TECHNO-ECONOMIC ANALYSIS OF SMALL HYDRO POWER PROJECT

Abstract

Energy is essential for the life of every living being. It is considered as an important factor which affects the growth of a nation. It is prudent to use renewable energy resources as fossil fuel reserves are fast depleting and also use of renewable energy resources ensures sustainable development. Hydro energy is proves to be the key renewable source of energy which is economical and pollution free. Small Hydro Power, has emerged as a potential energy producing resource. It is particularly more suitable in isolated and remote areas for generation of energy. If the potential of small hydro power can be fully utilized, dependence on the fossil fuels can be reduced significantly. The techno-economic analysis of a project is very essential as it systematically investigates the viability of the project. A number of factors comes into consideration while technically and economically analyzing a project like mean flow rate, number of turbines installed, capacity factor, rated power of the turbines, inflation rates of different items, rate of return, etc. This work presents a methodology for assessing the techno-economic prospective of SHP projects. The study is accomplished by a study report appropriately adapted for the local market condition, in order to attract the investors on the estimated profitability of the capital to be invested. As per the result obtained, the expected internal rate of return (IRR) value was more than 16% for small hydro power case analyzed. Finally, as per the analysis carried out, the capacity utilization factor, the electricity price escalation rate, initial cost per kW installation, O&M cost inflation rate, rate of subsidization are found to be the parameters which mostly influence the techno-economic viability of similar ventures