Small Hydropower Overview

Humans have been harnessing water to perform work for thousands of years. The Greeks used water wheels for grinding wheat into flour more than 2,000 years ago. Modern hydropower technology expanded rapidly from 1870. Hydropower was one of the first forms of renewable energy to be developed, together with wind. But contrary to wind power, water streams in rivers are part of the hydrological cycle, which gives this kind of resource a very predictable character on an annual basis. Hydropower systems use the energy in flowing water to produce electricity or mechanical energy. The water flows via channel or penstock to a turbine where it causes the shaft of the turbine to rotate. When generating electricity, the rotating shaft, which is connected to an alternator or generator, converts the motion of the shaft into electrical energy.

Hydro (large and small) supplies the vast majority of renewable electricity, generating 16.6% of world supply and 92% of total renewable energy electricity[1]. Most of the potential for development is in Africa, Asia and Latin America with Asia having the greatest economically feasible potential at 3600 TWh/year. South America has an economically feasible potential of 1600 TWh/year and Africa's potential is 1000 TWh/year.

Small hydro is generally overshadowed and confused with large hydro. It has attracted relatively little attention from entrepreneurs, equity investors and project financiers in recent years[2]. However given the current global context, the cost competitiveness of the technology and the size of the remaining resource, investment analysts believe that small hydro has the potential to enjoy rapid expansion, particularly in emerging economies.

There is no international consensus on the definition of small hydropower (SHP). In the US, it can refer to capacities of up to 30 MW, in India up to 15 MW and in Sweden small means up to 1.5 MW. Small hydro can be further subdivided into mini hydro (usually defined as <1MW) and micro hydro (<100kW). Hydroventura target development range, considers small hydropower as any plant of between 1 and 20MW capacity. This coincides with the Chilean government definition of hydro plants of less than 20MW capacity as sources of “non-conventional renewable energy”, with an associated privileged position within electricity market legislation.

Hydroventura’s focus is on “Run-of-river” (ROR) projects which refers to a mode of operation in which the hydro plant uses only the water that is available in the natural flow of the river so that power fluctuates with the stream flow. “Run-of-river” implies that there is no water storage and therefore no large dams or flooded areas associated with the project. ROR hydro plants are arguably the most environmentally benign of all forms of power generation.

[1] International Energy Outlook, Electricity Chapter, IEA, 2007
[2] New Energy Finance, Research Note, Mini-Hydro, 7 January 2008

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