A Case Study for Upper Kotmale Hydropower Plant

ENGINEER - Vol. L, No. 04, pp. [75-84], 2018 ©ENGINEE The InstitutionR - Vol. of LI,Engineers, No. 04, Sripp. Lanka [page range], 2018 © The Institution of Engineers, Sri Lanka DOI: http://doi.org/10.4038/engineer.v51i4.7315 The Economic Comparison of Reservoir Type and Run Estimated support categories based on the tunneling quality index Q (After Grimstad and Barton, 1993) of the River Type Hydropower Plants: A Case Study for Upper Kotmale Hydropower Plant

H.A.H. Amanda, W.A.D.S. Wijayapala, J.R. Lucas and W.J.L.S. Fernando

Abstract: Due to the severity of impacts predicted due to climate change issues, Greenhouse Gas (GHG) emissions need to be considered as a factor even for hydropower because of the identified emission possibilities associated with large reservoirs. Thus, when planning a large hydropower project at a selected location, it is important to decide on the type of power plant based on an economic comparison including environmental considerations. The existing 150MW, Talawakele run of the river type hydropower plant and the previously planned reservoir type Caledonia hydropower plant were selected for comparison in this study. Net greenhouse gas emissions from both projects were estimated based on several estimating techniques and for the economic comparison, the levelized cost of electricity of both projects were calculated. Results show that the unit cost of electricity generation from run of the river type is substantially lower (around LKR 4 per kWh) than that of reservoir type. On the other hand, as Upper Kotmale is a peak-serving plant, a separate comparison was done considering the night peak operation. Results show a loss to the country (around LKR 2 billion per year) by energy reduction due to not implementing the reservoir type Caledonia hydropower plant. It is concluded that for future large hydropower developments in the world, a similar study should be carried out before deciding to downsize the reservoir. The study has further concluded that GHG emission considerations are not strong enough to discourage reservoir type new hydropower plant developments.

Keywords: Reservoir, run of river, hydropower, GHG emissions, levelized cost

1. Introduction When planning a large hydropower project at a The objectives of this research are to estimate selected location, it is important to decide the quantifiable advantages and disadvantages whether to construct a reservoir type or Run of of reservoir type and ROR type hydropower the River (ROR) type based on an economic generation, and to assess the economic impacts comparison including environmental and other of converting reservoir type hydropower considerations. There are environmental, social projects to ROR type hydropower projects at and economic impacts of hydropower projects the design stage. In addition to costs related to which cannot be neglected, especially for large power plants, costs related to environmental, hydropower plants. social and economic impacts of hydropower are considered for project comparison. Owing to the severity of impacts predicted to be caused by climate change, GHG emissions Almost all the major hydropower potential has need to be considered even for hydropower been developed in Sri Lanka by now. Out of the because of CO2 and CH4 emissions associated two existing large ROR type hydropower with large reservoirs. Disturbance to the plants, Upper Kotmale Hydropower Project ecosystem or loss of ecosystem is a negative (UKHP) was taken as the case study for this impact to the environment including Eng. H.A.H. Amanda, BSc Eng (Hons) (Moratuwa), MSc deforestation, impacts on fish owing to flow (Moratuwa), AMIE(SL), AM(SLEMA), Electrical Engineer, reduction and aesthetic effects on waterfalls. Lanka Energy Conservation (Pvt) Ltd. Reduced flow across waterfalls may cause Eng. W.D.A.S. Wijayapala, BSc Eng (Hons) (Moratuwa), MEng(Moratuwa), Int.PEng(SL), CEng, FIE(SL), Senior reductions in tourism. Resettlement is a critical Lecturer, Department of Electrical Engineering, University social impact caused by large hydropower of Moratuwa. projects. The economic advantage of reservoir Eng. (Prof.) J.R. Lucas, BSc Eng (Hons) (Cey), MSc type is the ability to store water and hence to be (Manch), PhD (Manch), FIEE, CEng, FIE(SL), MCS(SL), Emeritus Professor, Department of Electrical Engineering, dispatched during both wet and dry seasons. University of Moratuwa. Dry seasons affect the river flow of ROR type Eng. W.J.L.S. Fernando, BSc Eng (Hons) (Moratuwa), and hence the electricity generation. MEng (Bangkok), CEng, FIESL, MIET (UK), Chairman- National Engineering Research and Development Centre.

