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How do I calculate the feed-in tariff for a hydropower project?

Posted by Tasha Kosviner on 5 March 2014 at 10:46 am

Q I am considering creating a new hydropower scheme. Can you please explain how to calculate the feed-in tariff for a small hydropower project?

A Under the government’s new community energy strategy, greater financial incentives have become available for groups looking to generate power for their local community. For communities located near a waterway, hydropower may be a viable option. The financial incentives under the strategy cover grants for feasibility studies and loans for implementation but feed-in tariffs (FITs) are an already operating financial incentive in the form of regular payments made for the amount of power generated by your scheme.

If your installation is eligible and connected to the grid, you will receive FITs in two ways for the power you generate:

1. You will receive a payment for every kilowatt hour (kWh) you generate - regardless of whether you use it or feed it back into the grid. This is known as the generation tariff.

2. The export tariff is an additional payment you receive for any electricity you do not use on site which is fed back into the grid. For smaller projects, the quantity of energy you are paid for is usually 'deemed' at 50 per cent meaning it is assumed that you will be feeding back half of what you generate into the grid. You may like to have a look at this blog which examines whether it is better to use a 'deemed' export rate, or to have a meter fitted. 

Then there are of course the savings you'll make for buying less electricity from the grid. 

Feed in tariffs are set at different rates for solar PV installations, wind power installations and micro hydro schemes. You can read more about the different feed-in tariff rates here but for small hydro turbines of up to 15kW, the generation tariff is currently 21.65p/kWh and the export tariff is 4.64p/kWh.

Simon Hamlyn from the British Hydropower Association has this information about how to calculate annual FIT income for a 10kW installation:

“If a scheme generated 10kW for one hour then the income would be £2.165 (10 x £0.2165) from generation and £0.464 (10 x £0.0464) from export. The generation tariff gets paid whether you export or not. If you don’t export you would not receive the export tariff but you would be off-setting your own consumption which would be producing a saving of the order of 11p/kWh.

“However, turbines don’t run at full power all of the time – they would do if it rained all of the time. The general rule when estimating how much energy will be produced by a turbine is that it will run at 40% of what would be produced if it was running constantly (the figure for wind is 30%). This is known as the capacity factor. The actual number is dependent on the watercourse and the sizing of the turbine – a calculation that can be made once you reach the feasibility stage of your project.  Therefore, the energy a 10kW turbine would produce in a year is:

10kW x 8,760 (hours in a year) x 40% = 35,040kWh.  

To reach a figure for your FITs, you multiply this by the combined tariff rates (21.65 + 4.64 = 26.26p/kWh) to get an income of £9,202pa

From 1 April 2014 the feed-in tariff rates will change as follows: Generation tariff 20.57p, export tariff 4.77p. 

If you're serious about learning more about hydropower you my be interested in one of the BHA's training courses

More information

YouGen guide to hydro electricity

YouGen guide to feed-in tariffs

From the blog

Community groups 'disappointed with government's energy strategy (Feb 2014)

Photo Credit: IronRodArt - Royce Bair ("Star Shooter") via Compfight cc

If you have a question about anything in the above blog, please ask it in the comments section below.

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Comments

2 comments - read them below or add one

Hertha

HerthaComment left on: 25 March 2014 at 9:30 am

There is a cost estimator for hydropower on this website that will calculate the return on investment if you input the predicted energy capture, you just need your email to register

http://www.hydromatch.com/resources/hydropower_cost_estimator

The Feed-in tariffs are slightly different than in this article, for example export 4.77p, see latest figures here

https://www.ofgem.gov.uk/ofgem-publications/86011/rpiadjustedtariffsnon-pvconditionaldaterpiadjusted.pdf

These rates are the same for domestic, business or community schemes.

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FrancisMcN

FrancisMcNComment left on: 5 March 2014 at 4:12 pm

Tasha,

 

Maybe I have misread this but there is no higher rate for community projects as opposed to any other applicant. Additionally, it is extremely unlikely that anyone still contemplating a hydro project would be able to qualify for the current FiT rate which is actually 22.23p per kWh as this degresses to 20.57p on 31 March  2014 for new installations and the process to get an abstraction licence and planning permission would be doing well to be completed by this time next year!

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