# Presentation: 273707

## Hydro Model

- Monisha Shah
- Energy Information Administration
- June 2004

## HYDROPOWER MODEL

**HYDROPOWER MODEL**
**(HYDROMOD)**

**Notes:**
The natural gas model developed in the study was intended to aid decision-making in the pricing of natural gas from the Camago-Malampaya gasfield just discovered at the time. The results, however, does not represent the price of natural gas because it was not based on accurate cost information on the economics of the Camago-Malampaya gasfield, and the exact risk versus return assumptions of the developer was not known.

The specific objective of the natural gas analytical model is to provide a consistent means for assessing various gas supply-demand strategies for the Phil. Government. For a given set of assumptions, the spreadsheet modules produce the economic cost and netback value of gas. 

## Hydro power intro

- Hydropower is using water to power machinery or make electricity. Water constantly moves through a vast global cycle, evaporating from lakes and oceans, forming clouds, precipitating as rain or snow, then flowing back down to the ocean. The energy of this water cycle, which is driven by the sun, can be tapped to produce electricity or for mechanical tasks like grinding grain. Hydropower uses a fuel—water—that is not reduced or used up in the process. Because the water cycle is an endless, constantly recharging system, hydropower is considered a renewable energy.
- When flowing water is captured and turned into electricity, it is called hydroelectric power or hydropower. There are several types of hydroelectric facilities; they are all powered by the kinetic energy of flowing water as it moves downstream. Turbines and generators convert the energy into electricity, which is then fed into the electrical grid to be used in homes, businesses, and by industry.

## Advantages of Hydro Power

- Hydropower is a fueled by water, so it's a clean fuel source. Hydropower doesn't pollute the air like power plants that burn fossil fuels, such as coal or natural gas.
- Hydropower is a domestic source of energy, produced in the United States.
- Hydropower relies on the water cycle, which is driven by the sun, thus it's a renewable power source.
- Hydropower is generally available as needed; engineers can control the flow of water through the turbines to produce electricity on demand.
- Hydropower plants provide benefits in addition to clean electricity. Impoundment hydropower creates reservoirs that offer a variety of recreational opportunities, notably fishing, swimming, and boating. Most hydropower installations are required to provide some public access to the reservoir to allow the public to take advantage of these opportunities. Other benefits may include water supply and flood control.

## Disadvantages of Hydropower

- Fish populations can be impacted if fish cannot migrate upstream past impoundment dams to spawning grounds or if they cannot migrate downstream to the ocean. Upstream fish passage can be aided using fish ladders or elevators, or by trapping and hauling the fish upstream by truck. Downstream fish passage is aided by diverting fish from turbine intakes using screens or racks or even underwater lights and sounds, and by maintaining a minimum spill flow past the turbine.
- Hydropower can impact water quality and flow. Hydropower plants can cause low dissolved oxygen levels in the water, a problem that is harmful to riparian (riverbank) habitats and is addressed using various aeration techniques, which oxygenate the water. Maintaining minimum flows of water downstream of a hydropower installation is also critical for the survival of riparian habitats.
- Hydropower plants can be impacted by drought. When water is not available, the hydropower plants can't produce electricity.
- New hydropower facilities impact the local environment and may compete with other uses for the land. Those alternative uses may be more highly valued than electricity generation. Humans, flora, and fauna may lose their natural habitat. Local cultures and historical sites may be impinged upon. Some older hydropower facilities may have historic value, so renovations of these facilities must also be sensitive to such preservation concerns and to impacts on plant and animal life.

## Review of Hydropower Concepts

***Plant Capacity (C) is a function of Hydraulic head (H) and Discharge (Q)***
***	******C****** ******(MW)****** ************ ******k****** ******x****** ******H****** ******(m)****** x ******Q****** ******(m3/sec)***
- 	    **Where; *****k***** ********  efficiency x 9.81 m/sec****2**** x 10****-6**

## Hydrologic Cycle

- Source: EERE website

## Types of Hydropower Development

*** ******run-of-river hydropower - ******utilize the flow of water of the river requiring little or no impoundment to generate electricity***
*** ******impoundment hydropower - ******uses a dam to store water. Water may be released to meet the changes of energy demand or use to maintain water level.***
*** ******pumped storage hydropower – ******water is pumped from lower reservoir to a higher reservoir during periods of low energy demand. The water is then run down through the turbines to generate electricity to meet peak demand.***

## Impoundment

- The most common type of hydroelectric power plant is an impoundment facility. An impoundment facility, typically a large hydropower system, uses a dam to store river water in a reservoir. Water released from the reservoir flows through a turbine, spinning it, which in turn activates a generator to produce electricity. The water may be released either to meet changing electricity needs or to maintain a constant reservoir level.

