-
30 Languages:
Power - Hydro turbine - 62 kW - Isolated-grid / Canada
Case study assignment
You have been hired by a forestry company to prepare a preliminary feasibility study of a potential small hydro project on their behalf. The site is a modern, 70-person logging camp located at the head of a remote coastal inlet. It presently depends on two 100 kW diesel generators for electrical power. To date, a single 100 kW diesel generator has been able to supply the demand; the camp is not yet fully occupied, however, and future electrical demand is predicted to be high due to the use of electricity for hot water and space heating.
The camp is located near a potential hydro power site. The company is considering construction of a micro hydro plant to supply some of the power; with the existing diesel generators providing power during peak times.
Site information
The camp is located in a cove approximately 130 km north of Port Hardy, on the central coast of British Columbia. It is accessible only by water and air.
Based on a reconnaissance survey of the site, it has been determined that the project layout would be relatively simple. An intake site in the bedrock 105 m above sea level would convey up to 0.1 m³/s of the creek flow into a 750 m long PVC penstock, 250 mm in diameter, buried underneath a new, 400 m access road. The powerhouse, located just above the high water mark at the cove, would be close to the existing road as well as the main camp. A single 75 kW Turgo turbine and generator with controls and switchgear would be used. The diesel "back up" units would be incorporated into the powerhouse and a 100 m long, 600 V underground power line would be connected to the existing camp distribution system.
A sophisticated load management system will be required to reduce peak demand and facilitate the integration of the hydro power and the diesel generators. This will add about $30,000 to the cost of the project. The use of an underground, rather than overhead, transmission line will add another $30,000 to the cost.
The company has provided you with the following flow duration curve data, which was obtained during the reconnaissance survey:
Case study assignment
You have been hired by a forestry company to prepare a preliminary feasibility study of a potential small hydro project on their behalf. The site is a modern, 70-person logging camp located at the head of a remote coastal inlet. It presently depends on two 100 kW diesel generators for electrical power. To date, a single 100 kW diesel generator has been able to supply the demand; the camp is not yet fully occupied, however, and future electrical demand is predicted to be high due to the use of electricity for hot water and space heating.
The camp is located near a potential hydro power site. The company is considering construction of a micro hydro plant to supply some of the power; with the existing diesel generators providing power during peak times.
Site information
The camp is located in a cove approximately 130 km north of Port Hardy, on the central coast of British Columbia. It is accessible only by water and air.
Based on a reconnaissance survey of the site, it has been determined that the project layout would be relatively simple. An intake site in the bedrock 105 m above sea level would convey up to 0.1 m³/s of the creek flow into a 750 m long PVC penstock, 250 mm in diameter, buried underneath a new, 400 m access road. The powerhouse, located just above the high water mark at the cove, would be close to the existing road as well as the main camp. A single 75 kW Turgo turbine and generator with controls and switchgear would be used. The diesel "back up" units would be incorporated into the powerhouse and a 100 m long, 600 V underground power line would be connected to the existing camp distribution system.
A sophisticated load management system will be required to reduce peak demand and facilitate the integration of the hydro power and the diesel generators. This will add about $30,000 to the cost of the project. The use of an underground, rather than overhead, transmission line will add another $30,000 to the cost.
The company has provided you with the following flow duration curve data, which was obtained during the reconnaissance survey:
As this is a remote site, a construction camp for about 30 people would be required. A 2.2 km tote road would be necessary; borrow pits are located 20 km away. The nearest connection to the utility's grid is an existing 69 kV line approximately 1.8 km away.
