Project Process:
The Project becomes operational in about 3 to 5 yrs. In between RoC, MoU to be signed with Govt., Water level to be measured (least for 2 lean seasons), Detailed Project Report (DPR) to be prepared, Techno Economic Viability (TEV) to be done, All clearances to be taken (with Forrest, Environment, Fisheries, Panchayat, IPH, etc), Implementation Agreement to be executed (IA), Land to be acquired, Power Purchase Agreement to be signed, Techno Economic Clearance (TEC) to be taken, Loan proposal derived along-with CDM registration in first one (1) year, then next 3 to 4 years will take in construction of project (depending upon it's size).
Project Economics:
1MW Project produces 1000 unit electricity per hour = 24000 units electricity per day x 365 days = 87.60 lakh units electricity per annum on 100 % capacity utilization. But assuming if plant runs on 50% efficiency then it will produce 43.80 lakh units (KWH) electricity per annum which will give revenue of Rs 1.26cr per annum (at the prevailing purchase price of Rs. 2.50 per unit). Total cost per MW works out to be Rs. 6-7 crore approximately depending upon project to project. The debt equity ratio is considered 70:30 by financial institutions/banks and for determination of tariff, return on equity is 14-16%, interest on Debt 11-12% is considered by govt. authorities.
Though initial investment is high, but O&M expenditure is very less. Payback period is generally 10-15 years but the return is very high for remaining period of the project
Important Points to be noted:
1. Project promoters/ investors are allowed to use electricity in captive use or sell into open market outside the state to fetch better price up to certain extend of generation %age (subject to size and type of project) as per the policy framework.
2. Projects working on >40 % PLF are considered viable.
3. Project IRR to investors generally works out to 15-20%.
4. The royalty is payable to government in terms of free power ranging from 12% to 30%.
FAQ:
How much is the world’s electricity supplied by Hydroelectric Power Plants?
2700 TWH is generated every year. Hydropower supplies at least 50% of electricity production in 66 countries and at least 90% in 24 countries.
What are the different types of turbines used in Hydroelectric Power Plants?
There are basically four types of power plants:
· Pelton turbines: It is impulse turbine which is normally used for more than 250 m of water head.
· Francis: This is a reaction turbine which is used for head varying between 2.5m to 450m.
· Kaplan: It is propeller type of plant with adjustable blades which are used for heads varying between 1.5 m to 70 m.
· Propeller: It is used for head between 1.5 to 30 m.
· Tubular: This is used for low and medium height projects or normally for head <15 m.
What is the classification of Hydro Projects based on Installed Capacity?
Micro Projects: Up to 100 KW.
Mini Projects: 101KW to 2 MW.
Small projects: 2 MW to 25 MW.
Mega projects: Hydro projects with installed capacity >= 500 MW.
Which is the largest Hydropower station in the world?
Three Gorges project in China on Yang-Yang river is the largest power station in the world having installed capacity of around 22,500 MW.
How does cost of generation from Hydropower Plant compare with other sources of electricity?
The hydro power generation is highly capital-intensive mode of electricity generation but being renewable source of energy with no consumables involved; there is very little recurring cost and hence no high long term expenditure. It is cheaper as compared to electricity generated from coal and gas fired plants. It also reduces the financial losses due to frequency fluctuations and it is more reliable as it is inflation free due to not usage of fossil fuel.
Why hydropower is called renewable source of energy?
Hydropower is called renewable source of energy because it uses and not consumes the water for generation of electricity, and the hydropower leaves this vital resource available for other uses.
Which is the oldest Hydropower Plant in India?
The oldest Hydropower power plant is in Darjeeling District in West Bengal. Its installed capacity is 130KW and was commissioned in the year 1897.
What is the estimated total Hydropower potential of India?
The hydro power potential of India is around 1,48,701 MW and at 60% load factor, it can meet the demand of around 84,000 MW.
How much of the total Hydro power potential has been exploited so far in India?
Around 19.9% of Hydropower potential has been exploited in India.
What are the different types of dams?
Different types of dams are conventional concrete dam, Roller compacted concrete dam, rock fill dam, Concrete Faced Rock fill Dam (CFRD), Earth fill dam, arch dam, barrages etc.
Why the unit sizes of hydro generating machines are not standardized as in case of thermal power plants?
Since the size of hydro generating machines are based on availability of water in river and the water head available at a particular project site, the size of the machines keeps varying from location to location and river to river. The sizes are also based on logistics and variation of water in river during the year.
What is the record completion period of a Hydro Power Station in India of more than 100MW?
Chamera – II Hydro Project (300 MW) in Dist - Chamba, HP has been completed in a record period is Four & Half Years.
Which Hydro Station has been completed recently which has the lowest tariff rate?
Teesta Hydro Project-V (510 MW) in the State of Sikkim was completed in April, 2008. The sale rate of this project is @Rs.1.53/ kWh (approx.) to beneficiary states of Eastern Region as per the petition filed in Central Electricity Regulatory Commission (For FY 2008-09).
What are the different types of Hydro Schemes?
· Different types of Hydro Schemes are:
· Purely Run – of - River Power Station.
· Storage type Power Station.
· Run – of – River Stations with Pondage.
Which is the largest Operating Hydro Power Station in the World?
The world’s Largest Hydro Electric Power Station is ITAIPU with installed capacity of 12600 MW and a reliable output of 75,000 MU in a year. It is located at the Border of Brazil and Paraguay.
What are the major reasons for balancing Hydro-thermal mix?
