What is the Cost of Setting Up Small Hydropower Projects in States?

  • The components of a small hydropower project that require the most time and construction effort are the dam, water intake, and head race.
  • According to Hydropower Advisor Dr Mahmud Suleiman, some critical components, such as hydrology and other important information, would determine the cost.

The 2023 Electricity Act has enabled states to establish small hydropower plants to increase electricity generation. The components of a hydropower project that require the most time and construction effort are the dam, water intake, head race, surge chamber, penstock, tailrace, and powerhouse.

Hydropower is a renewable energy source based on the natural water cycle. It is the most mature, reliable and cost-effective renewable power generation technology available.

The background

The supply of Nigeria’s hydropower plant is about 80 per cent of the total electricity consumption in the country, with about 6000MW installed capacity from three large hydropower stations, Shiroro, Jebba and Kainji, with five other thermal power stations; its maximum suppressed demand is about 3,500MW.

The demand for electricity is shared between residential, industrial, and commercial/street lighting in the proportions 50:30:20. The private sector contributes 2 to 5 per cent of the national grid’s capacity via independent power plants (IPPs). 

The first large-scale hydropower station in Nigeria was built in Kainji on the river Niger with an installed capacity of 760MW and with expansion to 1,150MW in 1968, then followed by Jebba in 1984 and Shiroro in 1990 with an installed capacity of 570MW and 600MW, respectively.

Hydropower plants use a relatively simple concept to convert the energy potential of the flowing water to turn a turbine, which, in turn, provides the mechanical energy required to drive a generator and produce electricity

Potential Hydro Power Sites in Nigeria are Donko, Jebba, Zungeru II, Zungeru I, Shiroro, Zurubu, Gwaram, Izom, Gudi Kafanchan, Kurra II, Kurra I, Richa II, Richa I, Mistakuku, Kombo, Kiri, Kramti, Beli, Garin Dali, Sarkin, Danko, Gembu, Kasimbila, Katsina, Ala Makurdi, Lokoja, Onitsha, Ifon, Ikom, Afikpo.

Hydropower expert notes

In an exclusive interview with the Electricity Hub, Dr Mahmud Suleiman, an advisor on renewable energy and hydropower generation, stated that there are some very critical components like the hydrology and other important information that would determine the cost of the feasibility study that would be done as well as the possible capacity that could be generated is an important input into the cost of establishing small hydropower plants in Nigeria.

He explained that developing small hydropower projects is much more complex than greenfield solar projects. With solar projects, you can easily estimate costs because you need land. However, for small hydropower projects, you need a lot of information, including a detailed feasibility study, to understand the hydrological characteristics of the dam or river. Only then can you determine the project’s capacity.

Dr. Suleiman pointed out that the initial cost of hydropower is very high due to the necessity of a detailed feasibility study. This cost is significant even for brownfield sites and must be covered before installing the turbines. He noted that while the cost of the electrical components is one aspect, civil work and other necessary activities often cost more and significantly impact the overall cost of establishing a small hydropower plant.

He also mentioned that hydropower turbine manufacturers can provide basic cost estimates, but the actual expenses for civil work and other required activities often exceed the mechanical costs.

Going forward

Dr. Suleiman advised that states prioritize conducting comprehensive feasibility studies for hydropower projects. While preliminary studies might be available from the Ministry of Water Resources or the Ministry of Power, these are often insufficient and must be redone to ensure they are detailed and thorough.

He emphasized the importance of creating a supportive environment for private sector involvement in the hydropower industry. States should guarantee offtake agreements to attract investors who can sponsor initial studies, which are often costly. He noted that without guaranteed offtake, investments in hydropower are not viable. However, projects could generate between 5,000 and 10,000 megawatts if there is significant potential.

Dr Suleiman also highlighted the need for investment and manufacturing clusters to make hydropower investments worthwhile. These clusters would consume a large portion of the generated electricity, making the investment sensible. In areas where demand is low and there is insufficient uptake, especially if the generation is not close to the grid or not large enough to connect at the 132 kV level, the viability of hydropower projects becomes questionable.

He corrected the misconception that there is no water in the northern regions of Nigeria. Most dams in these areas are fed by tributaries and rivers, particularly in North Central Nigeria, which has significant hydropower potential due to the presence of major rivers like the Benue and Niger. Dams such as Kainji and Shiroro are also located in this region, further enhancing its potential for hydropower generation.

Dr. Suleiman explained that costs are relatively consistent whether the project is on a brownfield or greenfield site. The main challenge lies in the civil works, especially in the South, where soil conditions require more extensive concrete work. However, these additional costs are generally negligible compared to the overall project costs. The primary expenses are related to structural and civil works, while the equipment cost remains relatively constant.

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