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Power - Hydro turbine - 8,800 kW / Guatemala
Case study assignment
You have been hired by an independent power producer to prepare a pre-feasibility study of a small hydro project in Guatemala. The independent power producer is considering the development of a project in Guatemala where the electricity generated would be sold into the central electricity grid under the terms of a 15-year Electricity Purchase Agreement.
Site information
The site is located in the municipality of Río Hondo within the department of Zacapa in the Republic of Guatemala approximately 125 km north of Guatemala City. The site is easily accessible by road and a reconnaissance survey of the site has already been completed.
Based on the results of the reconnaissance study it was determined that a small concrete dam approximately 10 m high and 70 m long could be constructed and would provide approximately 125,000 m³ of daily pondage and maintain an average water level elevation of 880 m. A suitable powerhouse location was identified near an existing hot spring resort where the river elevation is 280 m under normal flow conditions. Flooding in the river near the proposed powerhouse location has been known to raise water levels by at least 5 m.
An environmental assessment has determined that a minimum flow requirement of 0.035 m³/s is to be maintained annually. Based on the available topographic mapping, development of the site will involve several sections of canal and tunnel (operating as an underground canal) totalling approximately 4.1 km. Preliminary estimates indicate that an above-ground canal can be constructed for about 2.4 km through rocky terrain with an average side slope of about 30 degrees. The remaining 1.7 km will have to be tunnelled due to extremely steep mountain slopes. A 2.2 km pipeline/penstock will be required between the end of the tunnel/canal conveyance structures and the powerhouse. A tailrace of approximately 30 m will be required. The independent power producer has indicated a preference for two identical turbines to facilitate maintenance and reduce the cost of downtime caused by mechanical failures.
The independent power producer has provided you with the following flow-duration curve data, obtained from the reconnaissance survey:
Case study assignment
You have been hired by an independent power producer to prepare a pre-feasibility study of a small hydro project in Guatemala. The independent power producer is considering the development of a project in Guatemala where the electricity generated would be sold into the central electricity grid under the terms of a 15-year Electricity Purchase Agreement.
Site information
The site is located in the municipality of Río Hondo within the department of Zacapa in the Republic of Guatemala approximately 125 km north of Guatemala City. The site is easily accessible by road and a reconnaissance survey of the site has already been completed.
Based on the results of the reconnaissance study it was determined that a small concrete dam approximately 10 m high and 70 m long could be constructed and would provide approximately 125,000 m³ of daily pondage and maintain an average water level elevation of 880 m. A suitable powerhouse location was identified near an existing hot spring resort where the river elevation is 280 m under normal flow conditions. Flooding in the river near the proposed powerhouse location has been known to raise water levels by at least 5 m.
An environmental assessment has determined that a minimum flow requirement of 0.035 m³/s is to be maintained annually. Based on the available topographic mapping, development of the site will involve several sections of canal and tunnel (operating as an underground canal) totalling approximately 4.1 km. Preliminary estimates indicate that an above-ground canal can be constructed for about 2.4 km through rocky terrain with an average side slope of about 30 degrees. The remaining 1.7 km will have to be tunnelled due to extremely steep mountain slopes. A 2.2 km pipeline/penstock will be required between the end of the tunnel/canal conveyance structures and the powerhouse. A tailrace of approximately 30 m will be required. The independent power producer has indicated a preference for two identical turbines to facilitate maintenance and reduce the cost of downtime caused by mechanical failures.
The independent power producer has provided you with the following flow-duration curve data, obtained from the reconnaissance survey:
A 2.5 km access road will be necessary; borrow pits are located 5 km away and the nearest connection to the utility's grid (69 kV line) is located approximately 4.4 km away. For the greenhouse gas calculations assume that the energy from the small hydro plant will displace #6 oil.
Financial information
The independent power producer wishes to analyse the project using conservative financial parameters. A decision to invest further in the project will only be made if the pre-feasibility analysis indicates that the project is attractive assuming that the project life is no longer than the length of the available power purchase agreement (15 years), no more than 20% equity is required and the debt portion will be financed at 9% and completely paid within 10 years. The utility is currently offering an electricity purchase price of US$0.055/kWh escalated annually at 2.5%, the same rate as general inflation. For simplicity, the project is to be analysed on a before-tax basis. A minimum pre-tax return on investment of 15% is required. All amounts are to be in US dollars.
An exchange rate of US$/CDN$0.63 can be assumed. Equipment, fuel and equipment manufacturer costs in Guatemala can be assumed to be equal to those in Canada. However, labour costs in Guatemala should be assumed to be approximately 70% of Canadian labour costs.
The cost of purchasing the necessary land for the project has been estimated at US$300,000. Annual operation & maintenance (O&M) costs would include insurance (0.5% of total project cost), transmission line maintenance (5% of transmission line and substation cost), spare parts (0.5% of total project cost) and labour cost of US$70,000. An additional 10% (of the annual operation and maintenance budget) should be allowed for administration and 10% for contingencies. It is anticipated that major maintenance costing approximately US$1,000,000 will be required after approximately 10 years.