Financial information
Typical financial figures for the analysis are provided by the logging company: income tax rate of 43.6%, inflation of 2.5%, debt ratio of 80%, debt interest rate of 8%, discount rate of 12%, and a debt term of 10 years. The capital cost will be depreciated using a straight-line method over the first 10 years to coincide with the expected life of camp. For the analysis, operation & maintenance labour (O&M) costs are insignificant, as the mechanic who looks after the existing diesel plant will operate the hydro plant. The landed cost of diesel fuel at the site is $0.45/L and approximately 15% of the fuel cost is added for lubrication, repairs and overhauls. The existing diesel generators have an efficiency of 3.0 kWh/L at peak output, but the average efficiency is 2.9 kWh/L. Water rental is expected to cost around $18 per kW of hydro capacity.
Prepare a RETScreen study, documenting any assumptions that you are required to make, and report on the significant conclusion from this analysis.
Solution
The worked-out solution is the data file selected from within the RETScreen Project Database. The user automatically downloads the Project Database file while downloading the RETScreen software.
Teacher's notes
Results
The logging camp at Moses Inlet was first established in 1981. The proximity of the camp to a potential hydro power site drew it to the attention of the Remote Community Demonstration Program, an initiative of Energy, Mines & Resources (now Natural Resources Canada). A site feasibility study was completed in December 1983. The results of the feasibility study were favourable: oil prices were rising and the camp had higher than normal electricity requirements. Construction of the project began in the autumn of 1984. The installed cost of the system was $350,000. The expected annual operating cost of diesel generation was estimated in 1984 to be $83,000, or $0.153/kWh.
Under a contract with the IPP, the Forest Company purchased electricity from the plant for 10 years before buying the plant for $100,000. An escalator in the payments of 6% per year accounted for inflation and further shifted the burden of the purchase towards the end of the project. According to projected fuel cost increases, this would make the project financially viable to the logging company from the first year onwards. A 10-year term was agreed to because this was consistent with the time horizon of logging plans in the area. Other factors contributing to the favourability of the project were the availability of third party financing and the co-funding of the initial feasibility study by Energy, Mines & Resources, which permitted the logging company to investigate its options at no cost.
System description
The Moses Inlet Hydro Power Plant consists of an intake site approximately 105 m above sea level. A 750 m long, 250 mm diameter buried PVC penstock conveys a creek flow of up to 0.1 m³/s to the powerhouse, located just above the high water mark at Ebert's Cove. Two existing 100 kW diesel generators, also located in the powerhouse, supplement the output of a single 75 kW Turgo turbine/generator. A 100 m long, 600V underground power line connects the powerhouse to the camp distribution system.
The energy management system, installed in conjunction with the hydro power plant, was one of the unquantified benefits of the system. The logging company recognised that its loads would increase as the camp became fully occupied and that this would require more diesel capacity (to a total of 300 kW). The load management system had a series of 8 prioritised loads (on space heaters, water heaters, and dummy loads) that would be dropped if the system frequency started to fall below 60 Hz due to increasing uninterruptible demand. If the frequency continued to fall when the managed loads were dropped then the standby diesel would be automatically started and synchronised. Together, the hydropower and the energy management system lead to lower requirements for diesel capacity and decreased fuel use.
Lessons learned
The Moses Inlet Project provided a unique testing ground for micro hydro, third party financing and energy management systems. The use of electricity for hot water and space heating proved to be both an opportunity and a challenge. Although many issues were recognized and dealt with at the outset, there were other issues, arising after the implementation of the system, which necessitated modifications to the basic configuration.
Despite the prevalence of isolated logging camps and high head hydro sites in British Columbia, the Moses Inlet project was the first site to combine the two. This reflects the short payback periods required by the forest sector, a lack of familiarity with the hydro technology and its licensing requirements, and a tendency of the camps to use technology with which they are most comfortable. Camp mechanics, who work on heavy logging equipment, know how to maintain diesel generators, but are generally less familiar with the maintenance of a hydro power system.
Subsequent to the development of the Moses Inlet project it has become yet more difficult for small hydro projects to be financially viable for logging camps. Camps are now portable or even float on water to avoid the increased requirements of forest stewardship. The industry is generally in a transition brought about by increased regulations and uncertainty, which makes large, up-front investments in an energy supply system less palatable.