ENGINEER 74 71 ENGINEERENGINEER research. However, as there are other countries environmental considerations into project with untapped potential of hydropower, this assessment but GHG emissions from reservoir research outcomes will especially be important has not been considered in that. to them. Findings in the last two decades indicate that 2. Literature Review hydropower reservoirs produce GHGs as CO2 Worldwide research publications on and CH4, raising the question whether hydro comparison between reservoir type and ROR power based generation is a clean and green type hydropower plants were studied to electricity source [7],[8]. Most of the past world identify the research gap. studies [9],[10],[11],[12],[13] focused on GHG emissions from hydropower reservoirs due to A study [1] has been conducted focusing on the flooded organic matter decaying under water Amazonian regions of Bolivia, Brazil, and the quantifications were based on long Colombia, Ecuador and Peru, where a large term field measurements. The results were untapped hydropower potential is available, summarized for tropical and non-tropical qualitatively comparing the reservoir type and regions separately. ROR type based on the climate change impacts. The study concludes that it will be necessary to Latest research findings on methods of GHG invest in reservoirs to increase the margin of emissions from hydropower and quantification reserve and cope with climate change. The of them were studied because it is an emerging study also indicates the local, social and study area at present. The study done by A.B. environmental impacts associated with the Hidrovo et al., “Accounting for GHG net exploitation of hydropower. Another study [2] reservoir emissions of hydropower in has also been conducted based on the climate Ecuador”[8], presents a rough and holistic change impacts of hydropower, focusing on estimate of net annual GHG emissions from Central and South American regions where reservoirs in the absence of long term field 60% of the electricity demand is met through measurements. It is difficult to estimate the hydropower. Building new storage reservoirs is costs related to all ecological impacts of given in it as a potential adaptation measure. hydropower projects and their research covered only deforestation. A review [3] done for Yunnan in China, qualitatively compares small and large 3. Case Study hydropower projects for their environmental There are many reservoir type large implications and socio-economic consequences. hydropower projects in Sri Lanka [14] but only A comparison [4] between large and small two large ROR type projects, namely Upper hydropower projects in Tibet, based on the CO2 Kotmale Hydropower Project (UKHP) equivalent states that small hydro performs (150MW) and Kukule Ganga Hydropower better in terms of environmentally friendly Project (70MW) are in operation at present. development and low carbon energy than large These two were constructed during the recent hydro. In Tibet, large hydropower plants are past, compared to the time period in which the essential to meet the large and growing other reservoir type projects were implemented electricity demand. in Sri Lanka. Out of the above two, UKHP was selected for the case study in this research. A study [5] from Western Himalayan region of India on environmental sustainability of ROR For UKHP, an earlier planned (1985-1987) hydropower projects has been conducted. It Caledonia reservoir type project and the presents a public perception cum data already implemented Talawakele ROR type collection study on environmental impacts of project are taken for comparison. These two small and large ROR hydropower projects. It sites are located at Kotmale Oya in Nuwara concludes that every environmental impact of Eliya District, Central Province, Sri Lanka. The small hydropower is not “small” as compared distance between the two locations is about to large hydropower and ignoring 10km. Table 1 gives the salient features of these environmental impacts of small hydropower two projects. The estimated cost of Caledonia may not be a good practice in the Himalayan reservoir project is given in 1986 prices. This region. price to be adjusted to 2014 prices for the A case study [6] has been conducted for Uma economic comparison under this study and Oya hydropower project in Sri Lanka adjusted project cost is shown in Table 11. incorporating economic and socio-

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research. However, as there are other countries environmental considerations into project Table 1 - Project features These emissions can be precisely determined by with untapped potential of hydropower, this assessment but GHG emissions from reservoir long term field measurements. In the absence of Caledonia Talawakele research outcomes will especially be important has not been considered in that. Item Reservoir ROR long term field measurements, a complete, to them. [15] rough and holistic estimate of net GHG Findings in the last two decades indicate that Catchment (km2) 235.80 310.60 emissions from hydropower projects per year 2. Literature Review hydropower reservoirs produce GHGs as CO2 concrete concrete (En) can be obtained from the Equation 1[8]. Dam type Worldwide research publications on and CH4, raising the question whether hydro gravity gravity power based generation is a clean and green En = Ee + Er +Etsd + Ecom …(1) comparison between reservoir type and ROR Dam height (m) 70.00 34.00 type hydropower plants were studied to electricity source [7],[8]. Most of the past world Where, Gross storage identify the research gap. studies [9],[10],[11],[12],[13] focused on GHG 45.10 2.50 Ee = GHG emissions due to the loss of capacity (MCM) emissions from hydropower reservoirs due to ecosystem (pre-flooding) flooded organic matter decaying under water Effective storage Er = GHG emissions from reservoir A study [1] has been conducted focusing on the 30.00 0.80 Amazonian regions of Bolivia, Brazil, and the quantifications were based on long capacity (MCM) Etsd = GHG emissions from turbine, Colombia, Ecuador and Peru, where a large term field measurements. The results were Reservoir/pond spillway and downstream river (post- 2.25 0.25 untapped hydropower potential is available, summarized for tropical and non-tropical Area (km2) flooding) regions separately. Ecom = GHG emissions from construction, qualitatively comparing the reservoir type and Rated head (m) 614.00 473.00 ROR type based on the climate change impacts. operation and maintenance Maximum turbine The study concludes that it will be necessary to Latest research findings on methods of GHG 40.00 36.90 discharge (m3/s) invest in reservoirs to increase the margin of emissions from hydropower and quantification 4.1 Estimation of Emissions from Loss of Installed capacity Ecosystem reserve and cope with climate change. The of them were studied because it is an emerging 214.00 150.00 study also indicates the local, social and study area at present. The study done by A.B. (MW) The formula of photosynthesis and respiration environmental impacts associated with the Hidrovo et al., “Accounting for GHG net Estimated Annual [8], [16] was applied to estimate Ee. This is 664.00 409.00 exploitation of hydropower. Another study [2] reservoir emissions of hydropower in Energy (GWh) given in Equation 2. Ecuador”[8], presents a rough and holistic 7,920 53,040 has also been conducted based on the climate Project cost estimate of net annual GHG emissions from (base year (base year CO2(264g) + H2O(108g) change impacts of hydropower, focusing on (million LKR) Central and South American regions where reservoirs in the absence of long term field 1986) 2014)  C6H12)O6(180g) + O (192g) 60% of the electricity demand is met through measurements. It is difficult to estimate the  Amylase (162g) …(2) hydropower. Building new storage reservoirs is costs related to all ecological impacts of The original proposal of Talawakele ROR had given in it as a potential adaptation measure. hydropower projects and their research covered suggested to take tributary diversions to the The particular element called amylase is related only deforestation. main stream (Kotmale Oya) in order to get a to growth of dry matter in a plant. Dry matter A review [3] done for Yunnan in China, larger catchment area. Accordingly, the annual weight of a plant type can be obtained from its qualitatively compares small and large 3. Case Study energy generation was originally estimated as Net Primary Production (NPP) data [8]. Table 2 hydropower projects for their environmental There are many reservoir type large 512.00 GWh in the Environmental Study in gives typical NPP values for tropical forest and implications and socio-economic consequences. hydropower projects in Sri Lanka [14] but only 1995, but five waterfalls were to be impacted cultivated land [17]. A comparison [4] between large and small two large ROR type projects, namely Upper due to that proposal. Therefore, all the tributary diversions were cancelled. That resulted in the Table 2 NPP values hydropower projects in Tibet, based on the CO2 Kotmale Hydropower Project (UKHP) equivalent states that small hydro performs (150MW) and Kukule Ganga Hydropower reduction of the annual energy to 409.00 GWh Land Type NPP (dry matter (g)/m2/year) better in terms of environmentally friendly Project (70MW) are in operation at present. in the implemented Talawakele ROR project. Tropical forest 1,500.00 development and low carbon energy than large These two were constructed during the recent Cultivated land 650.00 hydro. In Tibet, large hydropower plants are past, compared to the time period in which the 4. GHG Emissions from essential to meet the large and growing other reservoir type projects were implemented Hydropower Projects electricity demand. in Sri Lanka. Out of the above two, UKHP was In reservoirs/ponds, there are decomposed Table 3 gives the land use prior to inundation selected for the case study in this research. organic matter (flooded and upstream organic for the two selected projects.