The objective of the analysis is to determine the optimum installed capacity and the financial feasibility of the project. Prepare a RETScreen study, documenting any assumptions that you are required to make, and report on the significant conclusions 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
Financial information
The independent power producer wishes to analyse the project using conservative financial parameters. A decision to invest further in the project will only be made if the pre-feasibility analysis indicates that the project is attractive assuming that the project life is no longer than the length of the available power purchase agreement (15 years), no more than 20% equity is required and the debt portion will be financed at 9% and completely paid within 10 years. The utility is currently offering an electricity purchase price of US$0.055/kWh escalated annually at 2.5%, the same rate as general inflation. For simplicity, the project is to be analysed on a before-tax basis. A minimum pre-tax return on investment of 15% is required. All amounts are to be in US dollars.
An exchange rate of US$/CDN$0.63 can be assumed. Equipment, fuel and equipment manufacturer costs in Guatemala can be assumed to be equal to those in Canada. However, labour costs in Guatemala should be assumed to be approximately 70% of Canadian labour costs.
The cost of purchasing the necessary land for the project has been estimated at US$300,000. Annual operation & maintenance (O&M) costs would include insurance (0.5% of total project cost), transmission line maintenance (5% of transmission line and substation cost), spare parts (0.5% of total project cost) and labour cost of US$70,000. An additional 10% (of the annual operation and maintenance budget) should be allowed for administration and 10% for contingencies. It is anticipated that major maintenance costing approximately US$1,000,000 will be required after approximately 10 years.
The objective of the analysis is to determine the optimum installed capacity and the financial feasibility of the project. Prepare a RETScreen study, documenting any assumptions that you are required to make, and report on the significant conclusions 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 head losses in the canals and tunnels (if operated as free flowing canals) must be deducted from the gross head value entered in the Energy Model worksheet. In this case, a total of about 4 m must be deducted from the total available gross head of 592 m, which is calculated as the difference between the daily reservoir full supply level of 880 m and the centre line of the pelton turbines at 288 m (280 m plus 8 m to allow for extreme flood levels and a margin of safety). Gross head for the purposes of the RETScreen analysis can, therefore, be estimated to be 588 m.
- The volume of storage in the storage reservoir equates to approximately 14 hours of plant operation at full output, which would produce, on an annual basis, an increase of only a few percentage points (or less) of the estimated energy production. The storage can, however, be used to increase plant efficiency during periods of low flow by allowing the turbines to run for shorter times at higher flows. This effect could be approximated by adjusting the turbine efficiency curve in the low-flow range. In this case, however, the minimum flow is about 33% of the design flow of one turbine and efficiency cannot be improved. The effect of the available storage will be negligible and, therefore, the operation can be classified as "run-of-river."
- The figure below provides an example of the project pre-tax IRR vs. Design Flow. Using NPV as the measure for evaluating the optimum design flow (and thus optimum installed turbine capacity), a number of RETScreen iterations were performed to determine that a design flow of approximately 2.0 m³/s yields the highest NPV. Choosing other financial parameters (e.g. IRR) as indicators of optimal financial performance may yield somewhat different design flow rates. As built, the final project used a design flow rate of 2.5 m³/s. One benefit of the higher turbine capacity is that it gives the developer the possibility to take advantage of the value of peak power, which has not been included in this analysis.
- For this project, the discount rate is interpreted as being equal to the "required rate of return" (see User Manual definition for discount rate), which is 15%. This means that as long as the project's NPV is above zero, the desired rate of return has been achieved and the project is considered to be financially feasible according to the developer's criteria.
- In the "formula" costing method, RETScreen suggests that this project should be classified as a "mini" project but "small" has been used instead, as it was determined that the "small" classification was more appropriate.
vThe costs and benefits of using a penstock with a varying diameter cannot be assessed using the RETScreen "formula" costing method. The formula method does, however, account for the increased wall thickness that is required as the pressure increases over the length of the penstock.
Real project
Results
In March 2000, Inversiones Pasabien S.A. completed construction of a 12 MW high-head hydroelectric project on the Rio Pasabien in the department of Zacapa in the Republic of Guatemala. The site is located approximately 125 km north of Guatemala City. Electricity is sold to INDE (National Electricity Institute) under a 15-year power purchase agreement.
System description
The Pasabien project develops a total gross head of 599.8 m between the upper level of the daily storage pond (Elev. 886.5 m) and the centre line of the pelton turbines (Elev. 286.7 m). The design flow selected was 2.5 m³/s and the total installed capacity is 12 MW.
