Converting Non-Powered Dams to Produce Electricity Andrew Scott HSA10-7 The Economics of Oil and Energy March 7, 2014

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1 1 Converting Non-Powered Dams to Produce Electricity Andrew Scott HSA10-7 The Economics of Oil and Energy March 7, 2014 I. Overview Hydropower is the oldest form of power generation known to man, employed by the Ancient Greeks, Romans, and Chinese in the form of water wheels that powered mills. Many dams were built in the early 1900s in the US, but hydropower production in recent years has remained level. In this paper we will examine new technologies that hold the potential to increase hydropower production by 15% over the next 30 years. We will also examine the economics of these new technologies, particularly adding turbines to non-powered dams to allow them to produce electricity, to see how their amortized cost per kwh compares to coal and natural gas. II. Background Information Energy generated from hydropower is usually fairly constant. Hydropower has accounted for around 7% of US annual power generation in recent years, but fell to 2.8% in This hydropower accounted for 56% of renewable energy generation in Projections for hydropower generation over the next 30 years predict a slight decrease in production, as no new dams of any significance are in line to be built and several are scheduled to be demolished for environmental reasons. Environmental concerns are the biggest reason that no new dams are being built, as they block fish from swimming upriver to spawn and they flood large areas with their reservoirs. However, hydropower generates no carbon dioxide emissions, which have become a large concern with power generation from coal, natural gas and oil. In addition, advancements in turbine technology have pushed efficiency of generating electricity from falling water all the way up to 90%. 2 Once the dam is built, there are minimal operational costs, so almost all of the costs involved in the overall price of hydroelectric power are from building the dam in the first place. 1 Hydroelectric 2 Hydroelectric Power

2 2 In searching for a way to harness the incredible efficiency and low cost of hydropower without incurring the environmental impacts associated with building a new dam, focus has now shifted to enabling non-powered dams to produce electricity. According to the Army Corps of Engineers National Inventory of Dams, only 2,209 of the 87,359 dams in the United States are used for hydroelectric generation, compared to 27,733 for recreation and 14,883 for flood control, among others. 3 There seemed to be a great potential for energy generation from these dams, so the Department of Energy's Oak Ridge National Laboratory did a study to figure out just how much that potential was. The report, titled An Assessment of Energy Potential at Non- Powered Dams in the United States, came to the conclusion that around 12 GW of potential capacity was available in these non-powered dams. 4 This report, however, only focused on potential energy that could be generated, leaving out economic considerations. The key to making these theoretical numbers a reality is therefore to figure out how much it will cost to retrofit these dams and whether or not those numbers are economically feasible. III. Hydropower Technologies To understand how converting non-powered dams will work, we first need a basic understanding of how hydropower works. Hydropower harnesses potential energy stored in water, usually the gravitational potential energy of water stored in a reservoir behind a dam. When the water flows through the penstock, a channel below the dam, it spins a turbine that generates electricity. The amount of electricity generated depends on both the flow rate of the water and the hydraulic head, which is the difference between the height of the water in the reservoir and the water flowing out on the other Figure 1: Diagram of hydroelectric dam gy/hydropower-plant1.htm side of the dam. The common drawback with a majority of the non-powered dams is that they have a low hydraulic head and a small capacity over half are less than 25 feet tall and most 3 Army Corps of Engineers National Inventory of Dams 4 Assessment of Energy Potential (pdf)

3 3 have a capacity under 100 MW. 5 This is small compared to large dams built solely for the purpose of hydroelectric generation. For example, the Grand Coulee Dam in Washington is 550 feet tall and has a capacity of 6,809 MW. 6 Still, by converting a bunch of dams with small capacity, a considerable amount of energy can be generated. There are several types of turbines to be considered for use. The Pelton turbine is a wheel with bucket shaped appendages along the outside of the wheel. Water is sent through a nozzle tangential to the bottom of the wheel, striking the buckets and spinning the wheel. This generates energy from the velocity of the moving water. 7 Another turbine, the Francis turbine, derives energy from the pressure of water. Water flows in and is directed to the runner blades (which Figure 3: Diagram of the hydroengine Figure 2: Diagram of a Pelton turbine connect to the main shaft that spins to generate electricity) by moveable gates that can adjust to different water pressures. The pressure of the water drops as it passes through the runner blades and into the draft tube where it flows out of the turbine. This process is extremely efficient, able to generate about 90% of the maximum energy that could be generated from the water. 8 Another newer design, which is not exactly a turbine, is the hydroengine, produced by Natel Energy. This design has two sets of guidevanes, represented in the diagram to the left by the smaller curves. These direct water into contact with the first and second stage blades, where the first stage is on the left side and the second stage is on the right. The force of the water hitting these blades turns a belt, which runs a generator to produce electricity. This process is actually highly efficient, as the guidevanes can adjust to 5 Power of the Dammed