A study [5] from Western Himalayan region of matter). These organic matters produce CO2 Table 3 - Land use of the selected projects India on environmental sustainability of ROR For UKHP, an earlier planned (1985-1987) and CH4 which reach the water surface layer Caledonia Talawakele hydropower projects has been conducted. It Caledonia reservoir type project and the and release to the atmosphere by diffusion. CH4 Reservoir ROR Land Use presents a public perception cum data already implemented Talawakele ROR type is also released by bubbling. These bubbles are Land Area Land Area collection study on environmental impacts of project are taken for comparison. These two produced in the methanogenesis process. Less Type (ha) Type (ha) small and large ROR hydropower projects. It sites are located at Kotmale Oya in Nuwara CO2 bubbles are also produced because CO2 Dam site and Tea 232.00 Tea 33.80 concludes that every environmental impact of Eliya District, Central Province, Sri Lanka. The has a higher solubility than CH4. GHG are reservoir small hydropower is not “small” as compared distance between the two locations is about again released to the atmosphere by Resettlement Tea 368.00 Tea 26.20 to large hydropower and ignoring 10km. Table 1 gives the salient features of these degasification when the water passes through area environmental impacts of small hydropower two projects. The estimated cost of Caledonia the spillways of the dam and turbines. This is Power house may not be a good practice in the Himalayan reservoir project is given in 1986 prices. This due to the change of temperature, pressure and and Tea 15.00 Forest 14.20 region. price to be adjusted to 2014 prices for the turbulence. GHG are also released to the switchyard A case study [6] has been conducted for Uma economic comparison under this study and atmosphere by diffusion in the downstream Based on the information in Table 2 and Table Oya hydropower project in Sri Lanka adjusted project cost is shown in Table 11. river. The previously generated turbulence 3, the loss of dry matter production, and hence incorporating economic and socio- helps the gases to be easily diffused to the air. the CO2 emissions per year of the two sites are