Photos
Intake Area (elevation 105 m), British Columbia, Canada
Powerhouse (Ebert's Cove - elevation 0 m), British Columbia, Canada
References
Financial information
Typical financial figures for the analysis are provided by the logging company: income tax rate of 43.6%, inflation of 2.5%, debt ratio of 80%, debt interest rate of 8%, discount rate of 12%, and a debt term of 10 years. The capital cost will be depreciated using a straight-line method over the first 10 years to coincide with the expected life of camp. For the analysis, operation & maintenance labour (O&M) costs are insignificant, as the mechanic who looks after the existing diesel plant will operate the hydro plant. The landed cost of diesel fuel at the site is $0.45/L and approximately 15% of the fuel cost is added for lubrication, repairs and overhauls. The existing diesel generators have an efficiency of 3.0 kWh/L at peak output, but the average efficiency is 2.9 kWh/L. Water rental is expected to cost around $18 per kW of hydro capacity.
Prepare a RETScreen study, documenting any assumptions that you are required to make, and report on the significant conclusion from this analysis.
Solution
The worked-out solution is the data file selected from within the RETScreen Project Database. The user automatically downloads the Project Database file while downloading the RETScreen software.
Teacher's notes
- The project is not financially viable as presented in the assignment. It is not that far from viability, however: eliminating the cost of the feasibility study, for example, would make the project profitable.
- The maximum hydraulic losses are greater than the 7% upper limit recommended by RETScreen. This reflects the high allowable penstock headloss factor, which in turn was necessitated by the 250 mm diameter penstock specified in the assignment.
- The estimate of the initial costs produced by the RETScreen "Formula Costing Method" has been adjusted to more accurately reflect the costs for this particular project. While the formula's estimates of costs broken down by item are less accurate, in the aggregate the estimate is quite reasonable: the overall costs are estimated by the formula method to within a few % points of the adjusted estimate.
- In the analysis sheet, the transmission and distribution (T&D) losses have been set to 0%. While this is probably quite close to the real losses for the given power line, the figure is, in fact, immaterial: since the diesel generators and the hydro plant are located in the same powerhouse and use the same transmission line, their losses are identical. Thus any T&D loss figure can be used in this sheet, as long as the same figure is used for both the proposed case and the base case - the greenhouse gas emission reduction will remain constant.
Results
The logging camp at Moses Inlet was first established in 1981. The proximity of the camp to a potential hydro power site drew it to the attention of the Remote Community Demonstration Program, an initiative of Energy, Mines & Resources (now Natural Resources Canada). A site feasibility study was completed in December 1983. The results of the feasibility study were favourable: oil prices were rising and the camp had higher than normal electricity requirements. Construction of the project began in the autumn of 1984. The installed cost of the system was $350,000. The expected annual operating cost of diesel generation was estimated in 1984 to be $83,000, or $0.153/kWh.
Under a contract with the IPP, the Forest Company purchased electricity from the plant for 10 years before buying the plant for $100,000. An escalator in the payments of 6% per year accounted for inflation and further shifted the burden of the purchase towards the end of the project. According to projected fuel cost increases, this would make the project financially viable to the logging company from the first year onwards. A 10-year term was agreed to because this was consistent with the time horizon of logging plans in the area. Other factors contributing to the favourability of the project were the availability of third party financing and the co-funding of the initial feasibility study by Energy, Mines & Resources, which permitted the logging company to investigate its options at no cost.
System description
The Moses Inlet Hydro Power Plant consists of an intake site approximately 105 m above sea level. A 750 m long, 250 mm diameter buried PVC penstock conveys a creek flow of up to 0.1 m³/s to the powerhouse, located just above the high water mark at Ebert's Cove. Two existing 100 kW diesel generators, also located in the powerhouse, supplement the output of a single 75 kW Turgo turbine/generator. A 100 m long, 600V underground power line connects the powerhouse to the camp distribution system.
