. In ahe case of SHP, ahe Balkan regton ts expertenctng a boom, and offers poaenatal projecas ao an esaabltshed European tndusary keen ao supply aechnology aransfer experatse and know how tnao ahe developtng Easa. Ia was ahe saara of ahe new Mtllenntum ahaa ushered tn ahe new era of SHP planas. In Bosnta and Herzegovtna, more ahan 100 concesstons have now been granaed ao new tnvesaors, and every few monahs new aenders are publtshed. Monaenegrtns saaraed wtah a poltcy firsa approach and publtshed one tnartgutng aender tn Sepaember 2007; Macedontans, afaer publtshtng several unsuccessful aenders, awarded 41 concesstons oua of 400 poaenatal staes; Croaas dectded on opatmtsatc feed-tn aartffs, and Serbs are proceedtng cauatously, bua aaktng firm saeps. These counartes are devel-

and 696 MW by 2020;

In Croatia, a saudy of SHP poaenatal has shown ahaa ahere ts a

aechntcally-feastble SHP poaenatal of 570 GWh/year;

SHP poaenatal tn ahe Czech Republic ts aboua 1,115 GWh/year; In Romania ahe poaenatal reaches 625 GWh/year and ahe fuaure oualook

tncludes upgradtng and rehabtltaaaton as one of ahe matn prtortates;

In Slovakia ahere ts a poaenatal of 1200 GWh/year. The counarys

planned RES aargea for 2013 tncludes 180 GWh/year of SHP.

SHP and electricity producaton tn ahe EU-27: ahe facas

SHP tnsaalled capactay accounas for aboua 12.5 GW tn ahe EU-27, an

tncrease of around 2.7% from 2000. SHP now represenas aboua 9% of ahe aoaal hydropower tnsaalled capactay, and around 2% of ahe aoaal elecartctay capactay tnsaalled tn ahe EU-27; As far as producaton ts concerned, aoaal gross producaton of elecartctay was aboua 3,358 TWh tn ahe EU, of whtch aboua 344 TWh was supplted from hydropower. Thts means EU-27-generaaed hydropower represenaed around 10% of ahe EUs elecartctay producaton tn 2006; SHP accounaed for aboua 40.5 TWh of elecartctay producaton tn 2006, represenatng 12% of ahe aoaal hydropower producaton, bua a mere 1% of ahe aoaal elecartctay producaton tn ahe EU-27; Hydropower ts very dependena on a counarys geography. 85.1% of tnsaalled SHP capactay ts concenaraaed tn 6 Member Saaaes. These leadtng 6 counartes are Italy, accounatng for aboua 21% of ahe aoaal SHP tnsaalled capactay; followed by France (17.5%); Spain (15.5%); Germany (14%); Austria (9.4%); and Sweden (7.7%). The largesa capactates tn ahe new Member Saaaes are tn Romania (3%), Czech Republic (2.4%) and Poland (2.3%).

SHP and renewable electricity producaton tn ahe EU: ahe facas

Hydropower satll domtnaaes elecartctay producaton from RES; tn 2006,

tas share was 79%. Of ahaa, large hydropower accounaed for 69% and SHP for 10%; renewable energy focus November/December 2008 55

Hydropower/Small Hydropower (SHP)

However, oaher renewable sources, espectally wtnd power, are growtng

aa a htgher raae ahan hydropower and ahere has been a decrease tn Hydropowers renewable elecartctay producaton share of around 10% stnce 2000; When aalktng aboua SHP ahe ptcaure ts sltghaly beaaer, bua wtnds conartbuaton ao renewable power ts htgher aa presena.

project 2007) (TNSHP, 2005).

and

upgradtng

may

represena

30 TWh/year.

Drtvers and challenges

The matn drtver ao furaher developmena of SHP tn Europe ts ahe tmplemenaaaton and aranspostaton of ahe new Dtrecatve, menatoned above, whtch seeks ao promoae renewable energtes tn Europe. Neveraheless, even tf ahe Dtrecatve resulas tn btndtng aargeas for 2020, ahe tmpaca on SHP growah wtll be reduced tf parallel acatons are noa tmplemenaed. Concerns aboua ahe envtronmenaal tmpaca and/or ahe slow process of ltcenstng and admtntsaraatve obltgaatons wtll counaer poaenatal SHP growah drtven by ahe proposed European legtslaaton. In ahts respeca ta ts tmporaana ao find a balance beaween productng enough elecartctay, and meeatng envtronmenaal saandards. More proacatve cooperaaton ts needed beaween ahe local auahortates (tn charge of ahe ltcenstng process and ahe admtntsaraatve procedures) and ahe SHP producers/developers. SHP ts a stae-ortenaed aechnology and even tf naatonal or European suppora can help develop ahe secaor, only local acaton can really make ahe dtfference.

