Small-scale hydro power

Practical Action's position on small-scale hydropower

The linkages between rural energy and poverty alleviation, and the potential contribution of renewable energies for rural electrification, have both been well documented over the past two decades. The most important organisations around the globe agreed that energy is a key element for human development, reflected in the Millennium Development Goals (MDGs).

Small hydropower is a renewable and clean energy option, used extensively in the past for shaft power, and in modern times for electricity generation. The position of Practical Action is that small hydro is one of the best decentralised options to supply energy and alleviate poverty; therefore development agencies, through international cooperation, should give much more attention to this technology, whilst governments should put in place provide the policy arrangements to enhance the dissemination and use of hydro energy resources in the world.

Important research activities have been carried out by Academic Institutions, NGOs and others (World Bank, UNIDO, DFID, GTZ, SKAT, Practical Action and others), to understand and improve the sustainability of decentralised electricity services for small hydro schemes. The present best practices include: good governance, appropriate tariff setting, community participation at all implementation stages, capacity building at national level and community level, organization and management models, and training to users on a range of issues related to energy services. There are a large number of successful small hydro schemes in different developing countries, which show their adaptability to the local conditions, their sustainability and their positive contribution to local development.

During the last decades, little has been done on advocacy to promote small hydro in contracts other renewable energy options as solar photovoltaic systems (PV) have been more advocated and have got support from the most encouraged by important organisations like the World Bank and UNDP, supported by ongoing campaigns and advocacy from large manufacturers like Shell, BP, Kyosera, TOTAL.

Background

Hydropower became an important resource for electricity generation at the beginning of the electricity era. The first hydroelectric scheme was installed in Wisconsin in September 1882 only three years after Thomas Edison invented the light bulb. Soon after, it became a popular option for electricity generation around the world. At present nearly 20% of the total electricity consumed worldwide comes from hydroelectric plants. In some countries hydroelectricity accounts for more than 80% of the total electricity consumed.

For some years, interest in small hydropower went down drastically due to a number of factors: fast growth in electricity demand globally; progress of other technologies; success of large generation schemes and large grids in bringing down costs; mass production of small diesel sets that are both portable and easily installed; and easy access to affordable diesel fuel.

In the more recent past, the energy crisis, climate change, energy poverty in developing countries, and commitments for achieving the MDGs, has led to a rethink. Planners and policy makers are being urged to review all available energy options, especially those decentralised sources that could play a role supplying poor and isolated communities with energy for development. These sources include small hydropower schemes as well as solar photovoltaic systems, biomass energy generators and wind generators.

Practical Action believes that small hydro is an important and sound energy option to alleviate energy poverty and tackle the MDGs in rural areas. It is a clean option based on indigenous resources, and can be reliable and affordable when appropriate technologies and approaches are used for its implementation, operation and management. It can be economically and socially viable, using local materials and capabilities for installation. Hydro is an option which can generate energy 24 hours a day continuously at its full capacity (if needed), the marginal costs are negligible, and it can thus promote job creation and the productive uses of energy for income generation and social development of communities.

The energy needs of the poor in isolated communities

According to present literature, nearly two billion people in the world have no access to electrical energy (World Bank, 1996). The great majority of these live in isolated rural areas in developing countries, where conventional grid-extension electricity supply is not economically viable, and small diesel sets may be inappropriate due to fuel costs, absence of reliable supplies, and a general lack of technical support.

An important characteristic of rural energy demand is its low density: particularly in remote districts, provision must be made for a large number of users with low levels of demand, leading to the need for a wide range of scheme sizes for small power generation for differing household densities.

The most urgent electricity demands in rural areas are associated with better lighting, better information and communication, security for community members, and production and transformation of products [1]Especially the transformation of agricultural and animal products into more elaborated ones for the market, example cereals into flavour, milk into cheese, etc.. Such demand has to be met from low supply capacity (50W to 200W per family) for consumptions of as much as 50 kWh per family per month. However such small energy quantities provide important benefits, such as critical information through radio and TV (vaccination campaigns, spread of illnesses) [2]An example of the value of information in rural areas is reflected in the results of the national campaign that the government of Peru has done in the early 1990 when the "Cholera" arrived to the country for its first time, despite its very high number of cases the number of death was low, this was mainly because there was a very good campaign to spread information about the main causes and how to control them., (University of Texas Austin, 1996).