The energy management system, installed in conjunction with the hydro power plant, was one of the unquantified benefits of the system. The logging company recognised that its loads would increase as the camp became fully occupied and that this would require more diesel capacity (to a total of 300 kW). The load management system had a series of 8 prioritised loads (on space heaters, water heaters, and dummy loads) that would be dropped if the system frequency started to fall below 60 Hz due to increasing uninterruptible demand. If the frequency continued to fall when the managed loads were dropped then the standby diesel would be automatically started and synchronised. Together, the hydropower and the energy management system lead to lower requirements for diesel capacity and decreased fuel use.
Lessons learned
- Intake: The preferred location was at a rock shelf, but due to access difficulty the intake was located below the confluence of 2 creeks. It was difficult to get a good seal in the gravely soils around the intake inlet and sediment and debris were problematic. Eventually the logging camp found a way to access the better location and the loss of water from the smaller creek was offset by the higher head, better water collection efficiency and lower maintenance.
- Diesel Interaction: Starting and stopping of diesel generators on load spikes was a problem. Due in part to the lack of fine time-scale load data, it was not anticipated at the time of system installation that there were some very high loads at the camp that were of very short duration, that could not be switched to off-peak hours, and that these would sometimes occur when the interruptible loads were already off (e.g., a water heater that was already at maximum temperature). These peak loads could overload the hydro plant, causing a diesel generator to start. The resulting cycling caused excessive wear of the diesel generator. The problem was partly alleviated by improving the load bank system and lengthening the shut-off time for the diesel generators. Further improvements would first require recognition of the problem by load monitoring, then reduction of peak demand with a propane-fired heating system. Electricity would be used for lighting and interruptible base-load heating.
- Retrofitting: A much more cost-effective system could have been developed if the camp and the hydro plant were designed at the same time. This would have resulted in better choices for interruptible loads and a combined electrical and propane heating system.
- Financing: Financing proved to be a major challenge. Despite the contract with the logging company, obtaining suitable third party financing and concluding the legal work was very time-consuming and expensive given the size of the loan. Financial institutions have subsequently become more familiar with independent power producers (IPP's), and they are somewhat more comfortable lending to privately financed power developments.
- Dust in Powerhouse: Generator bearings failed after several years due to dust in the powerhouse resulting from truck traffic on the access road. Keeping the powerhouse door shut solved the problem.
The Moses Inlet Project provided a unique testing ground for micro hydro, third party financing and energy management systems. The use of electricity for hot water and space heating proved to be both an opportunity and a challenge. Although many issues were recognized and dealt with at the outset, there were other issues, arising after the implementation of the system, which necessitated modifications to the basic configuration.
Despite the prevalence of isolated logging camps and high head hydro sites in British Columbia, the Moses Inlet project was the first site to combine the two. This reflects the short payback periods required by the forest sector, a lack of familiarity with the hydro technology and its licensing requirements, and a tendency of the camps to use technology with which they are most comfortable. Camp mechanics, who work on heavy logging equipment, know how to maintain diesel generators, but are generally less familiar with the maintenance of a hydro power system.
Subsequent to the development of the Moses Inlet project it has become yet more difficult for small hydro projects to be financially viable for logging camps. Camps are now portable or even float on water to avoid the increased requirements of forest stewardship. The industry is generally in a transition brought about by increased regulations and uncertainty, which makes large, up-front investments in an energy supply system less palatable.
Photos
Intake Area (elevation 105 m), British Columbia, Canada
Powerhouse (Ebert's Cove - elevation 0 m), British Columbia, Canada
References
- McDonnell, Glenn, "Personal communication," Sigma Engineering Ltd., 2000.
- Sigma Engineering, Feasibility of Supplying Hydro Power to Moses Inlet Forestry Camp Under Contract, Conceptual Design and Financial Analysis, Report SEL5327, March 1984.
- Weyell, Chris, "Personal communication," Sigma Engineering Ltd., 2000.