ENGINEERENGINEER 72 773 ENGINEERENGINEER -2 -1 estimated as follows. NPP of tea plantations Tropical Ef = 2,771.60 g CO2-eq m yr [18] was assumed to be that of the available . cultivated land data in literature. Table 4 - Reservoir/Pond areas Reservoir/Pond Area (km2)  Loss of dry matter production due to loss of Caledonia reservoir 2.25 tea plantations in Caledonia reservoir project Talawakele pond 0.25 = 650gm-2yr-1×(232+368+15)×104 m2 = 3,997.50 ton/year GHG emissions from reservoir/pond are estimated as follows based on Equation 3. Hence, Ee = 1.63×3,997.50 ton CO2/year = 6,515.93 ton CO2/year  Er from Caledonia reservoir -2 -1 6 2 = 2,771.60 g CO2-eq m yr × 2.25×10 m  Loss of dry matter production due to loss of = 6,236.10 ton CO2-eq/year tea plantations and forest in Talawakele ROR project  Er from Talawakele pond -2 1 4 2 -2 -1 6 2 = 650gm yr ×(33.80+26.20)×10 m + = 2,771.60 g CO2-eq m yr × 0.25×10 m -2 -1 4 2 1500g m yr ×(14.20)×10 m = 692.90 ton CO2-eq/year = 603.00 ton/year It should be noted that there may be differences Hence, Ee = 1.63 × 603 ton CO2/year between reservoir and ROR pond water = 982.89 ton CO2/year behaviour. Water is always stored in the reservoir but in Talwakele pond, water is 4.2 Estimation of Emissions from collected during the day time and used during Reservoir the night peak hours. This may affect When land is inundated, decaying organic reservoir/pond GHG emission patterns, which matter under water results in GHG emissions. have not been considered here. This GHG emission was estimated using Equation 3 [8],[18]. 4.3 Estimation of Emissions from Turbine, Spillway & Downstream River Er = Ef × Ae …(3) According to Hidrovo et al [8], out of the total direct GHG emissions (Er and Etsd), 45% would Where, come from the reservoir and 55% would come Ef = Mean reservoir emission factor from turbine, spillway and downstream. Ae = Area of reservoir/pond Therefore, Etsd was determined by Equation 4 [8]. Following long term field measurements data, past studies [8],[19],[20] have shown that Etsd = Er × 55 …(4) reservoir GHG emissions decay exponentially 45 against reservoir life.  Etsd from Caledonia project According to Zhang et al [18], it is almost = 7,621.90 ton CO2-eq/year impossible to determine this reservoir GHG emissions precisely in the absence of long term  Etsd from Talawakele ROR project field measurements. Therefore, Zhang et al has = 846.88 ton CO2-eq/year applied directly a constant mean reservoir emission factor for the total reservoir lifetime. It 4.4 Estimation of Emissions from showed that, boreal regions have a significantly Construction, Operation & Maintenance lower GHG emissions than tropical regions. Life Cycle Impact Assessment (LCIA) is an The boreal region is defined as the zone having accepted tool which allows to identify the a definite winter with snow, and a short potential environmental impacts associated summer, generally hot [21]. with a product or service, throughout its entire lifespan [22]. A LCIA has been performed by Sri Lanka is a tropical country. Long term field Hidrovo et al [22] to determine Ecom. measurements has not been done in Sri Lanka yet. Therefore, constant mean Ef of tropical For this research, LCIAs performed for regions was selected for this research for the reservoir type and ROR type hydropower total power plant lifetime as given in Equation projects were studied from literature. Ecom 3.

