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Presentation on theme: "INNOVATIVE SMALL HYDRO TECHNOLOGIES"— Presentation transcript:

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


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


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


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


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.


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