HYDROPOWER

1. HYDROPOWER

2. Objective: • The student will be become familiar with the Corps policy for hydropower development. • The student will be have a basic understanding of economic evaluation concepts.

3. US Sources of Electrical Power Other 6% Hydro 13% Nuclear 14% Fossil Steam 62% Gas Turbine 5% Corps of Engineers 24% (21,000 megawatts) The Corps has an $18 billion investment in hydropower facilities. Generates $2 - $3 billion in annual revenue Big Business!! Others 51% Bureau of Reclamation 16% Commercial 3% Tennessee Valley Authority 6%

4. Hydropower Statutes • River and Harbor Act of 1912 • Flood Control Act of 1917 • Federal Water Power Act of 1920 • Flood Control Act of 1938 • Flood Control Act of 1944 (Section 5) • Water Resources Development Act of 1976 • Water Resources Development Act of 1986

5. Hydropower Guidance • ER 1105-2-100, Planning Guidance • EP 1165-2-1, Digest of Water Resources Policies and Authorities • EM 1110-2-1701, Hydropower Manual • ER 1110-2-1454, Corps Responsibilities for Non-Federal Hydroelectric Power Development

6. Hydropower Considerations • Consider hydropower only in multipurpose projects when non-Federal development is impractical • Encourage non-Federal development since hydropower is a marketable commodity • Feasibility studies are 50/50 cost shared • Construction is 100% non-Federal cost paid up front • Consult Federal Energy Regulatory Agency and Federal Power Marketing Agency • Most Common HP Activities are Major Rehabs and WS Reallocations

7. Hydropower BenefitsOverall Approach • NED power benefits normally based on cost of the most likely thermal alternative • Call for help: • Design: Brent Mahan 503-808-4200 (Hydropower Design Center) • Benefits: Russ Davidson, NWP, 503-808-4222 (Hydropower Analysis Center) • HQ-BLM: Kamau Sadiki, 202-761-4889

8. Alternative Thermal Plants • Base load (20-24 hours per day) • coal fired steam • nuclear • Intermediate load (4-10 hours per day) • cycling coal • combined cycle • Peaking/reserve (< 4 hours per day) • combustion turbines

9. Elements of Power Benefit Computation • Capacity benefits • Energy benefits

10. Capacity Value • Fixed costs associated with the increment of alternative thermal power plant capacity that would be displaced by the hydro plant • Primarily construction costs but also includes fuel inventory and fixed O&M costs • Unit Value is ($/MW-yr) • MW of Installed Capacity • Developed by FERC and Hydropower Analysis Center (NWP)

11. Energy Value • Variable costs associated with the thermal power plant generation displaced if the hydro plant is added to the system instead of the thermal alternative • Primarily fuel costs, but includes variable O&M costs • Unit Value is $/MwH • MwH/yr of annual energy • Usually Done With System Production Cost Model • Developed by Hydropower Analysis Center • PLATTS

12. System Production Cost Analysis • Define the system demand • Usually done by working with regional PMAs and Utilities • Define the generating resources needed in each hour to meet the demand • Done with optimizing production cost models assuming the lowest cost resource mix will be used to meet demand • Estimate the system cost of production in without project condition • Estimate the system cost of production in with project condition • Compare system costs in without and with condition

13. System Production Costs Analysis - Considerations • Data intensive – Must account for system load demand and all generating resources for every hour of the year over period of analysis • Beyond the scope for most Districts, so call the Hydropower Analysis Center (HAC)

14. HP Challenges • Aging infrastructure • Major Rehabilitation • Up-Rate potential • Alternative financing • Competition with WS and other purposes

15. Summary • Corps policy on new hydropower development – Encourage Non-Federal • Primary HP activities are Major Rehab and WS Reallocations • Economic evaluation based on alternative projects and system costs with and without hydropower project • Contact HDC/HAC - NWP