Approaches to hydropower operations and maintenance
In the context of aging hydropower infrastructure, there is a clear need for forward-looking operations and maintenance (O&M) strategies that can achieve the best outcomes under financial and resource-limited constraints. the International Hydropower Association (IHA)’s hydropower statistics indicate that by 2030, over half of the world’s current 1,246GW of installed capacity will either have been renovated or will be due for renovation, for the purpose of upgrading and modernisation. By 2050, it is estimated that almost all the entire current capacity will have required modernisation.
Implementing efficient O&M programmes can be challenging, particularly in developing countries where proper training and a lack of institutional capacity can result in poorly maintained and operated hydropower generating stations. Poor O&M of hydropower facilities can result in significant consequences, such as high outage rates, loss of performance and high rehabilitation and replacement costs. Ultimately, it can lead to lost energy production and loss of revenue.
More indirect and longer-term impacts of poor O&M can result in dam safety concerns and public or environmental safety issues, which could lead to loss of life or property.
There are a number of different models for the O&M of hydropower assets. Typically, O&M is managed and implemented by the owners of the facility. But significant challenges around financing O&M programmes, training staff and building capacity can render this model unfeasible. In this article, we explore three classifications for O&M models discussed in a workshop at the 2017 World Hydropower Congress organised in collaboration with the World Bank Group. This article looks at the challenges and opportunities of each model, and cites examples of where these are being used successfully.
Models for O&M
The first model is O&M in the hands of the owner of the scheme. This is the standard model worldwide. The advantages of adopting the ownerbased model is that the responsibility for O&M lies with the entity with the greatest interest in ensuring a sustainable flow of revenues and the long-term safety and performance of the works.
In most cases, this results in the lowest cost for the owner. However, in developing countries, the owner is often a public organisation which may not be in a position to ensure a proper level of O&M performance with its limited human and financial resources. An example of where this model works well is in Ethiopia, where the Ethiopian Electric Power Company (EEP), a fully governmentowned public enterprise, owns and operates roughly 3,800MW of existing hydropower, with a further 6,700MW of new hydropower on the near-term horizon. EEP intends to maximise plant output through a comprehensive maintenance programme, which aims to optimise availability, while maintaining high standards for environmental protection and overall safety.
In the second model, O&M responsibility is either totally or partially transferred to a private or semi-private independent operator under a fixed O&M (or management) contract with the owner, often for a specified time period. After this period, the project owner would assume responsibility for the O&M programme.
This model offers an alternative that can mitigate the lack of capacity and financial resources in many countries. It also creates an opportunity for the independent operator to build knowledge and capacity within the facility, and to share and disseminate best practices. The disadvantage of this model is that in some cases it is difficult to set up a fair contract which balances the diverging objectives of the owner and the operator (risks and rewards). In addition, these types of O&M models typically run over a five to 10-year contract, and as such do not necessarily guarantee a long-term solution.
The Mount Coffee hydropower project in Liberia was recently rebuilt after the facility was sabotaged. At the same time, the capacity of the plant was increased from 64MW to 88MW. Since 1990, Liberia Electricity Corporation (LEC) has lost a considerable amount of its internal capacity and expertise to operate Mount Coffee. In order to secure sustainable generation, LEC and its lenders decided to award a five-year O&M and training contract to Swiss based Hydro Operation International. This agreement is intended to rebuild the capacity and experience of the owner/operator’s staff and ensure they will be able to operate the plant without assistance after the five-year period.
In the third model, responsibility for O&M is entrusted to the Engineering, Procurement, and Construction (EPC) contractor as part of the EPC contract. This model can compensate for the absence of other viable alternatives at the time of commissioning. It can also serve as an incentive for the EPC contractor to build the project to high standards, in addition to any contractual performance liabilities and guarantees. However, this approach would typically increase the overall operating costs of the project. In some cases, the EPC contractors will subcontract this task to a third party (a professional operator). For the Beni Haroun hydropower project in Algeria, which is part of a large multipurpose facility, GE Renewable Energy has implemented a ‘turnkey’ O&M programme. This approach is intended to promote the sustainability, efficiency and reliability of the hydropower project.
Finding a suitable fit
While there is no single best model, which would be a most suitable fit in all situations and projects, the first (owner-based) model was found to be the more cost-effective and sustainable solution over the long term in countries that have the capacity to take on this model.
As mentioned above, the three models were discussed by participants at the World Hydropower Congress in Addis Ababa, Ethiopia. Participants shared O&M practices, and addressed some of the challenges faced by developing countries. The main outcome of these discussions was for IHA to support the World Bank in properly documenting the three O&M models summarised in this article, and to ensure the information and good practices are shared with the wider hydropower community.
For developing regions, there remains a clear need to implement training and build capacity to ensure industry good practices in O&M are implemented prior to commissioning. As part of our ongoing work on O&M, IHA will emphasis practices that help to address these challenges. We are also exploring other opportunities for improved O&M, including working with companies who are advancing the digitisation of hydropower assets to better inform O&M decisions and actions in the future.