hydroelectric power station with a capacity of 50 kW
Project: hydroelectric power station with a capacity of 50 kW
cost of the project: 180.000 EUR
feed in tarif: 0,17448 Euro / KWh, valid till 2030
income feed in tariff: 333 days * 24 h * 50 kW * 0,17448 Euro / Kwh = 69.882 Euro/year
total income feed in tariff : 69.882 euro/year * 12 year = 838.584 Euro
Project Summary :
• Investments or cooperation in the joint implementation of the project for the installation and subsequent operation of micro power plants.
• The project is performed by stages. The first stage is the first plant with a capacity of 50 kW. After putting in operation and achieving of the current profitability, – transition to subsequent stages
Volume of necessary investments:
• The first stage is 180 thousand EUR
• Subsequent stages – depends on the scope of the project
• First stage up to 4 years.
Conditions of investor participation:
• Share participation in the project, or a fixed return on the amount of investments, or shall be discussed the investor’s proposals.
Location of the hydroelectric power station.
For location of the first hydroelectric power station are considered two options for the location of the facility: Kyiv region and Vinnytsia region. Preliminary hydrotechnical information was collected for each of the objects, were made preliminary agreements with the site owners, preliminary calculations of the necessary preparatory work and other measures were carried out. The final decision on the choice of the object will be made after the registration of the decision on joint investment and legal formalities of the relationship with the investor.
Equipment for the hydroelectric power station.
Due to the specifics of the selected sites and with a view to shortening the payback period, it was decided to use equipment of Ukrainian manufacture.
To reduce the costs of general construction works from the list of possible sites for the location of the hydroelectric power station, were selected only those sites, where there is the possibility of installing equipment on the principle of “overflow dam”:
Also by the choosing the switching equipment, the distance to the transmission networks of electricity to the consumer is taken into account.
Of all the offers on the Ukrainian market of manufacturers have been selected the optimal proposals on the criteria of price / quality from among those already having experience in implementing similar solutions. There were conducted preliminary consultations with the manufacturer. There have been studied issues of operational experience of already implemented projects. The opinion of customers on previously realized projects of such equipment was also taken into account.
Terms of project realization
The period of all preparatory technical and legal works is estimated up to 3-5 months. This period does not depend on the time of the year. During this time, all technical and legal measures will be taken.
Legal and permissive measures:
• Company registration taking into account the agreements reached with the participation of the investor
• Obtaining of the necessary licenses, permits for the type of activity
• Conclusion of the necessary contracts for the implementation of generated electricity and contracts for maintenance / support of operating equipment.
• Obtaining a decision of the state body (the Commission of NCER) at an individual set tariff for our company.
• Carrying out set of works for the preparation of project documentation
• Order for the manufacture / purchase of necessary equipment
• Installation and start-up works of the generator
• Installation and start-up works of the switching equipment complex
• Connection to distribution networks.
After the station is put into operation, a monthly income is expected in accordance with the current government-set prices (“green” tariff).
The main financial indicators.
The amount of necessary investment (up to 180 thousand EUR) is planned to be used for purchasing the necessary equipment, its installation, and start-up works. The remaining funds will be used to pay for the services of contractors for the preparation of projects, necessary permits, licenses, etc.
The monthly income of the station is expected from the current price of at least 89 thousand UAH, taking into account 1 scheduled day of downtime per month (the manufacturer guarantees 100% work time without downtime). The planned generation stoppage for 20 days a year is also taken into account. This period is considered in calculation. This information was taken on the basis of the analogy of the work of similar objects.
The first 11 months of work, income will be 36 thousand more due to the fact that there will be no VAT obligations due to accounting for previously acquired fixed assets.
Accounting profit is planned to be 52 thousand UAH. Current costs for regulatory measures, salaries and other expenses will be up to 45 thousand UAH.
The table provides calculation of the main financial indicators.
The beginning of return of investments is supposed monthly, from the first month of operation of the station.
After the return of investments, the profitability of the power plant is estimated at 25% per annum (1 million UAH of net profit per year), followed by a decrease in yield to 18-22% due to the planned tariff change by the state.
The Green Tariff is now 0,17448 Euro / KWh, is valid till 2030.
Key success factors for the project
• There are agreements with local authorities on specific areas of terrain where it is possible to locate a hydroelectric power station with minimal initial and subsequent costs. There is an interest of other energy- authorities in promoting the project.
• Selected areas of the locality allow you to establish stations without changing geography – without a significant rise in the water level, and as a consequence without conflicts with the local residents. Natural features of the terrain are used.
• The selected capacity of the station and the domestic manufacturer allows to agree the maximum possible tariff for the sale of electricity.
• Equipment manufacturer: it is possible to use two or three domestic producers with approximately the same technical and economic indicators of hydroelectric power stations. And with approximately the same price. The equipment supplier will be definitively determined after the start of the project.
• Documents of permissive and regulatory nature will be made during the manufacture of equipment (hydroelectric power). Preparation of all permits will not require additional time beyond this.
• The tariff for the purchase of electricity by the state is set in proportion to the EURO rate and changes approximately quarterly by the Commission.
Possible forms of cooperation
Joint business with the definition of shares in profits. Before the return of investment, you can determine the investor share more than after the return of investment.
Prospect of the project development:
It is possible to create a network of hydroelectric power stations. The total investment in the already pre-estimated location of the station is 2.5 – 3 million EUR for all stations. The yield is at the level of 22 – 25% per yaer, after the payment of VAT and income tax. Tax optimization is not taken into account here. Putting into operation one at a time, after starting each previous one.