## Run-of-River/Diversion

- A diversion, sometimes called run-of-river, facility channels a portion of a river through a canal or penstock. It may not require the use of a dam.

## Micro Hydropower

- A micro hydropower plant has a capacity of up to 100 kilowatts. A small or micro-hydroelectric power system can produce enough electricity for a home, farm, ranch, or village.

## Microhydro again.

- The water in the river is diverted by the weir through an opening in the river side (the `intake') into an open channel. A settling basin is used to remove sand particles from the water. The channel follows the contour of the hillside so as to preserve the elevation of the diverted water. The water then enters a tank known as the `forebay' and passes into a closed pipe known as the `penstock'. This is connected at a lower elevation to a waterwheel, known as a turbine. The turning shaft of the wheel can be used to rotate a mechanical device (such as a grinding mill, oil expeller, wood lathe and so on), or to operate an electricity generator. The machinery or appliances which are energised by the hydro scheme are called the `load'.

## Flow Duration Curve (FDC)

_***FDC***_** –  a cummulative frequency curve that shows the percentage of          ****	****time that specified flows are equaled or exceeded**

## Role of Hydropower in Energy Mix

## HydroMod

**   “****HydroMod is an excel-based model used to determine        the financial and *****economic  viability***** of *****various hydropower plants project*****.” **
** ***** ******financial and economic indicators***
** ****Net Present Value (NPV)**
** ****Internal Rate of Return**
** ****Average Incremental Cost**
** ****Maximum Investment cost**

## HydroMod Worksheets

**   ****Main-Input**
- 	-  **model assumptions and input data worksheet**
**   ****InvestPlan**
**	**-  **investment schedule worksheet** ** **
**   ****Invest_Entry**
**-  manual investment input worksheet **

## HydroMod Worksheets

**FinancialCalc**
**	****- ****	****main model worksheet provides a detailed breakdown of the plant’s output, revenue, costs, and corresponding NPV, IRR and AIC.**
**InvestComp**
- 	-  ** ****calculates the AIC’s and the maximum investment cost of hydropower plant with respect to the alternative power source.**
**Summary**
- 	-	**project summary worksheet showing projects capacity, construction period, AIC, NPV and IRR.**
**	**

**Notes:**
xxxx

## Financial and Economic Indicators

- 1

- 0

- 2

- 3

- 4

- n

- 6

- 7

- 9

- 5

- 8

- 10

- ......

- Fn

- P

- F1

- F2

- F3

- Future Value (Fi):				Present Value (P):
-       *let i = interest rate, then*
- 	F1 = P (1+i)			P = F1 (1+i) -1
- 	F2 = F1(1+i) = P (1+i)2		P = F2 (1+i) -2
- 	F3 = F2 (1+i) = P (1+i)3		P = F3 (1+i) -3
- 	thus,
- 	Fn = P(1+i)n			P = Fn (1+i) -n

## Theory and Analytical Framework

**where price/quantity controls exist, LRMC is difficult to measure thus the *****average incremental cost***** or AIC is used instead; **
**AIC**** ****= **_**NPV of investment and annual operating costs**_**	****NPV of  annual  production**

**Notes:**
AIC is equal to the discounted sum of additional investment and operating costs divided by the discounted volume of additional production

## Theory and Analytical Framework

**  ****Externality cost**** ****– indirect cost to society of energy production and consumption, e.g., cost of new infrastructure or environmental degradation; data on such costs rarely available in developing countries and has to draw on international experience****  **

## Financial and Economic Indicators

- t (year)

***Net Present Value (NPV)***

- Cost        Benefit

- F1

- F2

- F3

- 1

- 0

- 2

- 3

- 4

- n

- 6

- 7

- 9

- 5

- 8

- 10

- ......

- F4

- F5

- F7

- F6

- F9

- F8

- Fn

- F10

- +

- -

- Eq. 1

## Financial and Economic Indicators

***Internal Rate of Return (IRR)***
***    *****IRR = interest rate when NPV = 0**
**     *****from eq.1***

## Basis for Plant Output Function

*Otherwise,*
* ***y = a (8760)     ****(x)****         ****d - (d – f) (x – e)**

***1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35***

*60 %*

*80 %*

***c***

***e***

***d***

***f***

***b***

***(d-f)***

***(b-e)***

***IF(AND(x>0, x<=e),***

***x***

*(*x-e*)*

*∆**y*

## Basis for Investment Allocation

## Inputs/Data Requirements

## Investment Schedules

## Financial Calculations

## Project Summary

## Let’s Run Some Examples

- Using basic hydro project parameters
- Using Philippine-based micro-hydro projects (though not originally intended for micro-hydro, i.e. timelines)
- (see Excel based models)

## Thank You

- Monisha Shah
- Monisha.shah@eia.doe.gov