Knight Piésold 1 Hydro Development Navigating the Process Norm Bishop
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Hydro Development
Navigating the Process
Norm Bishop
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Starting Point
North America is blessed with all the attributes for cost-effective, low impact hydropower
Plentiful Renewable Energy Opportunities
Incentives & Low Cost Equipment with Financing
Hydro is a significant contributor to the “Green Jobs Economy”
Many site attributes are needed to make a successful project
Team work and innovation = key to success
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The Common Issues Sustainable Business Social Acceptance &
Community Image Environmental Impacts &
Mitigation Studies, Studies, Studies Consultation & Licensing Over Engineering Legal, Water Rights & Land
Ownership Insurance & Bonding Controlling Pre-Financial
Closing Cost
Equity & Financing & Incentives
Financial Closing Contract Management &
Implementation Controlling Budget &
Schedule Risk Management Project Turnover Project Operation &
Maintenance “The Low Water Year(s)”
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The Seven Desired Elements
Power Sales Agreement
FERC License or Exemption
401, 404, 408, Section 10
State & Local Permits
Land Ownership or Right
Water Rights
Business Plan (Prospectus, Return on Equity, Return on Investment, Life Cycle Costs and Revenues)
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Think Business Viability Understand Flow, & Instream Flow
Requirements (IFR) & How Flow Varies (cfs) Understand The Difference in Water Levels
(ft) at Intake & Powerhouse. Understand How Both Affect Power Output
(MWhrs)& Available Capacity (MWs) Understand Power Purchase Agreement
(PPAs); Payments-what, when, where, how & how much. ($$)
Understand the Costs & Timing-what, when, where, how & how much. ($$)
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Think Run-of-River Hydropower
No change to natural hydrograph - flow downstream unchanged from natural conditions
No Dams; “Water Sharing” Locate Above Impassible Stream Feature or
Accommodate Free Stream Movement Instream Flow Requirements (IFR) to Sustain
Ecosystem Health EcoLogo or Low Impact Certification
Innergex – Rutherford
Creek Project
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Use Common Sense Thinking Chances Are Someone Has Looked at Site Before Incorporate Low Impact Hydro Existing Dam (97% have no hydropower works) Run-of-River (Little Change to Flow or Use) Avoid Affecting Threatened or Endangered Species;
and Avoid Affecting Fish. Financial Incentives-They’ve Changed; New World! FERC Exemption
5-Megawatt (MW) Exemption Conduit Exemption (Conduit Constructed for Non-
Hydropower Purpose) Existing Environmental Resources & Project Effects
Information Available? FERC-First as Advisor, Then as Regulator! “Small”; “Simple”; “Good Value”;
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How Simple? It Works!
Hydro Entrepreneur
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Get the Project Image & Foot Print Right
Listen & Respect All Stakeholders Ideas
Small Project are Not Big Projects
Make Best Value Tradeoffs Run of River; Low Impact Hydro
Consider a Smaller Installed Capacity, that “Shares” Water
Water Deliveries Systems Can Result in Nice Energy Recovery Small Hydro Opportunities
Put Ideas on Paper (Recycled Paper!); Use Scale Models to Get It Right.
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Modern Project Delivery Site Screening Exemption, or not Go for Waivers Settlement
Agreements Site Identification Feasibility/Environmen
tal Assessment (EA) Licensing & Permitting Basic Design EPC Bid Package &
Price
Equity & Financing
Financial Closing
EPC Implementation
EPC Turnover
Operation
Post Operation Support/Rehabilitation
Relicensing & Permitting
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Financial Risk Mitigation Project Framework
& Comprehensive Legal Agreements
Control Project Delivery (Cost, Schedule, Result)
Project Management
Claims Management
Indemnify & Insure Against Risks Political
Currency
Force Majeure
Liability
Bonding
Other
Independent Quality Control & Inspection
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What Attracts Investment? Good Business Practices Project Should Make Technical,
Environmental, Social, Political and Financial Sense.
Satisfactory Return on Investment (Equity, Debt)
Past Satisfactory Financial Dealings & Strength
Profitable Past Ventures Good Leadership Investment is in the Investor’s Comfort Zone.
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Post 1603 Grant Finance Structures Sale Lease Back
The investor purchases the asset and leases it back to the off taker to monetize or take advantage of tax incentives.
Preferred Structure for Government Entities
Sets Predictable payment rate for the both parties
Allows the investor (Owner) to take advantage of the tax credits, depreciation, subsidies and incentives
Tax Equity Flip The investor owns the asset for a minimum of 5 years and monetizes tax credits and incentives. Sells asset at end of incentives and when the return has been reached
Allows the developer or third party to buy back the asset at a discount
Allows the Tax Equity investor to take advantage of all incentives but limit ownership to a predetermined time frame
Strong long term cash flow strategy for an IPP.
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Some Insights into Successful Projects
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Innovative Science & Engineering
Understand the Issues & Solve: Hydrology Studies
Intakes
Penstocks
Powerhouses
Environmental and Socioeconomic Issues
Community & Indian Nation Involvement
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Innovative Science & Engineering Environmental and Socioeconomic Issues
Integrated multiple discipline team approach essential: • Environmental and Permitting
• Instream Flow Requirements (IFR)
• Bypass-valves and ramping
• Engineering and Constructability
Be innovative with mitigation measures (Social Acceptance): • Fisheries Enhancement Channels
• Artificial Whitewater Park
• Creative Ideas & Solutions
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Innovative Science & Engineering
Physical Hydraulic
Models
Computer Models
Site Investigations
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Innovative Science & Engineering Intakes
Typically the “Achilles Heel” of a hydro scheme
Often located on high energy system with heavy sediment bedload.
Typically requires expensive and often ineffective desanders
Innovative cost-effective designs: Coanda (Aqua-Sheer) Screens
Inflatable Rubber Dams + Vortex Desander
No impoundment structure & subterranean options
Renewable Power Corp. – McNair Creek Project
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Coanda Screen Intakes
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Coanda Screen Intakes
Renewable Power Corp. – McNair Creek Project
Cloudworks Energy Inc. - Fire Creek Project
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Rubber Weir Intakes
Innergex. – Rutherford Creek Project
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Intake Model Testing
Vortex Desander – combined
with Instream Flow
Requirements (IFR)
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Innovative Science & Engineering
Penstocks One of the most expensive components
Penstock designed to minimize Capital cost: Routing – Buried, Partially Buried vs Surface
Soil restraint vs Anchor blocks
Latest Construction material: • Steel
• HDPE – “Weholite”
• Glass Reinforced Plastic (GRP)
Configuration
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Innovative Science & Engineering
Powerhouses Challenging foundation conditions
Aesthetic appeal becoming more and more important
Innergex – Rutherford Creek Project
Plutonic – East Toba Project
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High Head Powerhouses
Pelton or Francis turbines
By-pass valves for Francis units
Automated head-level control
Cloudworks - Fire Creek Project
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Low & Medium Head Powerhouses
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Mitigation Measures
Whitewater Kayaking
Park
Enhanced Hiking Trails
Fisheries Enhancement Channels
Innergex –
Rutherford
Creek Project
Renewable Power Corp. –
McNair Creek Project
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Innovative Science & Engineering
Native Peoples & First Nations Involvement (Aboriginal) Early consultation essential
“Social Licence” to exist
Look for training and employment opportunities
Plutonic Power - Montrose Creek Project
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NGO, Community & Native People Involvement
Plutonic Power – Montrose Creek Project
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