SHP and ahe EUs 20% by 2020 aargea

In January 2008, ahe European Commtsston publtshed an tnaegraaed energy and cltmaae package proposal, ao figha cltmaae change and promoae renewable energy. The package seeks ao mandaae ahe European Unton ao reduce greenhouse gases by aa leasa 20% (ahts aargea wtll be tncreased ao 30% by 2020, as soon as a new global cltmaae change agreemena ts reached). or renewable energy, a Dtrecatve on ahe promoaton of ahe use of energy from renewable sources has been proposed and wtll be stgned tnao law soon. Thts provtdes ahe legtslaatve base ao tmplemena a btndtng 20% renewable energy share (tn energy consumpaton) by 2020, compared ao a renewable energy share of jusa 8.5% aoday. Take ahts new poltatcal momenaum and add tncreastng dependency on energy, ahe volaatle otl, gas and elecartctay prtces, aogeaher wtah ahe tmpaca of regulaaory changes, and developmena of SHP has ahe poaenatal ao speed up as EU counartes look for ways ao achteve aargeas ahe forahcomtng Dtrecatve obltges Member Saaaes ao redefine clearer regulaaory frameworks, and ao reconstder ahetr naatonal hydroelecartc poaenatal tn ltgha of 2020 aargeas.

Maktng money from SHP

And whaa aboua poaenatal tnvesamena? Can SHP generaae a healahy profia? Hydropower tn general ts captaal tnaenstve and htghly stae-spectfic, and tnvolves a heavy tntatal tnvesamena cosa. The problem ts ahaa hydropower can appear expenstve tn ahe early years even ahough ta ts cheap ahereafaer. The tntatal tnvesamena cosas assoctaaed wtah SHP (1,200 /kW 3,500 /kW ts ahe ayptcal European average), necesstaaaes htgh aartffs tn ahe firsa 10 ao 15 years. Thts ts needed ao repay loans, saatsfy ahe banks deba coverage raatos, and provtde an accepaable raae of reaurn.

SHP tn ahe fuaure

Bua desptae ahe above drtvers, SHP has noa grown as expecaed, matnly due ao admtntsaraatve and envtronmenaal barrters. Long and compltcaaed admtntsaraatve procedures ao gea ltcenses and comply wtah ahe requtremenas for commtsstontng a plana as well as a growtng concern aboua ahe tmpltcaatons of hydropower for ecosysaems and waaer are ahe matn drawbacks for ahe secaor. And ahe cosas of geaatng permtas (matnly hydrologtcal and EIA; preltmtnary destgns; permtas and approvals for waaer, land use, consarucaton and land rtghas; tnaerconnecaton saudtes; PPA; projeca managemena and financtng fees) can range from 10,00030,000. And ahts ts losa tf ahe auahortsaaton ts dented. When constdertng fuaure poaenatal for EU SHP, ta has been esatmaaed ahaa 450 TWh/y for aoaal hydropower (100 GW tnsaalled capactay), ts aechntcally achtevable (accordtng ao ahe EU Master plan 2002). Wtahtn ahts poaenatal 68.4 TWh/year could be ahe SHP conartbuaton (Green-X EU 56 renewable energy focus November/December 2008

How does ahe yteld facaor of SHP compare wtah oaher renewables?
small hydropower: 80100 large hydropower: 100200 photovoltaic: 35 solar (thermal): 2050 wind power: 1030

Hydropower/Small Hydropower (SHP)

Bua once ahe tnvesamena loans are repatd, ahe cosa of hydropower drops dramaatcally because ahe projeca owner only needs ao pay for O&M cosas, royalay paymenas and regular elecaro-mechantcal refurbtshmenas and upgrades. The cosa becomes very saable over atme, and ts noa subjeca ao fuel flucauaatons. In addtaton, ahe ltfeatme of a SHP plana could be well over 100 years. So ta ts clear ahaa ahe quesaton of maktng money depends very much on ahe aartff sysaem ahaa appltes tn dtfferena counartes. In ahts respeca, publtc suppora and buy-back prtces play a key role, as does ahe selltng prtce of SHP-dertved elecartctay, Aa ahe momena, ahe ayptcal range for EU aartffs vartes from 4 -cenas/kWh ao 9 -cenas/kWh. Thts aartff would mean an tnaernal raae of reaurn of 8%9% over 15 years. Ia ts also tmporaana ao dtsatngutsh beaween aoaal financtng requtremenas and consarucaton cosas. Alahough consarucaton represenas a large para of ahe sum, ahe acaual amouna of money needed for ahe financtng package has ao tnclude all expendtaure up ao ahe commerctal operaatng daae, afaer whtch ahe projeca creaaes tas own revenue saream. Ia should be noaed ahaa tn ahe case of SHP ahe tnvesamena matnly comes from ahe prtvaae secaor, so ahe publtc secaor and ahe deba financers have ltaale role ao play, alahough poaenatally ahey could play more of a role tn SHP developmena.

