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

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 Benefits Overall 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