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-2 -1 estimated as follows. NPP of tea plantations Tropical Ef = 2,771.60 g CO22--eq m yr [18] values of the two case study projects were was assumed to be that of the available . estimated accordingly. cultivated land data in literature. Table 4 - Reservoir/Pond areas 2 Reservoir/Pond Area (km ) 4.4.1 Ecom of Caledonia reservoir project 15.30  Loss of dry matter production due to loss of Caledonia reservoir 2.25 Turconi et al [22] have critically reviewed case tea plantations in Caledonia reservoir project Talawakele pond 0.25 studies involving LCA of electricity generation = 650gm-2yr-1×(232+368+15)×104 m2 from hydropower and found that Ecom was in = 3,997.50 ton/year GHG emissions from reservoir/pond are the value range of 11-20 kg CO2-eq/MWh for estimated as follows based on Equation 3. dam reservoirs. Zhang et al [23] used LCA to Hence, Ee = 1.63×3,997.50 ton CO2/year compare two reservoir hydropower schemes, one with a concrete gravity dam (CGD) and the = 6,515.93 ton CO2/year  Er from Caledonia reservoir -2 -1 6 2 = 2,771.60 g CO22--eq m yr × 2.25×10 m other with an earth-core rockfill dam (ECRD).  Loss of dry matter production due to loss of = 6,236.10 ton CO2-eq/year They have found that the CGD scheme had a tea plantations and forest in Talawakele ROR higher Ecom (11.11 kgCO2-eq/MWh) than Figure 1 - Variation of Ecom with plant factor in a ECRD. project  Er from Talawakele pond ROR scheme with small reservoir -2 1 4 2 -2 -1 6 2 = 650gm yr ×(33.80+26.20)×10 m + = 2,771.60 g CO22--eq m yr × 0.25×10 m -2 -1 4 2 Caledonia reservoir also has a CGD and hence 1500g m yr ×(14.20)×10 m = 692.90 ton CO22--eq/year Extrapolation from Figure 1, gives the Ecom = 603.00 ton/year the best available approximation of Ecom for value for Talawakele ROR as 15.30 kgCO2- It should be noted that there may be differences Caledonia was made as 11.00 kgCO2-eq/MWh. eq/MWh, which is an increase of Ecom by 4.30 Hence, Ee = 1.63 × 603 ton CO2/year between reservoir and ROR pond water kgCO2-eq/MWh from the reference. 3 = 982.89 ton CO2/year behaviour. Water is always stored in the Total Ecom= (11kgCO2-eq/MWh)×664×10 MWh reservoir but in Talwakele pond, water is = 7,304.00 ton CO2-eq/year Based on these findings, the best available 4.2 Estimation of Emissions from collected during the day time and used during approximation of Ecom for Talawakele ROR 4.4.2 Ecom of Talawakele ROR project Reservoir the night peak hours. This may affect project was made as 12.30 kgCO2-eq/MWh, When land is inundated, decaying organic reservoir/pond GHG emission patterns, which H. Hondo [24] performed LCIA for ROR type with 50 year plant life and 30% plant factor. matter under water results in GHG emissions. have not been considered here. hydropower projects and found that a ROR (plant life: 30 years, plant factor: 45%) with This GHG emission was estimated using Total Ecom =(12.30 kgCO2-eq/MWh) × Equation 3 [8],[18]. 4.3 Estimation of Emissions from small reservoir had Ecom value as 11.00 kgCO2- 409×103 MWh eq/MWh. The variation of that with plant life Turbine, Spillway & Downstream River = 5,030.70 ton CO2-eq/year Er = Ef × Ae …(3) According to Hidrovo et al [8], out of the total and plant factor is given in Table 5 and Table 6 [24]. direct GHG emissions (Er and Etsd), 45% would 4.5 Total Emissions Where, come from the reservoir and 55% would come The net GHG emissions per year En of Table 5 - Effects of lifetimes on Ecom Ef = Mean reservoir emission factor from turbine, spillway and downstream. Caledonia reservoir project and Talawakele Lifetime 30 Ae = Area of reservoir/pond Therefore, Etsd was determined by Equation 4 10 20 50 100 ROR project were calculated and tabulated as in (years) (ref) [8[8].]. Table 7. Ecom Following long term field measurements data, (kgCO2- 30.00 16.00 11.00 8.00 5.00 past studies [8],[19],[20] have shown that Etsd = Er × 55 …(4) eq/MWh) Table 7 - Net GHG emissions (En) per year reservoir GHG emissions decay exponentially 45 Caledonia Talawakele Project Project against reservoir life. Talawakele ROR has a plant life of 50 years. Parameter (ton CO2- (ton CO2-  Etsd from Caledonia project Therefore, Ecom value was approximated as 8.00 eq/year) eq/year) According to Zhang et al [18], it is almost = 7,621.90 ton CO2-eq/year kgCO2-eq/MWh which was a reduction by 3.00 E 6,515.93 982.89 impossible to determine this reservoir GHG e kgCO2-eq/MWh than the reference. E 6,236.10 692.90 emissions precisely in the absence of long term r  Etsd from Talawakele ROR project field measurements. Therefore, Zhang et al has Etsd 7,621.90 846.88 = 846.88 ton CO22--eq/year Table 6 - Effects of plant factors on Ecom Ecom 7,304.00 5,030.70 applied directly a constant mean reservoir Plant -10 -5 45 +5 +10 En 27,677.93 7,553.37 emission factor for the total reservoir lifetime. It 4.4 Estimation of Emissions from factors (%) pts pts (ref) pts pts showed that, boreal regions have a significantly kgCO2- Construction, Operation & Maintenance 14.00 13.00 11.00 10.00 9.00 eq/MWh The specific GHG emissions have also been lower GHG emissions than tropical regions. Life Cycle Impact Assessment (LCIA) is an calculated and tabulated in Table 8. The boreal region is defined as the zone having accepted tool which allows to identify the Talawakele ROR has a plant factor of 30% and a definite winter with snow, and a short potential environmental impacts associated hence the values in Table 6 were plotted, as Table 8 - Specific GHG emission summer, generally hot [21]. with a product or service, throughout its entire shown in Figure 1, to obtain Ecom at that plant Total Specific lifespan [22]. A LCIA has been performed by GHG GHG Sri Lanka is a tropical country. Long term field factor. GWh/ Hidrovo et al [22] to determine Ecom. Project Emission Emission measurements has not been done in Sri Lanka year (ton CO2- (g CO2-eq yet. Therefore, constant mean Ef of tropical For this research, LCIAs performed for eq)/year /kWh) regions was selected for this research for the reservoir type and ROR type hydropower Caledonia 664.00 27,677.93 41.68 total power plant lifetime as given in Equation projects were studied from literature. Ecom Talawakele 409.00 7,553.37 18.47 3.

ENGINEERENGINEER 74 75 ENGINEERENGINEER It can be seen that even the GHG emissions Table 10 - Project cost and loan amount of from reservoir type hydropower projects are Talawakele ROR project negligible compared to that of thermal power Parameter Value projects where specific GHG emissions are Project cost (base year 2014) 53,040 several hundred grams per kWh. (million LKR) Original loan amount 47,251 5. Economic Comparison of (million LKR) Loan as a percentage from project 89.00 Selected Hydropower Projects cost (%) When making a decision on selecting a project Adjusted loan amount at the end of 51,834 among several project alternatives, technical grace period (million LKR) feasibility and economic viability are two important criteria to be considered in The project cost of Caledonia reservoir was engineering projects. The technical feasibilities taken from the Feasibility Study report [1]. The of the two selected projects for comparison percentage of the original loan amount from the were ensured from their feasibility study project cost was estimated as 89.00% to reports. The decision making has been based on maintain the same conditions in both projects their economic viability. for comparison. The project cost summary for the Caledonia reservoir case is given in Table 5.1 Levelized Cost of Electricity (LCOE) 11. The economic comparison between the two types of plants was carried out by determining Table 11 - Project cost and loan amount of LCOE for each case. Caledonia reservoir project Parameter Value LCOE = Total Lifetime costs (LKR) …(5) Project cost (base year 1986) 7,920 Total Lifetime Energy Output (kWh) (million LKR) Adjusted project cost in 2014 116,860 The costs and benefits of the two types of plants (million LKR) Original loan amount were estimated as detailed below. 104,005 (million LKR) Adjusted loan amount at the end of 5.2 Loan Details 114,092 Financing for the UKHP was provided by Japan grace period (million LKR) International Cooperation Agency (JICA) and the details are shown in Table 9. For this study, loan repayment schedules of Talawakele ROR and Caledonia reservoir Table 9 - Loan details of Talawakele ROR project projects were considered during the 30 years of Parameter Loan Details loan repayment period. The purpose was to obtain the cash outflow from capital Japan International Donor Cooperation Agency (JICA) repayments and interest payments (finance cost) in order to use for LCOE calculations. Agreement 2003 Grace period 10 years 5.5 Plant Operation and Maintenance Cost Actual O&M costs of the implemented Loan repayment 30 years Talawakele ROR type hydropower plant were period obtained for year 2014, 2015 and 2016. The Average interest th 0.93% on Japanese Yen (JPY) plant was commissioned on 14 July 2012 [25] rate and the O&M cost could be exactly obtained Adjusted 10.65% on Sri Lankan Rupees since 2014. Those annual O&M costs are given interest rate (LKR) in Table 12.

