Levelized Cost of Electricity Generation by Small Hydropower Projects under Clean Development Mechanism in India

Teegala Srinivasa Kishore,Epari Ritesh Patro,Ali Torabi Haghighi

doi:10.3390/en15041473

Abstract

Contrary to conventional fossil fuel-based electricity generation technologies, renewable energy centered technologies, specifically small hydropower, release a lesser amount of anthropogenic greenhouse gases but are normally more expensive. A major segment of the capital investment in the current small hydropower scenario accounts for equipment and construction process costs. The construction and cost administration process are generally limited to analysis of the capital cost of civil constructions, electro-mechanical equipment works, neglecting the costs related to operating and maintaining the plant, replacement or refurbishment, certified emission reductions, among others. Contemporary studies indicate that these costs form a substantial fraction of the total capital investment. Consequently, for cost management and investment decision making, small hydropower plant developers are drawing increased attention in recent years towards conducting life cycle costing studies that take into account the ignored costs. In addition, small hydropower plants in developing nations can become more competitive by trading the emission reductions achieved under the provision of the Clean Development Mechanism, an outcome of the Kyoto Protocol proposed at the United Nations Framework Convention on Climate Change. In this paper, a modest attempt has been made to determine the Levelized cost of electricity generation using life cycle costing methodology, which accounts for all the costs over operating lifetime on a range of small hydropower plants and the results are analyzed.

Highlights

Renewable energy-based electricity generation emits less anthropogenic greenhouse gases (GHG) than conventional fossil fuel-centered electricity generation technologies but is usually expensive
The reliability assessment in generation systems is very important [34,35], and since this study considers the overall life cycle cost of Small Hydropower (SHP), the reliability aspects are considered in the form of the annual plant load factor, rehabilitation times and replacement costs
From the calculations obtained in the previous section, it can be analysed that the Levelized cost of electricity (LCOE) reduces with an increase in capacity of the plant resulting in more significant savings which makes the projects profitable

Summary

Introduction

Renewable energy-based electricity generation emits less anthropogenic greenhouse gases (GHG) than conventional fossil fuel-centered electricity generation technologies but is usually expensive. The Clean Development Mechanism (CDM) of the Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC) offers a prospect for renewable energy-based electricity generation systems in emerging nations to become more competitive by leveraging monetary benefits extended by the reduction in emissions possible from a renewable energy project. The project titleholder can trade the CERs to developed countries, companies, or governments. The latter can use them to support their emission reduction goals committed under the Kyoto Protocol [2]. The net revenue from CER trades makes projects based on renewable energy sources more competitive until the average cost of issuing a CER (i.e., UNFCCC charges to monitor and verify emission reductions) is less than the CER tradable price

Methods

Results

Conclusion