4.3 Operation and Maintenance Costs

Once commissioned, hydropower plants usually require little maintenance, and operation costs will be low. When a series of plants are installed along a river, centralised control and can reduce O&M costs to very low levels.

Annual O&M costs are often quoted as a percentage of the investment cost per kW per year. Typical values range from 1% to 4%. The IEA assumes 2.2% for large hydropower and 2.2% to 3% for smaller projects, with a global average of around 2.5% (IEA, 2010c). Other studies (EREC/Greenpeace, 2010 and Krewitt, 2009) indicate that fixed O&M costs represent 4% of the total capital cost. This figure may be appropriate for small-scale hydropower, but large hydropower plants will have values significantly lower than this. An average value for O&M costs of 2% to 2.5% is considered the norm for large-scale projects (IPCC, 2011 and Branche, 2012). This will usually include the refurbishment of mechanical and electrical equipment like turbine overhaul, generator rewinding and reinvestments in communication and control systems.

However, it does not cover the replacement of major electro-mechanical equipment or refurbishment of penstocks, tailraces, etc. The advantage of hydropower is that these kinds of replacements are infrequent and design lives of 30 years or more for the electromechanical equipment and 50 years or more for the refurbishment of penstocks and tail races are normal.

FIGURE 4.8: OPERATIONS AND MAINTENANCE COSTS FOR SMALL HYDRO IN DEVELOPING COUNTRIES

Source: IRENA/GIZ.

A recent study indicated that O&M costs averaged USD 45/kW/year for large-scale hydropower projects and around USD 52/kW/year for small-scale hydropower plants (Ecofys et al., 2011). These figures are not inconsistent with the earlier analyses.

These values are consistent with data collected by IRENA and GIZ for small hydropower projects in developing countries (Figure 4.8). Average O&M costs for mini-and pico-hydro projects can be significantly above the average, given the economies of scale available for O&M costs at hydropower projects.