Table 12 - O&M cost of Talawakele ROR type hydropower plant 5.3 Project Cost and Loan Amount O&M Cost Year The project cost and the loan amount of the (million LKR) implemented Talawakele ROR project were 2014 114.00 calculated from the annual cost distribution 2015 140.00 data during the construction period. The result 2016 160.00 summary is given in Table 10.

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It can be seen that even the GHG emissions Table 10 - Project cost and loan amount of These costs were extrapolated to obtain the [27]. The last updated GEF (in 2016) of Sri from reservoir type hydropower projects are Talawakele ROR project O&M costs for the rest of lifetime. Lanka was taken for the calculations in this negligible compared to that of thermal power Parameter Value study. projects where specific GHG emissions are Project cost (base year 2014) GEF in Sri Lanka= 0.8199 ton CO2/MWh [28] 53,040 several hundred grams per kWh. (million LKR) Original loan amount 47,251 GHG emission reduction from Caledonia 55.. Economic Comparison of (million LKR) reservoir project compared to CDM baseline Loan as a percentage from project Selected Hydropower Projects 89.00 emissions cost (%) 3 =(0.8199×664×10 -27,677.93)ton CO2/year When making a decision on selecting a project Adjusted loan amount at the end of 51,834 = 516,736 ton CO2/year among several project alternatives, technical grace period (million LKR) feasibility and economic viability are two Hence, CDM benefit (million LKR/year) = important criteria to be considered in The project cost of Caledonia reservoir was (LKR1,845.58/tonCO2)×516,736tonCO2/year engineering projects. The technical feasibilities taken from the Feasibility Study report [1]. The = 954 of the two selected projects for comparison percentage of the original loan amount from the were ensured from their feasibility study project cost was estimated as 89.00% to Figure 2 - O&M cost variation of Talawakele ROR GHG emission reduction from Talawakele ROR reports. The decision making has been based on maintain the same conditions in both projects type hydropower plant their economic viability. project compared to CDM baseline emissions for comparison. The project cost summary for 3 = (0.8199×409×10 –7,553.37) ton CO2/year the Caledonia reservoir case is given in Table O&M costs of Caledonia reservoir type = 327,786 ton CO2/year 5.1 Levelized Cost of Electricity (LCOE) 11. hydropower plant were assumed to be

The economic comparison between the two proportionate to the plant capacity and hence Hence, CDM benefit (million LKR/year) types of plants was carried out by determining Table 11 - Project cost and loan amount of the calculation of those were based on the O&M =(LKR1,845.58/tonCO2)×327,786 LCOE for each case. Caledonia reservoir project costs of Talawakele ROR type hydropower tonCO2/year Parameter Value plant. A sample calculation is given below. = 605 LCOE = Total Lifetime costs (LKR) …(5) Project cost (base year 1986) 7,920 Total Lifetime Energy Output (kWh) (million LKR) O&M cost of Caledonia reservoir plant in 2014 5.7 Levelized Cost of Electricity Calculation Adjusted project cost in 2014 (million LKR) = (23×1 + 92) × 214MW 116,860 and Economic Comparison The costs and benefits of the two types of plants (million LKR) 150MW With above costs and benefits, two cash flows were estimated as detailed below. Original loan amount = 164 104,005 were prepared and Net Present Value (NPV) of (million LKR) Adjusted loan amount at the end of total costs and NPV of energy were calculated 5.2 Loan Details 114,092 5.6 Carbon Trading grace period (million LKR) considering the lifetime of the plants. The Financing for the UKHP was provided by Japan Carbon trading, which is also called Clean results are given in Table 13. International Cooperation Agency (JICA) and Development Mechanism (CDM), is an the details are shown in Table 9. For this study, loan repayment schedules of international market introduced by the Kyoto Table 13 - LCOE calculation summary Talawakele ROR and Caledonia reservoir Protocol (KP) as a global strategy to combat Caledonia Talwakele Table 9 - Loan details of Talawakele ROR project projects were considered during the 30 years of global warming [26]. loan repayment period. The purpose was to Parameter Reservoir ROR Parameter Loan Details Project Project obtain the cash outflow from capital Japan International In this study, the average carbon trading price NPV (Costs) Donor repayments and interest payments (finance 101,242 45,300 Cooperation Agency (JICA) from August 2005 to November 2017 was MLKR cost) in order to use for LCOE calculations. calculated as Euro11.87/ton CO2. Average Euro NPV (Energy) Agreement 2003 6,583.44 4,055.16 to LKR exchange rate for the same period was GWh Grace period 10 years 5.5 Plant Operation and Maintenance Cost LCOE calculated based on the CBSL data (1 Euro = 15.38 11.17 Actual O&M costs of the implemented (LKR/kWh) Loan repayment 155.48 LKR). The converted average carbon 30 years Talawakele ROR type hydropower plant were period trading price of 1,845.58 LKR /ton CO2 was obtained for year 2014, 2015 and 2016. The taken for the calculations in this study. From Table 13, it can be seen that the LCOE Average interest th 0.93% on Japanese Yen (JPY) plant was commissioned on 14 July 2012 [25] from Talawakele ROR project is substantially rate and the O&M cost could be exactly obtained If UKHP was implemented under CDM, the lower compared to the Caledonia reservoir type Adjusted 10.65% on Sri Lankan Rupees since 2014. Those annual O&M costs are given GHG emission reduction compared to baseline project. interest rate (LKR) in Table 12. emissions defined for CDM projects, could have

