INNOVATIVE SMALL HYDRO TECHNOLOGIES

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• INNOVATIVE SMALL HYDRO TECHNOLOGIES
• Upgrading Refurbishments (Modernization)
• Niels M. Nielsen, P.Eng.
• Manager, Sustainable Energy Solutions
• BC Hydro Engineering

Waterpower XIII July 2003
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Introduction

• INTRODUCTION
• Of the 30 hydroelectric sites (up to 2,700 MW)
  operated by BChydro, 8 have a capacity lt 20MW.
• The total capacity of these projects is 53MW -
  roughly 0.5 of the BChydro Generating Capacity
  (10,008MW). Alternatively, the largest 5 projects
  contribute roughly 84 (8,383MW)
• Small hydro plants pose a special problem as part
  of a large utility
• Small revenue stream
• High unit cost based on large scale utility
  processes (Union effect vs. IPP approach)
• Can have a high environmental/risk profile

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Introduction

• These sites require special considerations when
  modernizing
• Must follow business practices to ensure
  profitability and maximum value
• Modern equipment (including automation and remote
  control) is required.
• Low Operation and Maintenance (OM) costs
• Minimal environmental / risk profile.

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Innovative Approaches to Modernizing Small Hydro
Plants

• OUTLINE
• Modernization Drivers
• Process to select Modernization Plan
• Innovative Approaches (examples)
• Management Approaches (asset planning software,
  implementation, risk management training)
• Summary

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MODERNIZATION DRIVERS
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Innovative Approaches to Modernizing Small Hydro
Plants

• Small Hydro Asset Life Cycle

10 20 30 40 Stage of Diminishing Returns
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Innovative Approaches to Modernizing Small Hydro
Plants

• The Modernization Drivers
• Modernization provides the best opportunity to
  make changes the drivers include
• Licensing/regulatory requirements
• Increased profitability (improved dependability)
• Reduced labour and/or costs (reduced OM)
• Competition in the Electricity Market
• New products (ancillary services)
• New technology/existing equipment obsolete
• Changing customer/stakeholder requirements
• Risk reduction

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PROCESS TO SELECT MODERNIZATION PLAN
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Innovative Approaches to Modernizing Small Hydro
Plants

• Prioritizing Small Hydro Facilities
• Core
• Does the plant provide system stability?
• Strategic
• Does the facility increase supply in a supply
  constrained region?
• Does the facility belong to a river system?
• Non Strategic
• Financial contributors

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Innovative Approaches to Modernizing Small Hydro
Plants

• Establish Need for Capital Investment
• Criterion used to establish value of each small
  hydro facility

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Asset Management Process to Modernize Hydro Plants
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Innovative Approaches to Modernizing Small Hydro
Plants

• Life Extension Modernization Plan

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Innovative Approaches to Modernizing Small Hydro
Plants

• Plant Survey Methodology for Assessing Needs
  Opportunities

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INNOVATIVE APPROACHES (CASE HISTORIES)
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Innovative Approaches
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Innovative Approaches
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Case Histories - Aberfeldie
Aberfeldie Penstock
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Case Histories - Aberfeldie
Aberfeldie Turbine Runner
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Case Histories - Aberfeldie

• Status Quo
• 5MW powerhouse built in 1922 (80 years old).
• Requires 20M of investment to continue to
  operate.
• Original dam suffered severe deterioration due to
  ice build-up and avalanches - rehabilitated
  in1953 and now meets all current dam safety
  standards.
• Penstock at end of life.

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Case Histories - Aberfeldie

• Potential Solutions
• Three Options
• Redevelop to 30 MW with 120 GWh per annum
  (F2006).
• Refurbish at 5MW
• Run to failure
• Refurbishment is not economic
• Redevelopment is more economic, but not as
  economic as other BC generation development
  options.
• Recommend different operation. For example,
  contract out routine work.

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Case Histories - Falls River
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Case Histories - Falls River

• Status Quo
• Two unit powerhouse totaling 7MW - built in 1930
• Requiring 13 M of investment to continue to
  operate.
• End of the line, isolated and difficult to access
  (50km south of Prince Rupert)
• Significant rehabilitation work completed in
  1992
• Dam stabilized with rock anchors
• Plant automated (This is a remote plant and
  existing operators were retiring)

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Case Histories - Falls River

• Recommendation
• Redevelop to 20 MW with 78 GWh per annum (F2008).
• Transmission lines capacity constraints may be an
  issue - Brown lake (operated by IPP) is also on
  this line.
• Recommend different operation. For example,
  contract out routine work.

