Author: C Zhang, E Lillie
Conference: SANCOLD 2019 Annual Conference
Date: November 6-8, 2019

ABSTRACT
To select the optimum dam height and plant capacity, a high-level design should be prepared for a range of the dam heights and plant sizes at a potential site. The capital and operating costs should be determined for the proposed scheme for the expected life of the project. Then the long-term energy production should be calculated using a hydrological model. The marginal cost and the marginal revenue should be calculated for the range of scheme sizes. The optimum scheme size is when the marginal cost exceeds the marginal revenue. A sensitivity analyses should be done on all the main input parameters. This paper deals with selecting the optimum scheme capacity for a site using the established economic optimisation method of total revenue – total cost approach and marginal analysis, which mitigates the bias in selecting the scheme capacity.

BACKGROUND
Hydropower electricity generation in the world has reached a new high of approximately 4200 terawatt hours (TWh) in 2018, of this 4200TWh, only 138 TWh, 3.3 %, is contributed from Africa. New hydropower capacity of 21.8 Gigawatts (GW) was put into operation in 2018, in which Africa contributed 1 GW from 7 different countries. (IHA, 2019). This bringing Africa’s total installed capacity to 36.3GW, 2.8 % of the world’s total installed capacity. Figure 1 shows the 2918 distribution of hydropower development across the different regions of the world.

With 640 million Africans having no access to electricity according to the African Development Bank Group (ADBG)(African Development Bank Group, 2019) there is a great need for energy generation in Africa. Many sources state that Africa has the largest percentage of untapped hydropower potential with only 11 % utilised. Figure 2 shows the distribution of hydropower development across the Africa.

It should be noted that a large proportion of the installed hydropower capacity in South Africa is pumped storage to balance the daily power fluctuation in the South Africa grid.

With Africa having the largest percent of untapped hydropower potential, hydropower projects are an important driver for new dam construction projects in Africa. With there being a shortage of public finance for power development in Africa there is a huge emphasis on needing to attract private sector financing, this comes with a certain difficulty in which one must mitigate the risks that are perceived by the investors. It is important for developers to optimise their investments and the African challenges that one must contend with deter private capital (Kalitsi EAK, 2003). Thus, it is important to optimize the capacity of new hydropower schemes when such opportunity comes.

In selecting the optimum capacity for a new hydropower plant, it is important to consider a range of dam heights and plant sizes for a site. The annual average energy production for a site is dependent on both factors as well as other factors such as the water resource available and electricity tariff structures. This paper will outline the method used to select the optimal hydropower scheme capacity for a potential site. A theoretical case study is presented to demonstrate this method.

Download the full technical paper.

Download