been sold via carbon trading to earn an income. Table 12 - O&M cost of Talawakele ROR type 6. National Benefit In this study, that was considered as benefits hydropower plant Reservoirs can store water and hence the 5.3 Project Cost and Loan Amount O&M Cost for both projects. expected operation during peak demand hours Year The project cost and the loan amount of the (million LKR) can be obtained in both dry seasons and wet implemented Talawakele ROR project were 2014 114.00 Grid Emission Factor (GEF) is a parameter to seasons of a year. In ROR, the flowing water is calculated from the annual cost distribution 2015 140.00 determine the baseline emissions for CDM collected and stored during the day time in dry data during the construction period. The result projects in the renewable energy sector and 2016 160.00 seasons in order to operate during the night summary is given in Table 10. waste heat/gas recovery sector. It refers to CO2 peak. The expected peak operation may not emission factor associated with each unit of always be possible because the stored water electricity provided by an electricity system

ENGINEERENGINEER 6 7 ENGINEERENGINEER amount may not be sufficient to cover the entire SCC daily records the maximum output (MW) peak period which is from 18.30 hours to 22.30 of UKHP during the night peak operation and hours in Sri Lanka. the time it occurred. In this study, it was assumed that the plant operated with that National benefits due to night peak operation output for the total night peak period in the of Caledonia reservoir and Talawakele ROR respective days. Accordingly, the generated hydropower plants were calculated as detailed night peak energy were calculated for each year below. from 2014 to 2016 as shown in Table 14.

Installed capacity = 214 The results of Case 1 and Case 2 are Annual energy (GWh) = 664 summarized and given in Table 15. LCOE (LKR/kWh) = 15.38 Night peak hours per day = 4 Table 15 - Annual financial loss or negative Annual night peak generation (GWh) national benefit based on rated and actual = 214×4×365×90%×10-3 operation of Talawakele ROR project = 281.20 Case 1: Case 2: Year Loss Loss Annual cost of generation during night peak (million LKR) (million LKR) (million LKR) = 281.20×15.38 2014 2,123 2,404 = 4,325 2015 2,123 2,236 Similarly, calculations were made for Talawakele ROR hydropower plant. 2016 2,123 2,694 Accordingly, Annual night peak generation (GWh) 7. Conclusions and = 197.10 Recommendations Annual cost of generation during night peak It is concluded that GHG emission (million LKR) = 197.10×11.17 considerations are not strong enough to = 2,202 discourage reservoir type new hydropower plant developments. Case 1: assuming rated operation of UKHP during the total night peak period of a year, According to the LCOE results, it can be concluded that the ROR type has the overall Annual financial loss or negative national economic benefit in the case of UKHP, but if the benefit due to not having the Caledonia project objective is solely to capture the reservoir plant (million LKR) maximum hydropower potential or peak = 4,325 - 2,202 = 2,123 serving, it can be concluded that the reservoir type has a better overall economic benefit to the According to the results shown in Case 1, even country. though the Talwakele ROR hydropower plant operates in its full capacity (assuming every It is recommended that for similar future large year is a wet year), there is an annual loss of hydropower developments, a detailed similar LKR 2,123 million to the country by not having study to be carried out before taking the the Caledonia reservoir plant for peak serving. decision on reservoir construction for hydropower generation. A case by case study is Case 2: based on the actual night peak recommended to be conducted because the operation data of UKHP obtained from System environmental factors such as the impact of Control Centre (SCC) of Ceylon Electricity flooding, melting snow and ice, etc. vary from Board (CEB), annual financial loss, location to location. The methodology Table 14 - night peak generation of UKHP on actual presented in this study can be followed for such basis and financial loss or negative national benefit studies with suitable modifications where by not having Caledonia reservoir plant necessary. Annual Annual Cost Night Peak Financial of Night Peak Although hydropower projects do not have Year Generation Loss Generation zero GHG emissions, as per this study, they (GWh) (million (million LKR) are much less compared to thermal power LKR) plants. In view of grave need for limiting the 2014 172.00 1921 2,404 average global temperature increase to 2 0C by 2015 187.00 2089 2,236 the end of this century and the GHG emission 2016 146.00 1631 2,694 reduction commitments made at the COP21 at

