30 May 97
submission of Major Rehabilitation Projects
Hydroelectric Power Benefits
Evaluation Reports for annual program and budget
submissions. They should be consulted for the most
recent policy on types of improvements that can be
pursued under the Major Rehabilitation program
and the basic assumptions for the economic
analysis. The following discusses the benefit
Traditionally, the economic feasibility of a hydro-
electric project is determined by comparing the cost
of the hydroelectric project to the cost of the most
a. The first step in estimating the benefits is to
likely thermal alternative. In other words, is the
determine the gain in power output that will be
cost of constructing and operating a hydroelectric
realized from the proposed rehabilitation plan.
project less than the cost of obtaining the power
Rehabilitation measures can be grouped into five
from the thermal power plant(s) that would be the
categories, based on the way in which they increase
most likely source of that power if the hydroelectric
hydroelectric power project output:
plant were not built?
(1) Those which restore lost efficiency.
D-2. Energy vs. Capacity Benefits
(2) Those which restore lost capacity.
The following two parameters define hydroelectric
(3) Those which restore lost availability.
project output: energy (the total amount of genera-
tion in a given time period, expressed in megawatt-
(4) Those which increase the remaining service
hours (MWh)); and capacity (the maximum amount
of power that can be delivered at any given moment,
expressed in megawatts (MW)).
(5) Those which increase a plant's operating
a. Energy benefits are measured by the cost of
producing an equivalent amount of generation in the
b. Replacing the worn turbine runners is a
power system with the hydroelectric plant replaced
measure that restores lost efficiency. The primary
by the most likely thermal alternative. The energy
benefit of this type of rehabilitation is increased
benefits represent the variable costs associated with
energy production. Incidental increases in
producing the alternative thermal generation, which
efficiency can also be included in the benefits
are primarily fuel costs.
calculations. Increasing efficiency beyond that of
the original equipment can be part of a rehabilita-
b. Capacity benefits are measured as the cost
tion project, but current guidance limits it to inci-
of constructing an equivalent amount of thermal
dental or funded by non-Federal sources. Contact
power plant capacity. The capacity benefits repre-
CECW-B for current policy regarding non-Federal
sent the capital costs and other fixed costs asso-
funding of generation improvements.
ciated with the most likely thermal alternative.
the-art materials often permits the units to operate
D-3. Gain in Output Resulting from
at higher output levels. This would be an example
of a capacity-increasing measure. Current guidance
should be consulted to determine to what extent
The Chapter 3 of the ER 1130-2-500 establishes
increased capacity can be funded under Major
the policy for major rehabilitation at completed
Rehabilitation funding. The incremental costs of
Corps projects. The Chapter 3 of the EP 1130-2-
improving generator capacity beyond the original
500 established guidance for the preparation and