Small hydropower: a local resource for local skills

Small hydropower is a local energy resource, which can be usefully harnessed for rural energy demands from small rivers, where there is a gradient of a few meters and the flow rate is more than a few litres per second. Although the amount of available energy is site specific, most developing countries have abundant unexploited potential, which can provide energy for a large proportion of isolated rural communities.

Unlike the shaft power needed for old applications of hydro energy (water wheels), electricity generation requires:

  • modern, faster, more powerful and efficient machines
  • modern controls and instruments
  • better planning and more careful installation methodologies and approaches
  • appropriate operation and management arrangement within the communities to guarantee their sustainability.

Thus, electricity is a modern commodity with great advantages but also more demanding and with some risks if it is not handled properly.

The experience of Practical Action indicates that small hydropower technology is one of the small-scale renewable energy technologies most adaptable to local conditions, with great potential for sustainability. It uses local energy resources - water which is well known and understood by communities. Introduced properly, and within a sympathetic policy framework, it can promote local technology and skills. Small-scale hydro energy schemes can be entirely operated and managed by the communities, reducing costs and making an efficient use of human and natural resources.

Small hydro an economic option

During the last four decades, small hydroelectric plants have been turned down by most government electrification programmes, on the basis that they are 'an expensive electricity generation option'. The investment costs reported by implementing agencies and international consultants range from US$ 3500.00 to about US$ 15,000.00 [3]See more in www.est.org.uk/myhome/generating/types/hydroper kW installed (roughly a cost from US$ 1200.00 to US$ 5000.00 per connection) [4]Based on a supply of 1kW installed per each 3 families, which is very high.

In contrast there are several institutions that have been working in developing countries and report much less cost than the previous shown. The experience of Practical Action after more than 25 years of work in the development in promoting of small hydropower schemes in the different continents is that it is cheap option.

In comparative terms, the investment cost for small hydro is slightly higher than that for its most important competitor for decentralised options -the diesel generator set [5]Diesel sets generally need less initial investment costs but their running costs are high due to the fuel costs and high cost of spare parts and technical services., but its running costs are low because are free of the cost of fuel, while diesel sets require a permanent purchase of diesel, furthermore diesel sets generally have a much shorter life span hence more demanding in reposition costs. Comparing with grid, implementing agencies and governments are reporting steadily increasing costs for grid extension (now ranging from US$ 1,200 to 2,500 per family).

Therefore if investment costs are as claimed by international consultants above, it may appear that small hydro is an expensive option; but when a scheme is made using appropriate technologies and approaches, in country, using local capacity and materials it is much cheaper. From own experience in implementations in Peru, Sri Lanka, Nepal and several other countries, Practical Action has found for small hydropower systems the cost per kW installed range from US$ 1,500 to US$ 3,000 per Unit kW installed, which roughly means an investment cost of US$ 500 to US$ 1000 per connection [6]These costs include resource and needs assessments, commissioning of schemes and connection to users (per family)

Among the reasons for the low cost of small hydro schemes are: Small hydro is by far the most mature technology manufactured in developing countries for renewable electricity generation. Technology research and adaptation has reduced the cost of small hydro, and transfer of technology and know-how to industries, at both national and local level, has created the capacity to manufacture much of the equipment. Alternative materials have been developed, and skills transferred to local consultants to design and implement hydro systems. Local technicians (at community level) can operate and maintain these systems, and appropriate management and administrative models have been developed to suit local needs. As a result, at present, there are several countries with sufficient national capacity to manufacture and install equipment, assess resources and design schemes, at very competitive costs.

For the smaller hydropower schemes, major cost reductions have been achieved using alternative materials and components, local capacity and skills: at present it is possible to find locally manufactured equipment for micro hydropower at one half, or even one third, of its imported equivalent, very occasionally even less. For pico-hydro [7]Pico-hydropower schemes are those bellow 5 kW and micro hydropower those from 5kW to 100kW power capacity., it is possible to find components costing one third to one fifth of the equivalent imported parts (synchronous generators, hydraulic governors and others).

