Micro-hydropower system investment budget

How much does a micro-hydro system cost to invest?

There is no standard answer to this question, that is because the cost depends on the local technology, the economy and the amount of power you expect to receive. In general, with current technical capabilities, it costs $1500-$2500 per 1KW of electricity, so the total investment depends on the capacity of the system and local conditions. Systems with power output less than 5KW, which are too small and require some add-ons (e.g., savings pools and inverters), can cost $2500 or more per KW.

In general construction conditions in rural China, if you contract out the civil work to a local contractor, the investment to build a standard micro-hydro system will cost about 10,000-15,000 RMB per 1KW. If you can do the construction yourself, the cost will be lower. Note that the cost per KW for low head systems is increased compared to high head systems, and low head systems have more civil construction work.

The cost of micro-hydro power falls into two main categories: original capital and annual investment. The original capital is spent before the project is commissioned and includes conducting feasibility studies, civil construction, purchasing and installing equipment, and obtaining related permits. Annual investment is the capital invested for operation and maintenance. Typically, micro-hydro systems have a high original investment and a lower annual investment than conventional fossil-fueled power plants. In fact, the maintenance cost of micro-hydro systems is the lowest compared to other power generation processes. The total cost of micro-hydro construction can be reduced even more if it utilizes existing facilities (e.g., dikes, canals, transmission lines, etc.).

Each micro-hydro system is unique and the cost of construction is different. Approximately 60% of the construction cost is determined by local power supply requirements, techno-economic conditions and site selection, while 40% of the cost is relatively fixed, mainly for the investment in generating equipment.

In China, the depreciation period for mechanical and electrical equipment is generally 15-20 years, while the depreciation period for civil works, hydraulic facilities and pipelines is generally more than 30 years. The major repair fund and daily maintenance costs are withdrawn each year on a pro-rata basis based on the original capital. Generally, the major repair fund is withdrawn at 8% and the maintenance costs are withdrawn at 6%. Micro-hydro should be designed to be unattended, eliminating the expense of specialized personnel.