- Hydropower is the most mature, reliable, cost-effective renewable power generation technology.
- The cost varies within and between countries depending on the resources available, site-specific considerations, and the cost structure of the local economy.
Hydropower is a renewable energy source based on the natural water cycle. Hydropower is the most mature, reliable and cost-effective renewable power generation technology available.
Hydropower schemes often have significant flexibility in their design and can be designed to meet base-load demands with relatively high capacity factors or have higher installed capacities and a lower capacity factor but meet a much larger share of peak demand. Hydropower is the most flexible source of power generation available.
It can respond to demand fluctuations in minutes, delivering base-load power and storing electricity over weeks, months, seasons, or even years when a reservoir is present. One key advantage of hydropower is its unrivalled “load following” capability (i.e. it can meet load fluctuations minute by minute).
Although other plants, notably conventional thermal power plants, can respond to load fluctuations, their response times are not as fast and often are not as flexible over their full output band. In addition to grid flexibility and security services (spinning reserve), hydropower dams with large reservoir storage have been used to store energy over time to meet system peaks or demand decoupled from inflows.
Depending on the reservoir size, storage can last for days, weeks, months, seasons, or even years. Despite promising developments in other energy storage technologies, hydropower is still the only technology offering economically viable large-scale storage. It is also a relatively efficient energy storage option.
The cost of hydropower varies within and between countries depending on the resource available, site-specific considerations, cost structure of the local economy, etc., which explains the wide cost bands for hydropower. The lowest investment costs are typically associated with adding capacity to existing hydropower schemes or capturing energy from existing dams without hydropower facilities.
The development of greenfield sites tends to be more expensive and typically ranges from USD 1 000 to USD 3 500/kW. Nigeria has considerable hydro potential sources, as exemplified by its large rivers, small rivers, streams, and the various river basins being developed.
Nigerian rivers are distributed nationwide and have potential sites for hydropower schemes that serve urban, rural, and isolated communities. An estimation of the rivers Kaduna, Benue, and Cross River (at Shiroro, Makurdi, and Ikom, respectively) indicated that a total capacity of about 4,650MW is available, while the estimate for the river Mambillla plateau is put at 2,33OMW.
Potential of small hydropower operations in Nigeria
Small hydropower potential sites are distributed in 12 States and the river basin (4). However, SHP potential sites exist in virtually all parts of Nigeria.
There are over 278 unexploited sites with a total potential of 734.3 MW (4). So far, private companies and the government have installed about eight (8) small hydropower stations in Nigeria with an aggregate capacity of 37.0 MW.
Around Jos Plateau are a 2MW Station at Kwall Fall on the N’Gell River (river Kaduna) and an 8MW station at Kurra Fall, developed by a private company (NESCO) over 75 years ago. Hydropower is a capital-intensive technology with long development and construction lead times due to the significant feasibility, planning, design, and civil engineering work required.
There are two major cost components for hydropower projects: The civil works for the hydropower plant construction, including any infrastructure development required to access the site and the project development costs.
The project development costs include planning and feasibility assessments, environmental impact analysis, licensing, fish and wildlife/biodiversity mitigation measures, development of recreation amenities, historical and archaeological mitigation and water quality monitoring and mitigation.
The civil works costs can be broadly grouped into categories: dam and reservoir construction; tunnelling and canal construction; powerhouse construction; site access infrastructure; grid connection; engineering, procurement and construction (EPC); and Developer/owner costs (including planning, feasibility, permitting, etc.).
Constructing transmission lines can significantly increase the total cost of developments far from existing transmission networks. Accessing remote sites may also necessitate the construction of roads and other infrastructure.
The electromechanical equipment for the project includes the turbines, generators, transformers, cabling, and control systems required. Moreover, these costs tend to vary significantly less than the civil engineering costs, as the electro-mechanical equipment is a mature, well-defined technology whose costs are not greatly influenced by the site characteristics.
As a result, the variation in the installed costs per kW for a hydropower project is almost exclusively determined by the local site considerations that determine the civil works needs. Finally, deciding which strategy to pursue in any hydropower scheme is highly dependent on the local market, the structure of the power generation pool, grid capacity/constraints, the value of providing grid services, etc.
More than any other renewable energy, the true economics of a given hydropower scheme will be driven by these factors, not just the amount of kWh generated relative to the investment. Hydropower is uniquely placed to capture peak power prices and the value of ancillary grid services, and these revenues can have a large impact on the economics of a hydropower project.