A tough time for small hydro

11 December 1998



Janet Wood reports from IWP&DC’s Small Hydro ‘98 conference


Small hydro is under pressure, Henri Baguenier said when he opened discussions at Small Hydro ‘98 (held in Athens, on 16-18 Novem-ber). Baguenier, president of the European Small Hydro Association, noted that in Western Europe the electricity supply industry was mainly a grid market, and conditions were unfavourable to develop-ing small hydro. The electricity price was set by the market, and this was dominated by fossil fuels which were becoming markedly cheaper and more efficient. Small hydro could not compete on a price basis with these other forms of generation.

Meanwhile, Baguenier said, there was less overt support within the European Union for small hydro. Other forms of renewable energy were given more resources and small hydro was in danger of being passed over in the Union’s programmes. One important role of esha was to lobby for the small hydro community and ensure that this long-established and reliable source of renewable energy was not discounted.

Some other speakers also had warnings for the small hydro community. Hans Peter Hack, for example, noted that in his home country of Germany new regu-lations were about to be introduced on residual flow that were likely to affect the economics of small plants, and similar regulations were likely to be considered Europe-wide.

But despite these warnings, the mood of the delegates who met in Athens was positive. There were many small hydro plans to be discussed: in the host country, Greece, for example, Kostas Vasilikos from the Centre for Renewable Energies explained that an extensive programme was under way. Twenty projects together providing some 17.3MW were already completed, he said, and a further 110 — adding another 197.2MW — were at issue. It was evident that in Greece, at least, a traditional grid company was showing an interest in new forms of generation: the Public Power Corporation (PPC) had set up its own holding company to pursue renewable energies, according to PPC’s representative John Stefanakos, and the company would also be pursuing small hydro.

A similar story was heard from other parts of the world. From Pakistan, Riaz Ahmad Khan of the Ministry of Water Power explained how small hydro power was being developed in the mountainous areas of the North West Frontier Province. Dikendra Raj Kandel of the Lamjung Electricity Development Co explained how his company was setting up projects intended to ensure that local people co-operated and had full involvement with the plant. In Lithuania, delegates heard from Miha Pisljar that while the number of small hydro plants had been decreasing until the mid 1990s, feasibility studies were now under way for up to 40 new plants.

If small hydro had some challenges in the short term, Baguenier said, in the long term its advantages were overwhelming. He said small hydro was ‘still the first renewable energy used to generate electricity’ and in evidence he cited the more than 10GW of capacity in operation in Europe, providing some 35TWh/y. In comparison, he noted, wind power capacity worldwide amounted to no more than 6GW, and he pointed out that 1kW of wind capacity provided considerably less energy than 1kW of hydro capacity. Small hydro’s long history may make it appear to be an industry from the past, he said, but that could not be so, because it was vital in meeting the world’s needs for renewable energy. In example, he noted that the European Union intended to double its renewable energy capacity by 2010: this would be impossible without a concomitant growth in small hydro.

But small hydro was similar to other renewables in one respect, Baguenier noted. In a privatised market it would need support, to ensure that investors would have a suitable rate of return. Market economics alone would not meet the objective of increasing the proportion of renewables in the energy mix.

Refurbishment opportunities

Speaking about the history of hydro power in Greece, PPC’s Stephanakos noted that Greece had in fact had more small hydro projects in the past than are currently in operation. However, in the years after World War II these small projects had been bought by PPC and closed down in favour of large-scale central generation. Delegates from other countries told the same story: in Russia, for example, there were said to be more than 3000 small hydro projects that had been shut down in the past 40 years, representing an unknown capacity reserve. Several delegates had experience to relate about projects that were enabling long-disused plants to be brought back into operation, notably in Germany and Lithuania.

Delegates were optimistic about the opportunity represented by this huge reservoir of small hydro plants. Conference chairman George Babalis, previously secretary general of ESHA and now with PPC, explained why such apparently obsolete plant represented opportunities. ‘The nightmare of small hydro investors is administration’, he said, ‘and the situation was getting worse and worse’. In France, for example, gaining authorisation for a small hydro project takes an average of six years. Refurbishment is not always free of this burden, he said, but in many cases the load is substantially lighter.

The future

After three days of discussion, delegates left Small Hydro ‘98 knowing that there was much work to be done to ensure that small hydro achieved its potential. But they left with positive news.

Although the EU had to be reminded of the value of this renewable resource, there was widespread support for reviving the many hydro plants now lying idle. Innovative new financing solutions were being examined, such as plans to operate 13 plants as a singe BOT project in Armenia, and the cost of developing new hydro schemes was being reduced by software tools such as the British Institute of Hydrology’s hydro ‘Atlas’.

Small hydro does need support, George Babalis said in his closing remarks to the meeting. And if countries are serious about their plans to introduce renewable energy they will have no choice but to give it the support it needs.

Small Hydro 2000

Delegates to Small Hydro ‘98 were still deep in discussion as the conference closed. The conference convenes again — for the eighth time — in October 2000. More than four years after the decisions were taken at Rio and Kyoto to increase the proportion of renewables used in energy production, we will have the chance to measure progress toward those goals and consider the best ways to ensure that small hydro can play its part. In many countries the pace of privatisation of the electricity supply industry will be increasing, and we will be able to pass on the experience from those operating small hydro plants in an open grid system. There will be new developments in technology, new ideas in financing, and new experiences from those building and reviving small hydro plants. To register your interest and receive a Call for Papers, contact Jill Greenhalgh on tel +44 1322 277788, fax +44 1322 276474, e-mail: [email protected]




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