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Small Hydro: New Research Initiative to Enable Further Opportunities.

August 3, 2011

This week, Australian specialist small hydropower portfolio developer Waratah Power announced a funding agreement with the NSW Government to advance research related to sustainable design of hydro turbines suitable for small hydropower projects.

Small hydropower is experiencing significant growth rates.  Industry analysis forecast a doubling of installed capacity of small hydropower in the next ten years.

Development and application opportunities for small hydro remain extremely large for the United States, Europe, and Asia.

Hydropower technologies have experienced renewed interest in their potential to unlock underutilised resource potential.  Venture capital investment has started to seek out new turbine technologies – particularly hydrokinetic  and marine turbine variations – which seek to capture energy from energy density available in rivers and oceans.  Small hydropower Private Equity and Venture Capital investment grew 1,704% from 2009, to 2010 (albeit from a small base), as we’ve previously reported.  Since 2004, small hydro investment growth increased at a Compound Annual Growth Rate (CAGR) of 19%, according to Bloomberg New Energy Finance.  Small hydropower projects are deemed attractive due to their low capital costs, capacity to benefit from low flow regimes, speed of development through to operation, and reduced negative environmental and social impacts.

While there is often in-principle support for the deployment of renewable energy technology projects, as wind power developers have learnt world-wide there are often conflicting emotions once a project is proposed at any particular location – either due to ecological or visual amenity impacts.  Contextual and regulatory barriers can therefore present a challenge even where technology or asset finance risk have been overcome.

For many years, research to enable hydro development and reduce ecological impacts of hydropower turbines has been led by the United States.  The Advanced Hydro Turbine Systems program of the Department of Energy undertook primary research to establish appropriate bio design criteria for conventional turbines so as to minimise fish mortality and morbidity rates.

Small hydropower projects are subject to similar demands related to aquatic species survivability.  Technically and Economically-feasible project sites are often entirely discounted where ecological sensitivities exist.  In the UK, the England and Wales Environment Agency undertook a national study of hydropower site options – and immediately discounted 46% of them largely due to environmental concerns.

While turbine characteristics can be easily proven through Computerised Fluid Dynamic modelling, aquatic species response to key stresses remains largely unknown, other than for salmonid species in the United States.

The Australian research seeks to build on the US work, and will involve specialists from leading US research institutions.  Further primary research to test aquatic species for vulnerability would enable guidelines and standards for turbine design criteria to be established.

In Australia, Commonwealth and State Governments seek visible and uncontroversial renewable energy investments.  Recent efforts at renewable energy support have fallen foul of audit standards (residential solar PV), community objections (wind) and technology/resource risk (geothermal).

With many thousands of potential existing barrage sites at which micro, small, and hydrokinetic turbines might be developed, the provision by the government of bio design criteria for turbines is a low-cost, uncontroversial option which could spur both project and technology investment.  The New South Wales government has appreciated the opportunity, and understood the non-market barrier hindering commercial exploitation.

Waratah Power has been working on the application of innovative low-head technology in Australia and has a number of projects on the drawing board in Australia and Asia.  Their director responsible for Government affairs, Andrew Jones, now says that they are seeing new interest from government scientists, policy-makers, and regulatory authorities in breaking down barriers to small hydro investment.  Andrew is positive about the prospects:

‘We now see a priorisation of efforts to facilitate project investment, on a bipartisan support basis, through regulatory barrier removal.  In particular efforts are focussed on developing science-based benchmarks.  The concern is related to threatened fish species in rivers. The outcome of the research we are now undertaking with our Government research colleagues should be guidelines and parameters that project proponents can work with for turbine design irrespective of technology.  We expect useable research outcomes in a relatively short time-frame so the outlook is very positive.’

While this research is likely to require expansion and updating to include further species and particularities – including for marine purposes – it has the real potential to kick-start an important and growing sustainable energy niche with global application potential.

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