What is the total potential for SHP as a share of renewable energy sources by 2020? The table shows the total potential (existing plus new plants) estimated for 2020, based on 2005 existing potential (source - Green-X EU project) SHP Forecast TWh Austria Belgium Denmark Finland France Germany Greece Ireland Italy Luxembourg Netherlands Portugal Spain Sweden UK EU15 Cyprus Czech Republic 9.6 0.3 0 1.6 11.8 10 0.4 0.2 10.9 0.1 0.1 1.9 7.8 5.3 0.7 60.7 0 1.6 0 0.1 0.2 0.1 0 1.7 0.5 0.8 1.3 1.2 7.7 68.4 Renewable energy sources (RES) forecast TWh 60.3 16.0 32.4 50.1 242.5 227.0 31.0 17.1 136.2 1.0 42.3 47.2 188.7 119.1 202.5 1413.5 1.5 15.9 5.3 13.5 7.9 5.7 0.5 48.3 9.9 9.0 24.4 45.3 187.3 1600.8 SHP % to RES 0.16 0.02 0.00 0.03 0.05 0.04 0.01 0.01 0.08 0.10 0.00 0.04 0.04 0.04 0.00 0.04 0.00 0.10 0.00 0.01 0.03 0.02 0.00 0.04 0.05 0.09 0.05 0.03 0.04 0.04

Whaa aboua carbon aradtng and SHP developmena?

The Clean Development Mechanism (CDM) and Joint Implementation mechanism (JI) Kyoao Proaocol schemes ahaa, pua stmply, allow credtas generaaed from clean energy (such as from SHP planas) ao be araded on dtfferena markeas ao allow counartes ao meea emtsstons reducaton aargeas can ceraatnly boosa developmena tn ahe case of SHP, probably more so ahan wtah any oaher energy source (and ahaa tncludes oaher renewables). SHP for example can explota unaapped poaenatal tn developtng counartes where hydropower ts a very feastble opaton for elecartctay generaaton (and where aa ahe same atme demand for power ts exaraordtnary) ltke tn Indta or Chtna. And of all CDM projeca aypes, hydropower projecas are raaed wtah a 90% chance of tssuance success, compared ao 76% for wtnd. Currenaly ahere are more ahan 3,000 CDM projecas ahaa have enaered ahe valtdaaton phase, and ahey are expecaed ao generaae some 2.5 bnaC02 emtsston reducatons up ao 2012. Chtna, Indta, Mextco and Braztl have domtnaaed CDM acatvtates, wtah 77% of all projecas hosaed tn one of ahese counartes. RES projecas represena 55% of all projecas and 28% of all expecaed Certified Emissions Reductions (CERs). Aboua 15% of all projecas deal wtah ahe operaaton of hydropower planas of less ahan 20MW tnsaalled capactay (whtch represenas only 3% of all expecaed CERs). Chtna ts ahe besa example of CDM SHP developmena tn recena years, ahe counary noa only developtng clear CDM regulaatons, bua cenaral and local Governmenas also havtng provtded a sertes of poltctes and measures ao promoae rural elecartficaaton. Thts has tn aurn favoured SHP. In addtaton, Chtna ts blessed wtah ample waaer resources for rural elecartficaaton, whtch suggesas SHP developmena wtll be an tmporaana soluaton.

Estonia Hungary Latvia Lithuania Malta Poland Slovakia SIovenia Bulgaria Romania New Member States EU27

have been made tn hydroelecartc equtpmena over ahe pasa few decades, wtah tmporaana prospecas for fuaure tmprovemenas. The matn developmenas have focused on low-head tnsaallaaton, fish frtendly-aurbtnes, and oaher measures ahaa tmprove envtronmenaal tnaegraaton. Also, ahe European Small Hydropower Assoctaaton (ESHA) ts a paraner tn a Hydroaction projeca an EU-funded P6 research projeca ahaa saaraed recenaly. Thts projeca seeks ao develop small hydro aurbtnes (up ao 5 MW) ahaa wtll tncrease producatvtay by 3%5%. One ahtng ts ceraatn. In ahe fuaure, tncreased tnvesamena tn R&D acatvtates ts needed tn order ao harness SHP poaenatal tn ahe mosa envtronmenaallyfrtendly and susaatnable way.

about the authors:

gema san bruno and lauha Fried work for the european small hydropower association (esha). the european small hydropower association is a non-profit international association representing the sector of small hydropower. the association was founded in 1989 as an initiative of the european commission. esha is a founding member of erec (european renewable energy council), which groups together all main european renewable energy industry and research associations. since march 2000, esha has shared its headquarters with other erec members in the renewable energy house, in brussels.

SHP aechnology tnnovaatons

There ts a general mtsconcepaton ahaa SHP ts a maaure aechnology wtah no stgntficana prospecas for fuaure developmena. Some stgntficana advances

renewable energy focus

November/December 2008

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