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Overview of Hydropower-related Services Services related to hydropower projects (tables 5.1 and 5.2) are supplied throughout the lifecycle of a project.4 Services provided prior to project development broadly include resource assessment, site studies, and technical and economic feasibility studies. Services related to project development and construction include project design, construction, construction management, and quality control consulting services. For large projects that are expected to significantly impact the local population, social services such as public outreach, working with local communities and interest groups, and community relocation services can be significant.5 Once construction has been completed and a project is operational, it requires services related to operations and maintenance (O&M). As noted by one company, post-development services run the gamut “from inspection to commissioning, from repairs to upgrades.”6 The development cost of a particular hydropower project is generally split between civil engineering/construction costs, potentially including infrastructure needed to access the site, and the cost of electro-mechanical equipment. Equipment costs tend to be fairly predictable, while civil engineering costs vary significantly based on the specific site, design choices, and local costs for labor and materials. The costs of small hydropower projects tend to be higher per kilowatt-hour (kWh) on average than those for large hydropower projects. Plants with capacity below 1 MW tend to have significantly higher capital costs per kWh because civil works costs are significantly lower, so the cost of equipment accounts for a greater share of the overall project cost. Many hydropower projects refurbish an existing plant, rather than develop a new site. These “life extensions” may upgrade original equipment to increase the capacity at an existing site, or they may add electricity generation capacity to existing dams that were originally built for non-electricity purposes, such as flood control. Rehabilitating or expanding an existing plant generally has the lowest costs per kWh, because much of the initial civil works development has been completed.7 The cost of adding capacity to an existing hydropower site is estimated to be in the range of $400–$800/kWh.8 Most original equipment manufacturers (OEMs) in the hydropower field customize hydroelectric turbines for each site, and they have traditionally provided O&M services as part of the warranty on their equipment, or under contract after the warranty expires.9 However, more companies now provide services on equipment provided by other firms, 4 Although the production of electricity using hydropower is a clearly defined industry, there is no widely accepted list of services related to hydroelectricity generation. In an effort to provide such a list, the tables list the services offered by individual companies, as described in submissions to the Commission, company websites, and marketing brochures. 5 According to one U.S. industry representative on China’s Three Gorges Dam project, the budget for such social services was larger than the construction budget. Industry representative, telephone interview with USITC staff, March 14, 2013. 6 GE Energy, “GE Energy Industrial Solutions: GE Serves Hydro,” 2011, 4. 7 Upgrades often involve adding larger turbines to an existing site, and may or may not involve expanding the dam that is part of a hydropower site. Since hydropower sites may be decades old, such upgrades are not uncommon and are seen as an efficient way to maximize the capacity of an existing site. In the United States, upgrades need to be relicensed by the U.S. Federal Energy Regulatory Commission (FERC)—a process that may or may not take less time than the original licensing of an entirely new project. IRENA, “Renewable Energy Technologies,” June 2012, 21; industry representative, telephone interview with USITC staff, March 4, 2013. 8 Industry representative, telephone interview with USITC staff, March 14, 2013. 9 Ibid. 5-2PDF Image | Renewable Energy and Related Services: Recent Developments
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