4 4 different flow rates to maintain efficiency. The hydroengine is the turbine that I will use to examine economic feasibility of converting a non-powered dam, but it is important to understand that there is a wide range of turbines that can be used depending on the specific dam. These differing turbines can affect the costs associated with this type of hydroelectric project, so it is important to realize that my calculations are a very rough estimate. IV. Economic Feasibility of Converting Non-powered Dams The single greatest economic advantage of converting a non-powered dam rather than building a new dam is that you don t have to build a new dam. The Department of Energy estimates the cost of building a new dam to be about $2,000 per KW of capacity, so if you start with the dam already in place a huge amount of money can be saved. 9 To get an estimate for the cost of converting a non-powered dam, I will use the Lake Striker Dam in Texas. According to the Department of Energy s study cited earlier, this dam has a hydroelectric capacity of 1.0 MW. The dam itself reaches a height of 42 feet above the natural streambed and has a service spillway that has four 10-foot wide gates that are each 35 feet wide. 10 The hydroengine can be placed in the spillway, where these gates currently are. If we place a single hydroengine in one of these spillways, we can expect to generate about ¼ of our hydroelectric capacity, or 250 kw. In this case, Natel Energy recommends their SLH100 model, which has the ability to generate this much electricity. 11 Unfortunately, Natel Energy does not have any estimates of their costs for the hydroengine at this time. However, they do state that it is 30% to 50% cheaper than a Kaplan turbine, which we can find the cost of. Lancaster University did a study taking prices of different sized turbines from manufacturers and determined that the cost of a Kaplan turbine is approximately C K = 3500 (kw) 0.68 with the answer in. 12 We then plug in 250 kw and we get C! = !.!" which comes out to just under 150,000 as the price. Since 1 = $1.67, we get a final cost in dollars of just under $250,000 for a Kaplan turbine. For the sake of making a conservative 9 Hydro Research foundation 10 Texas Water Development

5 5 estimate, we will take the lower estimate provided by Natel Energy that their hydroengine is 30% cheaper than a Kaplan turbine. This means that the hydroengine for the Lake Striker Dam will cost about $175,000. This cost does not include screens needed to keep debris out of the hydroengine or electrical lines to transport electricity generated, but the real cost that it does not include is the price of constructing the dam needed to store the water for the hydroengine. 13 However, since the Lake Striker Dam has been operational for nearly 57 years, that is not a problem. In fact, using our $2,000 per kw capacity formula from the Department of Energy, we are saving $500,000 if the only capacity considered is the capacity we are generating electricity from. Since the dam actually has a capacity of 1.0 MW, we could be saving up to $2 million just from the fact that we do not have to build this dam. Starting with our initial cost of $175,000, we now need to figure out the cost of the electricity we are producing. Since there no real cost of hydroelectricity other than maintenance on the system, we need to focus on an amortized cost. Natel Energy projects that their system will last 20 to 25 years, so we will take the low estimate of 20 years for the conservative estimate. The powertrain also needs maintenance every 3 to 5 years, which in the worst case should cost about $20, If we have to do maintenance 7 times over the course of the 20-year lifetime of the hydroengine, this will cost us $140,000. This brings our total cost of the hydroengine over the 20 years to $315,000. Since our hydroengine produces around 250 kw for 20 years, we can get a rough estimate of the total kwh produced over these 20 years. 20 years 365 days year 24 hours day 250kW = 43,800,000 kwh To find our amortized cost of electricity, we just divide total cost over kwh $315,000 = $. 007/ kwh 43,800,000 kwh This is extremely cheap, but is consistent with estimates of average cost of hydropower in the US. 15 If we added in the conservative estimated cost of building the dam, we would get $"#$,!!!!",!"",!!!!"! = $. 019/ kwh

6 6 So we are saving about $.012 / kwh since we do not have to build the dam. Comparatively, the cost per kwh of coal is and the cost of natural gas is short tons kwh $68.65 short ton = $0.037/kWh $4.667 mmbtu 1 mmbtu Mcf = $0.037/kWh 1 Mcf kwh so it is clear that hydropower is cheaper In addition, it comes without the greenhouse gasses produced by coal and natural gas, so it is really a win-win situation for energy production. V. Conclusion Hydroelectricity is the cheapest form of energy generation that exists because there is no fuel that needs to be put into it to make it run, as with coal or natural gas. Almost all of the costs associated with hydropower come from building the dam itself, along with installing turbines to do the actual electrical generation. Building dams is always subject to controversy, however, due to environmental impacts that dams have on the surrounding ecosystem. In the US, only about 2.5% of dams actually generate electricity, so if we could add turbines to these dams to produce electricity, we could avoid the problems associated with building entire new dams. There is a potential for over 12 GW of capacity in dams that already exist throughout the US, and companies such as Natel Energy are already converting some of them. Government subsidies and research grants are also becoming a big deal as the government tries to push for clean energy. Since hydropower is so cheap, particularly with converting non-powered dams, the question then becomes why do we not see more hydropower projects all over the country. The simple reason is paperwork. Adding a turbine of some sort requires the builder to go through the same licensing process as it would take to build a whole new dam, including studies of the impact on the environment. However, the government is working to make licensing a simpler process, especially when a new dam is not being built. In Colorado, for example, a small hydro project got approved in less than two months, which is unheard of in the hydropower industry. 18 The 16 EIA home page

7 7 future of hydropower in the United States rests in small hydro, where the theory is that a bunch of small plants together can produce a large amount of electricity. This electricity is not enough to take us away from coal and natural gas, but it is a step in the right direction. [2130]