The 36-m long, 10-m high dam creates a daily storage reservoir with a capacity of 125,000 m³. The full-supply level in the reservoir is 886.5 m. Flow out of the reservoir is controlled by gates in the dam. A sandtrap with a length of 65 m is located just downstream of the dam. The water level elevation in the sandtrap is 877.5 m (allowing 9 m for reservoir regulation). Water is transported from the sandtrap to the pipeline/penstock via a series of above-ground and sub-surface canal (tunnels). In total, there are four section of canal totalling 2,415 m and four tunnel sections totalling 1,685 m. A 1,175-m long, 44-inch (1.12 m) diameter pipeline with a wall thickness of 0.25 inches (6 mm) leads to the penstock which is 1,038 m long and varies in diameter from 44 inches down to 38 inches (0.97 m) over its length. The wall thickness of the penstock varies from 0.25 inches where it joins the pipeline up to 0.625 inches (16 mm) where it enters the powerhouse. The powerhouse encloses two 6 MW, 900 rpm, horizontal-axis pelton turbines directly connected to synchronous generators along with the associated protection and control equipment. Power is generated at 13.4 kV and transformed to 69 kV. The substation is located adjacent to the powerhouse. A 30-m tailrace returns the water to the Rio Pasabien.
Lessons learned
The Pasabien project was developed soon after the Government of Guatemala deregulated the country's electricity market. Guatemala was experiencing an electricity supply shortage and in order to encourage private sector involvement, contracts with favourable terms and conditions were offered and negotiations were streamlined. Recently, however, the government has ceased offering power purchase agreements. Private sector projects can still be built but the power generated must be sold to an electricity distributor or wholesaler. In addition, environmental review and approval of projects has become significantly more complicated, time consuming and costly. As a result, development of new projects has slowed down significantly in Guatemala.
Photo
Hydro civil works - Dam, Pasabien, Guatemala
References
Results
In March 2000, Inversiones Pasabien S.A. completed construction of a 12 MW high-head hydroelectric project on the Rio Pasabien in the department of Zacapa in the Republic of Guatemala. The site is located approximately 125 km north of Guatemala City. Electricity is sold to INDE (National Electricity Institute) under a 15-year power purchase agreement.
System description
The Pasabien project develops a total gross head of 599.8 m between the upper level of the daily storage pond (Elev. 886.5 m) and the centre line of the pelton turbines (Elev. 286.7 m). The design flow selected was 2.5 m³/s and the total installed capacity is 12 MW.
The 36-m long, 10-m high dam creates a daily storage reservoir with a capacity of 125,000 m³. The full-supply level in the reservoir is 886.5 m. Flow out of the reservoir is controlled by gates in the dam. A sandtrap with a length of 65 m is located just downstream of the dam. The water level elevation in the sandtrap is 877.5 m (allowing 9 m for reservoir regulation). Water is transported from the sandtrap to the pipeline/penstock via a series of above-ground and sub-surface canal (tunnels). In total, there are four section of canal totalling 2,415 m and four tunnel sections totalling 1,685 m. A 1,175-m long, 44-inch (1.12 m) diameter pipeline with a wall thickness of 0.25 inches (6 mm) leads to the penstock which is 1,038 m long and varies in diameter from 44 inches down to 38 inches (0.97 m) over its length. The wall thickness of the penstock varies from 0.25 inches where it joins the pipeline up to 0.625 inches (16 mm) where it enters the powerhouse. The powerhouse encloses two 6 MW, 900 rpm, horizontal-axis pelton turbines directly connected to synchronous generators along with the associated protection and control equipment. Power is generated at 13.4 kV and transformed to 69 kV. The substation is located adjacent to the powerhouse. A 30-m tailrace returns the water to the Rio Pasabien.
Lessons learned
- Land Tenure: Obtaining the necessary land rights for a hydroelectric project is fundamental to the success of the project. For the Pasabien project, inadequate land surveying information led to difficulties and added to the cost of obtaining land rights.
- Tunnel to Pipeline Transition: Understanding the full extent of the geology at a site can be difficult and extremely costly. During construction of the Pasabien project unforeseen geotechnical problems were encountered at the transition between the end of the last tunnel, which acts as a forebay, and the pipeline. Poor rock conditions were found in the last 60 metres of the tunnel and required that the pipeline be lengthened and realigned.
- Flood Flows: Adequately estimating the design flood flow is key to the success of a hydroelectric project. During the construction of the Pasabien project, Hurricane Mitch caused extremely high flows in Rio Hondo, which were much higher that the anticipated (design) flood flow. Luckily, only a small part of the dam and intake works had been completed and the resulting damage was limited primarily to construction equipment that was on-site at the time. Given the intensity of the event, it was decided to redesign the gates in the dam to allow for a significantly higher flood flow.
The Pasabien project was developed soon after the Government of Guatemala deregulated the country's electricity market. Guatemala was experiencing an electricity supply shortage and in order to encourage private sector involvement, contracts with favourable terms and conditions were offered and negotiations were streamlined. Recently, however, the government has ceased offering power purchase agreements. Private sector projects can still be built but the power generated must be sold to an electricity distributor or wholesaler. In addition, environmental review and approval of projects has become significantly more complicated, time consuming and costly. As a result, development of new projects has slowed down significantly in Guatemala.
Photo
Hydro civil works - Dam, Pasabien, Guatemala
References
- Arrivillaga, Raul Aguilar, "Personal communication," Consultora Centroamericana, S.A., 2002.
- Bennett, Kearon, "Personal communication," Ottawa Engineering, 2002.
- Gonzalez, Heber, "Personal communication," Inversiones Pasabien, S.A., 2002.
