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Knowledge Exchange Report RETROSPECTIVE REVIEW OF ESMAP TECHNICAL ASSISTANCE MINI-HYDRO DEVELOPMENT ON IRRIGATION DAMS AND CANAL DROPS RETROSPECTIVE REVIEW OF ESMAP TECHNICAL ASSISTANCE TO SUPPORT DEVELOPMENT OF MINI-HYDRO FACILITIES ON IRRIGATION DAMS AND CANAL DROPS IN INDIA KNOWLEDGE EXCHANGE REPORT ESMAP/ World Bank 1818 H Street, Washington DC DECEMBER 2010 DEVELOPED BY SIVAGURU ENERGY CONSULTANTS & SOFTWARE DEVELOPERS PVT LTD. PREPARED BY 1 SECSD Pvt Ltd. RETROSPECTIVE REVIEW OF ESMAP TECHNICAL ASSISTANCE MINI-HYDRO DEVELOPMENT ON IRRIGATION DAMS AND CANAL DROPS CONTENTS Section 1 Executive Summary ...................................................................................................... 1-1 Part 1 .1 Background ................................................................................................................ 1-1 Part 1 .2 Purpose of Review ..................................................................................................... 1-2 Part 1 .3 Structure of the Report ............................................................................................... 1-3 Part 1 .4 Performance of Implemented Projects by State ........................................................ 1-3 Part 1 .5 Design Approach ........................................................................................................ 1-4 Part 1 .6 Implementation of Construction ................................................................................. 1-5 Part 1 .7 Energy Production ...................................................................................................... 1-5 Part 1 .8 Cost of Production ...................................................................................................... 1-5 Part 1 .9 Benefits....................................................................................................................... 1-5 Part 1 .10 Implementation Challenges ...................................................................................... 1-6 Part 1 .11 Institutional Framework ............................................................................................ 1-6 Part 1 .12 Good Practice Projects............................................................................................. 1-7 Part 1 .13 Conclusions and Recommendations ........................................................................ 1-7 1.13.1 Conclusions ................................................................................................................. 1-7 1.13.2 Recommendations ...................................................................................................... 1-9 Section 2 Introduction ................................................................................................................... 2-1 Part 2 .1 General ....................................................................................................................... 2-1 Part 2 .2 Types of Hydropower Projects ................................................................................... 2-2 Part 2 .3 Components of Hydro Projects .................................................................................. 2-3 2.3.1 Infrastructure ................................................................................................................. 2-3 2.3.2 Civil Works .................................................................................................................... 2-3 2.3.3 Electro-Mechanical Equipment ..................................................................................... 2-3 2.3.4 Hydro-Mechanical Equipment ....................................................................................... 2-3 2.3.5 Switchyard and Transmission ....................................................................................... 2-3 Section 3 Strategic Context .......................................................................................................... 3-1 Part 3 .1 Reasons for taking Concessions ................................................................................ 3-1 Part 3 .2 Issues addressed by the IPPs .................................................................................... 3-1 Part 3 .3 Project Types and Parameters ................................................................................... 3-2 Part 3 .4 Institutional Framework .............................................................................................. 3-3 Part 3 .5 Institutional Assessment............................................................................................. 3-4 Part 3 .6 Concession Award and Project Development ............................................................ 3-4 3.6.1 Allotment ....................................................................................................................... 3-5 3.6.2 Agreement ..................................................................................................................... 3-5 3.6.3 Purchase of Electricity ................................................................................................... 3-5 3.6.4 Tax ................................................................................................................................ 3-5 3.6.5 Duties and Taxes .......................................................................................................... 3-5 3.6.6 Incentives and Subsides ............................................................................................... 3-5 Part 3 .7 . Contractual Arrangements ....................................................................................... 3-5 3.7.1 Allotment and Agreements ............................................................................................ 3-5 3.7.2 Water Rights ................................................................................................................. 3-6 3.7.3 Power Purchase Agreement ......................................................................................... 3-6 3.7.4 Loan Terms and Agreement ......................................................................................... 3-6 3.7.5 Implementation Contract ............................................................................................... 3-6 Part 3 .8 Stakeholders .............................................................................................................. 3-7 Part 3 .9 Environmental Assessment ........................................................................................ 3-8 Section 4 Assessment of the Projects .......................................................................................... 4-1 Part 4 .1 Technical Assessment ............................................................................................... 4-1 4.1.1 Hydrological Assessment with Flow Duration Curves .................................................. 4-1 4.1.2 Energy Generation ........................................................................................................ 4-2 4.1.3 Optimization Analyses ................................................................................................... 4-3 4.1.4 Layout............................................................................................................................ 4-3 4.1.5 Construction .................................................................................................................. 4-4 Part 4 .2 Economic and Financial Assessment ........................................................................ 4-5 Part 4 .3 Ranking of the Projects .............................................................................................. 4-9 PREPARED BY 1-1 SECSD Pvt Ltd. RETROSPECTIVE REVIEW OF ESMAP TECHNICAL ASSISTANCE MINI-HYDRO DEVELOPMENT ON IRRIGATION DAMS AND CANAL DROPS Part 4 .4 Comparison .............................................................................................................. 4-10 Part 4 .5 Cutoff Analysis ......................................................................................................... 4-11 Part 4 .6 CDM Benefits ........................................................................................................... 4-11 Section 5 Key Drivers of Success / Failure, Lessons Learned, and Recommendations ............. 5-1 Part 5 .1 Key Drivers of Success/ Failure ................................................................................. 5-1 5.1.1 Planning ........................................................................................................................ 5-1 5.1.2 Cost Overruns ............................................................................................................... 5-1 5.1.3 Design Staff ................................................................................................................... 5-1 5.1.4 Construction Period ....................................................................................................... 5-2 5.1.5 Specifications ................................................................................................................ 5-2 5.1.6 Tendering ...................................................................................................................... 5-2 5.1.7 Detailed Engineering ..................................................................................................... 5-2 5.1.8 Changes in Hydrological Conditions ............................................................................
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