HYDROPOWER

Objective:

• The student will be become familiar with the Corps policy for hydropower development.

• The student will be have a basic understanding of economic evaluation concepts.

Hydro 13%

Nuclear 14%

Gas Turbine 5%

Fossil Steam 62%

Other6%

Corps of Engineers 24%(21,000 megawatts)

Bureau of Reclamation 16%

Tennessee Valley Authority 6%

Commercial 3%

Others 51%

The Corps has an $18 billion investment in hydropower facilities.

Generates $2 - $3 billion in annual revenue

Big Business!!

US Sources of Electrical Power

Hydropower Statutes

• River and Harbor Act of 1912

• Flood Control Act of 1917

• Federal Water Power Act of 1920

• Flood Control Act of 1938

• Flood Control Act of 1944 (Section 5)

• Water Resources Development Act of 1976

• Water Resources Development Act of 1986

Hydropower Guidance

• ER 1105-2-100, Planning Guidance

• EP 1165-2-1, Digest of Water Resources Policies and Authorities

• EM 1110-2-1701, Hydropower Manual

• ER 1110-2-1454, Corps Responsibilities for Non-Federal Hydroelectric Power Development

Hydropower Considerations

• Consider hydropower only in multipurpose projects when non-Federal development is impractical

• Encourage non-Federal development since hydropower is a marketable commodity

• Feasibility studies are 50/50 cost shared• Construction is 100% non-Federal cost paid up front• Consult Federal Energy Regulatory Agency and

Federal Power Marketing Agency• Most Common HP Activities are Major

Rehabs and WS Reallocations

Hydropower BenefitsOverall Approach

• NED power benefits normally based on cost of the most likely thermal alternative

• Call for help:• Design: Brent Mahan 503-808-4200

(Hydropower Design Center)• Benefits: Russ Davidson, NWP, 503-808-4222

(Hydropower Analysis Center)• HQ-BLM: Kamau Sadiki, 202-761-4889

Alternative Thermal Plants

• Base load (20-24 hours per day)– coal fired steam– nuclear

• Intermediate load (4-10 hours per day)– cycling coal– combined cycle

• Peaking/reserve (< 4 hours per day)– combustion turbines

Elements of Power Benefit Computation

• Capacity benefits

• Energy benefits

Capacity Value

• Fixed costs associated with the increment of alternative thermal power plant capacity that would be displaced by the hydro plant

• Primarily construction costs but also includes fuel inventory and fixed O&M costs– Unit Value is ($/MW-yr)– MW of Installed Capacity

• Developed by FERC and Hydropower Analysis Center (NWP)

Energy Value

• Variable costs associated with the thermal power plant generation displaced if the hydro plant is added to the system instead of the thermal alternative

• Primarily fuel costs, but includes variable O&M costs– Unit Value is $/MwH– MwH/yr of annual energy

• Usually Done With System Production Cost Model– Developed by Hydropower Analysis Center– PLATTS

System Production Cost Analysis

• Define the system demand– Usually done by working with regional PMAs and Utilities

• Define the generating resources needed in each hour to meet the demand– Done with optimizing production cost models assuming the

lowest cost resource mix will be used to meet demand

• Estimate the system cost of production in without project condition

• Estimate the system cost of production in with project condition

• Compare system costs in without and with condition

System Production Costs Analysis - Considerations

• Data intensive – Must account for system load demand and all generating resources for every hour of the year over period of analysis

• Beyond the scope for most Districts, so call the Hydropower Analysis Center (HAC)

HP Challenges

• Aging infrastructure

• Major Rehabilitation

• Up-Rate potential

• Alternative financing

• Competition with WS and other purposes

Summary

• Corps policy on new hydropower development – Encourage Non-Federal

• Primary HP activities are Major Rehab and WS Reallocations

• Economic evaluation based on alternative projects and system costs with and without hydropower project

• Contact HDC/HAC - NWP