Seasonal load curves of our regional grids match with the pattern of hydro power generation. During summer/monsoon season when the generation at hydro power plants is high, the load factor of the system is high due to heavy agricultural load. During winter, the thermal stations operating at base load and hydro stations working as peak load stations will take care of weather beating loads. Thus the operational needs of hydro & thermal stations are complimentary and the balanced mix helps in optimal utilization of the capacity.
What are approaches to tackle sedimentation problem of reservoir?
The following are some approaches to tackle sedimentation problem of reservoir:
· Catchment Area Treatment (CAT) for reduction of silt load includes a forestation of the catchment area and Environmental works such as construction of check dams.
· Effective desilting arrangements for prevention of silt.
· Silt resistant equipments of withstanding the silt.
· Effective operation of the reservoir to minimize silt deposition.
What are the effects of sedimentation in Hydropower stations?
The major effects of reservoir sedimentation are:
· It reduces the active storage capacity, which may reduce the capability of the reservoir to deliver the benefits in course of time.
· It makes the flood management in the reservoir more difficult.
· Damages to turbines and other under water parts due to abrasive action of silt.
What are the major thrust areas in the field of Environmental Conservation & Management for developing hydropower?
Following safeguards/management plans are implemented at various NHPC projects to ensure development of hydropower in an environmentally sustainable manner:
· Compensatory A forestation in lieu of forest land diverted for the project.
· Catchment Area Treatment (CAT) to minimize erosion in the catchment of the reservoir, thereby reducing siltation in the reservoir.
· Resettlement & Rehabilitation of Project Affected Population.
· Rejuvenation of Dumping Sites and Quarry Sites, using engineering and biological measures.
· Reservoir Rim Treatment plan to stabilize reservoir periphery.
· Conservation measures, to conserve flora and fauna native to the ecosystem of the area.
· Subsidized Fuel Distribution to worker population and project affected population to minimize fuel demands on the adjacent forests.
· Health Management Plan for the worker population and affected population to maintain optimum health standards.
· Fishery Management by construction of fish ladders, wherever possible, to enable migration of fishes and by promoting reservoir fisheries.
· Green Belt Plan to make the surroundings of project construction areas green.
· Dam Break Analysis and Disaster Management Plan for downstream areas vulnerable to flooding in case of Dam breach.
·
What is the standard debt equity ratio for financing a hydropower project?
Standard Debt-Equity Ratio is 70:30
What is Availability Based Tariff (ABT)?
v ABT is a mechanism for recovery of fixed charges of a generating station or transmission licensee through the commercial means of incentives or disincentives:
Ø It is a performance-based tariff for the supply of electricity by generators owned and controlled by the central government or those which involved in selling power in more than one state.
Ø It is also a new system of scheduling and dispatch, which requires both generators and beneficiaries to commit to day-ahead schedules.
Ø It is a system of rewards and penalties seeking to enforce day ahead pre-committed schedules, though variations are permitted if notified One and on half hours in advance.
Ø It facilitates grid discipline.
Ø It helps in trading of capacity and energy and facilitates the merit order dispatch.
Ø It has three parts
v A fixed charge (FC) payable every month by each beneficiary to the generator for making capacity available for use. The FC is not the same for each beneficiary. It varies with the share of a beneficiary in a generators capacity. The FC, payable by each beneficiary, will also vary with the level of availability achieved by a generator.
v An energy charge (defined as per the prevailing operational cost norms) per kWh of energy supplied as per a pre-committed schedule of supply drawn upon a daily basis.
v A charge for unscheduled interchange (UI charge) for the supply and consumption of energy in variation from the pre-committed daily schedule. This charge varies inversely with the system frequency prevailing at the time of supply/ consumption.
What are the components of Bulk Electricity tariff of Hydro Plants?
Hydro tariff (for central generating company or the generating company which sells power to more than one state) means the Annual Fixed Charges (AFC) in respect of each Hydro Generating Station which is determined by the Central Electricity Regulatory Commission. The components of AFC are:
1. Interest on loan capital.
2. Depreciation.
3. Return on equity.
4. Operation and maintenance expenses.
5. Interest on working capital.
The AFC is recovered in the form of capacity charges (50% of AFC) and energy charges (50% of AFC).
How much Return on Equity is allowed to Hydro Generating Stations?
Return on Equity is allowed on pre tax basis at the base rate of 15.5%.
Rate of pre tax return on equity = 15.5, (1-t),
t = applicable tax rate.
What are the ‘pass through’ components in the tariff of Hydro Generating Stations?
Only Foreign Exchange Rate Variations (FERV) as pass through component in tariff w.e.f. 01.04.2009.
What is Net Present Value (NPV)?
NPV is present value of future cash flows. NPV compares value of money today to the value of that money in the future taking inflation & returns into account. If the NPV of a project is positive then the project is financially viable. If NPV of a project is negative the project is not viable.
What is Internal Rate of Return (IRR)?
It is interest rate that makes NPV of all cash flows of a project equal to Zero. Essentially this is the return that a project would earn if it invest money in itself rather than elsewhere. This is the rate which equates discounted cash outflows flows & discounted cash inflows. Higher the IRR of the project better is the financial return on the Investment.
For business enquiry please contact: ---
Santosh Kumar Singh
(Managing Principle)
X-PARTY CONSULTANT
A corporate catalyst…
Fax : +91-177-2671630
Phone : +91-92188 43181
Mobile : +91 98917 97371 & 98054 05724
Email : xpconsultant@gmail.com