Cost risk of construction of small hydroelectric power plants

Jarosław Górecki,Ewa Płoszaj,K Wilde,M Niedostatkiewicz

doi:10.1051/matecconf/201926207004

Abstract

The growing demand for electricity forces the humanity to find the most economical methods of its production. Functioning without electricity in today's world deprives human from the possibility of a free existence, and even completely prevents it because of the technicisation of society. Growing awareness of acquiring "clean" environmentally-friendly energy from renewable sources contributes to the successive development of this sector of the economy. The purpose of the article was to analyse the risk of construction costs for small hydroelectric power plants along with an indication of the location and needs of a small hydroelectric power plant in Poland. The subject of the study was a small hydroelectric power plant producing electricity, using a turbine to convert the kinetic energy of water into mechanical energy. Aiming at illustrating the benefits of the discussed investment based on the estimation of construction costs and, as a result, financial results, a specific case of a small hydroelectric power plant located in the region of Kujawsko-Pomorskie [Kuyavian-Pomeranian Viovodeship] in central Poland was analysed. The intended research objective was achieved using industry literature, magazines as well as technical knowledge of persons holding building qualifications (including hydro-technical construction) and materials made available by two Bydgoszcz companies specializing in the implementation of small hydroelectric power plants. TheCOMAR- Jarek Górecki®algorithm, which operates in the industry as the author's concept of calculating the variation of financial outlays incurred for the implementation of investment and construction projects, was used to analyse the risk of costs of a construction project.

Highlights

Small hydroelectric power plants as energy plants are considered an alternative to fossil fuels, as well as to controversial nuclear power plants
The aim of the research is to estimate the level of risk related to the costs of construction of small hydroelectric power plants calculated in a traditional, bottom-up, way, and to show that besides financial profits for the investor they bring a number of other benefits, such as the production of "clean" electricity
Positive aspects related to a small hydroelectric power plant, in particular, are revealed at the stage of its operation, in the form of financial profits for the investor and environmental protection through the production of "clean" energy, that is using a renewable source, while not emitting harmful substances into the atmosphere

Summary

Introduction

Small hydroelectric power plants as energy plants are considered an alternative to fossil fuels, as well as to controversial nuclear power plants. Poland as a lowland country, poor in water marginalizes the need to build small hydroelectric power plants without being aware of the consequences of such proceedings. The need to educate and raise public awareness about the benefits of energy production using small hydroelectric power plants. Nowadays, supplying electricity to homes is a prerequisite for free functioning. It causes the necessity of determining the place and the needs of its production by alternative energy sources, for example a small hydroelectric power plant. There are possible deviations between cost estimations and actual cost of existing plants commissioned [2]. Parametric estimations turn out to be more accurate [3]

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Conclusion