The experience of Practical Action also shows that small hydro can create exceptionally low energy unit (kWh) costs compared to other available options; with correct technologies, implementation and management, the cost of a kWh for micro hydro can be as cheap as about one half of the locally made wind energy systems and about one tenth of the unit energy cost of Solar Home Systems (for decentralised rural application) and finally with one half to one fourth of the unit cost of energy produced with diesel sets [8]The life span considered for the different technologies is: hydro 25 years, solar 30 years, wind 20 years and diesel sets 15 years at a rate of 5 hours of operation daily, all with an interest rate of 10% yearly and fuel cost of US$ 3.0 per Gallon.

Whilst other decentralised accessible energy sources such as solar, wind and biomass energy are often cited as 'competing options', Practical Action regards them rather as complementary options. Where hydro energy resources exist they are often less expensive than other small-scale electrification systems under the same conditions. However there are places where only one of these alternatives exists.

Small hydro is a friendly and sustainable energy option

Small hydro schemes are environmentally friendly; because they are generally built using simple structures with minimum alteration of the watershed conditions, they do not need the construction of temporary settlements or access roads as large infrastructure systems require when built [9]Large infrastructure systems generally require temporal settlements and access roads. They are generally designed to use part of the river flow, which goes back to its original course only few hundreds meters down river, therefore causing minimal or no damage to living species. Small hydro generates neither heat nor greenhouse emissions. It uses local resources and technologies which can easily be understood by most people. These schemes can be built with considerable participation by communities, who can select individuals from among themselves to operate and manage the systems (Tarnawiecki, 2005).

Experience in several countries shows that, when proper technology transfer and capacity building is arranged, local people run the systems easily, can do small repairs and change spare parts, and maintain all the associated civil works.

Small hydropower energy option to promote economic growth and development in isolated communities to tackle the Millennium Development Goals

Small hydropower energy is an excellent option to promote productive uses, economic growth and development for small remote communities in developing countries, because:

  • Hydro is usually the cheapest of all electrification options for isolated communities, where hydro resources exist
  • Hydro energy is a mature technology, widely proven and now manufactured in a number of developing countries
  • Hydro energy resources are fully predictable, and generate energy 24 hours a day, so they can safely be used to provide a range of services to health and educations centres, for drinking water, for communication and other services.
  • Hydro is an appropriate energy option for intensive energy consumption, because the marginal costs for electricity generation are negligible, and it has proven to be effective in a number of applications such as chicken farms, wood processing, agro processing, milk chilling, small mining, and other productive uses and small businesses
  • It can be adapted to the local skills and capabilities for implementation, operation and maintenance
  • Hydro is a clean energy option, which can be harnessed with minimum alteration of the environment and no green house gases emissions.

A typical energy demand curve for a small isolated village is shown in Figure 2 [10]Figure 2 incorporates average data for several monthly measurements, where the base demand does not exceed one third of peak demand. In small communities, peak levels are for lighting, and a few radio and TV appliances - much less energy is used for business or productive uses.

These schemes are generally designed to cope with future demand growth over a 25 to 30 years period leading, at present, to over-supply of available energy for several years. Thus, a typical scheme will supply 24 hours a day full capacity at two or three times maximum current demand. Such supply characteristics make hydropower schemes ideal for promoting productive end uses, provided other conditions are in place such as available markets, and good management structures and tariff schemes. [11]Practical Action has designed and widely tested tariff schemes and management models to suit the supply conditions and the community needs.

Installed capacity and hourly demand, Conchan - click for larger image

What is needed for a faster uptake of hydro energy in Developing Countries?

Bibliography

World Energy Council (WEC), Energy for Tomorrow's World - Acting Now!, WEC Statement 2000, Atalink Projects Ltd, 5th Floor, Regency House, 1-4 Warwick Street, London W1R 6 LE, United Kingdom.

100, The World Bank, Rural Energy and Development, Improving Energy Supplies for Two Billion People, First printing 1996, 1818H Street, N.W., Washington D. C. 20433, U.S.A

University of Texas at Austin, The Geography and Cholera in Peru, The Geographer's Craft Project, Department of Geography, The University of Colorado at Boulder 1996

Teodoro Sanchez, Small hydro as an option for rural areas, Paper submitted to the Regional Consultation Workshop, Sau Paulo, Brazil 1999.

