The Economic Comparison of Reservoir Type and Run of the River Type Hydropower Plants: A Case Study for Upper Kotmale Hydropower Plant

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.