Economic Admissibility Study on Small Hydro

Abstract

This paper presents a methodology for economic assessment of investment for small hydropower plants in the context of a renewable energy evaluation, i.e., the economic evaluation known as a preliminary investment project. The methodology is a new criterion for setting the nominal flow of turbines by a mathematical programming problem maximizing the objective function given by a net present value, subjected to constraints inferred from the physical characteristics of the river. The main theoretical guidelines for addressing the objective function and data are from papers about cost analysis for small hydropower plants, regarding the installation cost, i.e., the electromechanical equipment and civil work costs. A comparison with three criteria for setting the nominal flow, coming from the professional experience of accumulated knowledge or concepts about the added value obtained, allows the conclusions about the advantages of the proposed criterion.