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Case Histories - Shuswap
Shuswap Penstock (summer)
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Case Histories - Shuswap
Shuswap Penstock (winter)
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Case Histories - Shuswap

• Status Quo
• 6MW powerhouse built in 1929.
• Project comprises of Wilsey and Sugar Lake Dam
  located at 35km and 55km east of Vernon
• Challenges
• Downstream of the plant is a fish hatchery in
  addition to a high value natural salmon stream
• Deteriorating wood stave penstock and surge tank
  on failing rock fill foundation (also rock-fall
  hazard at tunnel/penstock interface)
• Rehabilitation of low level outlet in dam was
  required

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Case Histories - Shuswap

• Solutions
• Bypass Valve installed for reliable water release
  at facility if unit trips (low level outlets are
  not automated)
• In 1993, the facility was refurbished/rebuilt
• one penstock was rebuilt in steel. The surge
  tower was eliminated - not required for steel
  penstock.
• Generating unit refurbished during penstock
  rebuild.
• Low level outlets refurbished

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Case Histories - Woodfibre
Woodfibre penstock, screen house and surge tank
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Case Histories - Woodfibre

• Woodfibre mill built in 1955 is located near
  Squamish, BC. The electricity needs of the mill
  are provided by a 2.5MW Pelton wheel impulse
  turbine.
• Age related efficiency losses
• Reduced output 2.1 MW (1955) to 1.5 MW
• Deteriorating penstock (16)
• Reduced turbine efficiency (1)
• Realigned penstock (additional 90 degree bends
  and valves - following slide) (1)
• Increased mill use of high pressure water (10)

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Case Histories - Woodfibre
Penstock realignment for Mill Expansion
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Case Histories - Woodfibre

• Generation/water supply challenges
• Long penstock for mill water supply - too
  expensive to replace for turbine use only.
• Penstock realignment is not cost effective.
• New Pelton wheel marginally cost effective.
• Solutions
• Benefits from improved management of the source
  of high pressure mill water and adjustment to
  turbine operating point.
• Run until end of life. At this point, penstock
  replacement is justifiable.

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Case Histories - Butlers Gorge
Tasmania, Australia
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Case Histories - Butlers Gorge

• Status Quo
• 12.7MW powerhouse commissioned in 1951
• Static Head of 50m (Butlers lake)
• The water from the lake also supplies Tarraleah
  power station via a tunnel then canal. Before
  entering the tunnel, energy is dissipated via an
  energy dissipater valve (next slide).
• Recommendations
• Develop a mini hydro project to take advantage of
  lost energy. Replace energy dissipater valve with
  a 2.5MW turbine.

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Case Histories - Butlers Gorge
Energy dissipater valve in operation
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MANAGEMENT APPROACHES
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Facility Asset Planning
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Asset Management

• APTUS Asset Planning System
• APTUS is a software tool that streamlines the
  Asset Planning process.
• APTUS uses a discounted cash flow that recognizes
  economic and financial methods to provide
  decision support regarding capital and operating
  investment decisions. It also addresses
  non-financial issues using multiple account
  analysis.
• APTUS has the ability to analyze the value of a
  portfolio of assets in a market context, and
  hence the value added from asset enhancements or
  risk reduction initiatives
• Information from engineering assessments is
  stored and used as input.
• Report provide a ranking of projects based on
  standard criteria NPV, PV of EVA, B-C and value
  weighted non financial criteria.
• Model has flexibility to interact with enterprise
  software packages (PeopleSoft, SAP, JD Edwards
  etc.) It can also be used on a stand alone basis.

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Aptus Financial Model Overview
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Aptus Base Case Forecasting
Customer Classes Peak/Load Profile Growth
Forecasts Rate Forecasts Market Prices
Demand Forecast
Core
Base Case Business Model
Report Structure
Supply Forecast
Asset Classes Generation/Supply Profile
Expansion Forecasts Variable Cost
Forecasts Other Production Costs
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Aptus Scenario Planning Model
Financial Return Goals liquidity, activity,
return, coverage Supply Mix Objectives
hydro, fossil, renewable, etc. Other Triple
Bottom Line Goals
Financial Performance Goals
Framework
Scenario Planning Model
What if? What is the effect?
Report Structure
Macro Variable Changes demand, supply,
growth, price, etc. Micro Variables Changes
spending, discount rates, etc. Sensitivity
Analysis
Risk Opportunity
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Reports Menu
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Innovative Approaches to Modernizing Small Hydro
Plants

• Investment Risk Minimized

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Risk Management

• Strategic Objective (overall goal for each small
  hydro project)
• Project Objectives, covering safety, financial,
  power quality, dependability, compliance, etc.
• Risk Assessment of likelihood and consequences of
  plant not meeting objectives
• Risk Management includes measures to ensure
  objectives met.

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Innovative Approaches to Modernizing Small Hydro
Plants

• Training
• The application of knowledge is a crucial part of
  a change process. To learn and benefit from new
  approaches to modernization, two initiatives are
  available
• Through a management consulting arrangement with
  roll-out of a modernization plan on a specific
  plant and hands on training for future work.
• Classroom workshop simulation training to
  promote understanding of the methodology.

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Innovative Approaches to Modernizing Small Hydro
Plants

• Summary
• Small Hydro plants age and eventually require
  modernization
• Present technical and business drivers can be
  markedly different to original considerations.
• Opportunities often available to increase value.
• Systematic processes lead to greatest gains
  (asset management).
• Innovative and new approaches can improve
  modernization outcomes.