1. INNOVATIVE SMALL HYDRO TECHNOLOGIES
Upgrading & Refurbishments (Modernization)
Niels M. Nielsen, P.Eng.
Manager, Sustainable Energy Solutions
BC Hydro Engineering
Waterpower XIII July 2003

2. Introduction INTRODUCTION
Of the 30 hydroelectric sites (up to 2,700 MW) operated by BChydro, 8 have a capacity < 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

3. 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 (O&M) costs
Minimal environmental / risk profile.

4. 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

5. MODERNIZATION DRIVERS

6. Innovative Approaches to Modernizing Small Hydro Plants
Small Hydro Asset Life Cycle
Acquire New Asset
Operate
Maintain
Monitor
Decision Point
Replace Component
Modernize
Run to Failure
Age (years)
Effort
Stage of
Diminishing Returns

7. 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 O&M)
Competition in the Electricity Market
New products (ancillary services)
New technology/existing equipment obsolete
Changing customer/stakeholder requirements
Risk reduction

8. PROCESS TO SELECT MODERNIZATION PLAN

9. 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

10. Innovative Approaches to Modernizing Small Hydro Plants
Establish Need for Capital Investment
Criterion used to establish value of each small hydro facility

11. Asset Management Process to Modernize Hydro Plants
Collate Contemporary Practice (Expert knowledge and Literature Review)
Support process with condition,
performance and risk information
Populate model with technical
and financial information
Link engineering knowledge
with financial decision making
Modernize
Hydro
Plant
Asset Management
Decision Support Tool
Mechanical
Electro
Auxiliary
Electrical
Civil and
other works
Automation,
Protection
& Control
Utility, Approach
and Business
Considerations
Screening and
Prioritization
Life Extension
and
Modernization
Plan
Institutional &
Regulatory
Portfolio
Feasibility
Project Definition
Implementation
VOLUME 1
VOLUMES 2 TO 7
Approach for Multi
Plant Portfolio

12. Innovative Approaches to Modernizing Small Hydro Plants
Life Extension & Modernization Plan
4-2
4-8
4-9
4-10
4-1
4-5
4-6
4-7
Input utility's
business objectives
(from Section 1.0)
4-11
Review Life Extension and
Modernization Plan (periodically)
Collect and analyze data on
performance and condition
Document Life Extension and
Modernization Plan
Inspect equipment and
structures
Identify needs and opportunities
Align needs and opportunities
with plant strategies
Assign costs, benefits and
timing to selected needs and
opportunities
Model financial parameters
Develop plant strategies
"Plant
Survey"
4-3
4-4
Identify risks
Plan Plant Survey

13. Innovative Approaches to Modernizing Small Hydro Plants
Plant Survey Methodology for Assessing Needs & Opportunities

14. INNOVATIVE APPROACHES (CASE HISTORIES)

15. Innovative Approaches

16. Innovative Approaches

17. Case Histories - Aberfeldie
Aberfeldie Penstock

18. Case Histories - Aberfeldie
Aberfeldie Turbine Runner

19. 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.

20. 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.

21. Case Histories - Falls River

22. 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)

23. 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.

24. Case Histories - Shuswap
Shuswap Penstock (summer)

25. Case Histories - Shuswap
Shuswap Penstock (winter)

26. 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

27. 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

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

29. 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%)

30. Case Histories - Woodfibre
Penstock realignment for Mill Expansion

31. 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.

32. Case Histories - Butlers Gorge
Tasmania, Australia

33. 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.

34. Case Histories - Butlers Gorge
Energy dissipater valve in operation

35. MANAGEMENT APPROACHES

36. Facility Asset Planning
1. General Facility and Contact Information
2. Strategic Intent of Facility
maintain status quo
upgrade / modernize
run to failure
3. Spending initiatives (OMA / Capital)
4. Performance Measures
5. Accountability Review
6. Risks
7. Mitigation Strategies
Sources of Information
Condition Surveys
Plant Evaluations
Work Management Systems
Annual Operation, Maintenance & Administration Funding (OMA)
Reliability Centered Maintenance
Environmental
Dam Safety
Project Management Systems
APTUS
1 Annual Budgeting - Annual
Operating & Capital Dollars
2 Long Term Spending
3 Decision Support
4 Proforma Financial Statements
5 Capital Operating Project Analyses
6 Value Based Management Assessments

37. 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.

38. Aptus Financial Model Overview
Base Case Business Model
Supply
Forecast
Financial
Performance
Goals
Risk Mitigation
& Opportunity
Evaluation
Demand
Framework
Scenario Planning Model
© CopperLeaf Consulting Group Inc.

39. Aptus Base Case Forecasting
Customer Classes
Peak/Load Profile
Growth Forecasts
Rate Forecasts
Market Prices
Base Case Pro-forma Statements
Income Statement
Balance Sheet
Cash Flow
Cost of Production Forecasts
Reporting flexibility:
Line of business, organizational unit, generating station, etc.
Spending forecasts by equipment components
Consistent representation of forecasts and analysis
Multi-year oriented
Demand
Forecast
Core
Base Case Business Model
Report Structure
Supply
Forecast
Asset Classes
Generation/Supply Profile
Expansion Forecasts
Variable Cost Forecasts
Other Production Costs
© CopperLeaf Consulting Group Inc.

40. 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
What if?
What is the effect?
Scenario Planning Model
Report Structure
Macro Variable Changes
demand, supply, growth, price, etc.
Micro Variables Changes
spending, discount rates, etc.
Sensitivity Analysis
Risk & Opportunity
© CopperLeaf Consulting Group Inc.

41. Reports Menu
© CopperLeaf Consulting Group Inc.

42. Innovative Approaches to Modernizing Small Hydro Plants
Investment Risk Minimized
Review Economic, Technical, Environmental &Social Viability
Contracting Strategy
Potential Partners
Scope of Work & Perf. Criteria
Update
Business Case
Evaluation
Build
Detailed Design 2
Exit Ramps 1
Concept’l Design, Est.’s, & Deliv’bles
Phase 1
Phase 2

43. 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.

44. 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.

45. 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.