Donald Tarnawiecki, Evaluation of the strategic and replicable aspects of the IDB-FUND for the promotion of Micro Hydro Plnats in Peru, June 2005, (Internal document on the assessment of the revolving fund project after 10 years of operation). (PDF, 493k)

Ing. Wener Hess and Dr. Gunther Dieneman, Electrificacion Rural en el Peru en Base a Pequeñas Centrales Hidroelectricas, Un Proyecto Para el Desarrollo Rural, Publication of "The Peruvian-German Agreement on Rural Electrification" Calle 22, No. 158, Lima 41, Peru

N.P.A Smith, Key Factors the Success of Village Hydro-Electric Programmes, Department of Electrical Engineering, Nottingham Trent University, Nottingham, NG1 5BU, U.K. Renewable Energy, Vol 5, Part II, pp. 1453-1460, 1994, Elsevier Science Ltd. Printed in Great Britain.

Peru Rural Electrification, Activity Completion Report, April 1999, The World Bank
68, Douglas Barnes, Best Practices and Grid Rural Electrification, Preliminary Evidence from Selected Case Studies, The world Bank, web site of The World Bank,

Smail Khennas and Andrew Barnett, Best Practices for Sustainable Development of Micro Hydro Power in Developing Countries, for the Department for International Development (DFID) and The World Bank, 1818 H Street, N.W. Washington D.C. 20433 U.S.A, August 2000

T. Sanchez, A. Williams, N. Smith, The critical Factors for Success of Stand Alone Energy Schemes, paper presented in the International Conference for Renewable Energies for Developing Countries, Washington DC, 6-8 April, 2006.

See also Practical Action's pages on energy projects and access to infrastructure services

Documents

Up-scaling Micro Hydro: a success story? Rajindra de S Ariyabandu (PDF, 327k)
It is over a decade since Practical Action first embarked on micro hydro in Sri Lanka. This report attempts to capture some of the highlights in the development process and assess the path of up scaling micro hydro beyond the initial goal of Practical Action South Asia in the present context.

Social Impact Evaluation Project "Fund For the Promotion of Micro Hydro Power Stations (MHSP)" Dr Julio Calderón Cockburn, 2005 (PDF, 332k)
This paper presents the social impact evaluation of the Project "Fund for the Promotion of Micro Hydro Power Stations (MHSP)", which was carried out by Practical Action (then ITDG) with the support of the Inter American Development Bank (IADB) through a Finance and Technical Cooperation Agreement.

Estudio de Scaling-Up en Micro Centrales Hidroeléctricas: Experiencias De Soluciones Prácticas Graciela Prado Ramos, 2006 (PDF, 618k)
This study looks at the development of the hydroelectric micropower stations with respect to the concept of "scaling up", using the experiences of Practical Action in Latin America. (Spanish language)

Footnotes

  1. Especially the transformation of agricultural and animal products into more elaborated ones for the market, example cereals into flavour, milk into cheese, etc.
  2. An example of the value of information in rural areas is reflected in the results of the national campaign that the government of Peru has done in the early 1990 when the "Cholera" arrived to the country for its first time, despite its very high number of cases the number of death was low, this was mainly because there was a very good campaign to spread information about the main causes and how to control them.
  3. Based on a supply of 1kW installed per each 3 families
  4. Diesel sets generally need less initial investment costs but their running costs are high due to the fuel costs and high cost of spare parts and technical services.
  5. These costs include resource and needs assessments, commissioning of schemes and connection to users
  6. Pico-hydropower schemes are those bellow 5 kW and micro hydropower those from 5kW to 100kW power capacity.
  7. The life span considered for the different technologies is: hydro 25 years, solar 30 years, wind 20 years and diesel sets 15 years at a rate of 5 hours of operation daily, all with an interest rate of 10% yearly and fuel cost of US$ 3.0 per Gallon
  8. Large infrastructure systems generally require temporal settlements and access roads
  9. Figure 2 incorporates average data for several monthly measurements
  10. Practical Action has designed and widely tested tariff schemes and management models to suit the supply conditions and the community needs.
  11. The Fee-in Tariff involves the obligation of the utilities to purchase energy at a full production cost of the energy and guaranteeing for a certain period (20 to 30 years), see: www.epia.org/documents/FeedInTariffEPIA.pdf, www.ceem.unsw.edu.au/documents/Feed-inTariffOptionsv3.pdf
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