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amount may not be sufficient to cover the entire SCC daily records the maximum output (MW) Paris, it is recommended that as many large- 7. Yang, L. et al., “Progress in the Studies on the peak period which is from 18.30 hours to 22.30 of UKHP during the night peak operation and scale hydropower projects as possible to be Greenhouse Gas Emissions from Reservoirs,” hours in Sri Lanka. the time it occurred. In this study, it was implemented capturing all possible Acta Ecologica Sinica, vol. 34, no.4, pp. 204-212, assumed that the plant operated with that hydropower potential in the world. Aug. 2014.

National benefits due to night peak operation output for the total night peak period in the 8. Hidrovo, A. B. et al., “Accounting for GHG net of Caledonia reservoir and Talawakele ROR respective days. Accordingly, the generated Acknowledgement Reservoir Emissions of Hydropower in hydropower plants were calculated as detailed night peak energy were calculated for each year Authors wish to acknowledge the assistance Ecuador,” Renewable Energy, vol. 112, pp. 209- below. from 2014 to 2016 as shown in Table 14. given by the Project Director of UKHP to obtain 221, Nov. 2017. data related to the existing Talawakele run of Installed capacity = 214 The results of Case 1 and Case 2 are the river type hydropower project. At the same 9. Descloux, S. et al., “Methane and Nitrous Annual energy (GWh) = 664 summarized and given in Table 15. time, authors wish to acknowledge the Chief Oxide Annual Emissions from an Old LCOE (LKR/kWh) = 15.38 Engineer of Generation Planning Unit of Eutrophic Temperate Reservoir,” Science of The Night peak hours per day = 4 Table 15 - Annual financial loss or negative Ceylon Electricity Board for giving access to Total Environment, vol. 598, pp. 959-972, Nov.2017. Annual night peak generation (GWh) national benefit based on rated and actual obtain data related to the previously planned

= 214×4×365×90%×10-3 operation of Talawakele ROR project Caledonia reservoir type hydropower project. Case 1: Case 2: 10. Santos, M. A. D. et al., “Estimation of GHG = 281.20 Authors also wish to acknowledge the Year Loss Loss Emissions by Hydroelectric Reservoirs: The Annual cost of generation during night peak (million LKR) (million LKR) assistance given by Deputy General Manager of Brazilian Case,” Energy, vol.133, pp. 99-107, (million LKR) = 281.20×15.38 2014 2,123 2,404 the System Control Centre of Ceylon Electricity Aug. 2017. = 4,325 Board to obtain the past night peak operational 2015 2,123 2,236 Similarly, calculations were made for data of UKHP. Finally, authors wish to 11. Demarty, M. and Bastien, J., “GHG 2016 2,123 2,694 Talawakele ROR hydropower plant. acknowledge the Chief Engineer of UKHP for Emissions from Hydroelectric Reservoirs in Accordingly, providing the actual operation and Tropical and Equatorial Regions: Review of 20 years of CH Emission Measurements,” vol.39, Annual night peak generation (GWh) maintenance cost data of the existing UKHP. 4 7. Conclusions and pp. 4197-4206, Jul. 2011. = 197.10 Recommendations Annual cost of generation during night peak It is concluded that GHG emission References 12. Demlas, R., and Lacaux, C. G., “Emissions of (million LKR) = 197.10×11.17 considerations are not strong enough to Greenhouse Gases from the Tropical = 2,202 discourage reservoir type new hydropower 1. 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Distrib., vol. to thermo-power plants,” Energy Policy, vol.34, reservoir plant (million LKR) maximum hydropower potential or peak 149, no. 3, pp. 249-255, May 2002. no.4, pp. 481-488, Mar. 2006. = 4,325 - 2,202 = 2,123 serving, it can be concluded that the reservoir type has a better overall economic benefit to the 3. Hennig, T. et al., “Review of Yunnan’s 14. [Online]. Available: According to the results shown in Case 1, even country. Hydropower Development. Comparing small https://www.ceb.lk/power-plants-list/en. though the Talwakele ROR hydropower plant and large Hydropower Projects Regarding their Environmental Implications and Socio-economic 15. 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Guo, Z. et al., “Ecosystem Functions, services operation data of UKHP obtained from System environmental factors such as the impact of the CO2 Equivalent,” Renewable and Sustainable and their values – a case study in Xingshan Control Centre (SCC) of Ceylon Electricity flooding, melting snow and ice, etc. vary from Energy Reviews, vol. 50, pp. 176–185, Oct. 2013. County of China,” Ecological Economics, vol. 38, no. 1, pp. 141-154, Jul. 2001. Board (CEB), annual financial loss, location to location. The methodology 5. Kumar, D. and Katoch, S. S., “Environmental presented in this study can be followed for such Table 14 - night peak generation of UKHP on actual Sustainability of Run of the River Hydropower 17. World Heritage Encyclopedia. Primary basis and financial loss or negative national benefit studies with suitable modifications where Projects: A Study from Western Himalayan Production[Online].Available: by not having Caledonia reservoir plant necessary. 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