D5.2 MANUAL ADDRESSED TO STAKEHOLDERS

WITH THE DESCRIPTION OF METHODOLOGIES TO

IMPROVE SHP IMPLEMENTATION IN SEE COUNTRIES

WORK PACKAGE 5 - COMMON STRATEGIES TO IMPROVE SHP IMPLEMENTATION

Final Version Date 31.12.2010

J. Alterach (RSE), B. Popa (POLI-B), R. Magureanu (POLI-B), S. Šantl (UL), D. Kozelj (UL), G. Rak (UL), A. Skroza (UL), F. Steinman (UL), G. Zenz (TUG),

G. Harb (TUG), I. Bostan (MOLD), V. Dulgheru (MOLD), V. Bostan (MOLD), A. Sochirean (MOLD)

- 2 -

INDEX

1. PREFACE........................................................................................................................................... - 5 -

2. INTRODUCTION (UL) ........................................................................................................................ - 5 -

3. LEGAL ASPECTS (UL)...................................................................................................................... - 7 -

3.1. BASIC PROCEDURE FOR HP IMPLEMENTATION ..................................................................................... - 7 - 3.2. CONDITIONS AND PROCESS FOR WATER CONCESSION GRANTING FOR HYDROPOWER WATER USE........... - 9 -

3.2.1. Spatial Planning ..................................................................................................................... - 11 - 3.2.2. Design and construction ........................................................................................................ - 12 -

3.3. DETAILED INTRODUCTION TO THE REGULATIONS ................................................................................ - 14 - 3.3.1. Waters Act (WA)..................................................................................................................... - 14 - 3.3.2. Environment protection act (EPA-1) ...................................................................................... - 17 - 3.3.3. Nature conservation act (NCA).............................................................................................. - 19 - 3.3.4. Freshwater fishery act (FFA).................................................................................................. - 19 - 3.3.5. Spatial planning act................................................................................................................ - 20 - 3.3.6. Construction act (ZGO-1)....................................................................................................... - 20 - 3.3.7. Act on physical assets of the state, regions and municipalities............................................. - 21 - 3.3.8. Energy act .............................................................................................................................. - 21 -

4. TECHNICAL ASPECTS (UL) ........................................................................................................... - 22 -

4.1. GENERAL ........................................................................................................................................ - 22 - 4.2. DESCRIPTION OF STRUCTURES AND FACILITIES.................................................................................. - 24 -

4.2.1. Structures and facilities for water intake and conveyance..................................................... - 24 - 4.2.2. Hydropower plant equipment................................................................................................. - 27 - 4.2.3. SHP operation /grid connection ............................................................................................. - 31 - 4.2.4. Investment costs in SHP implementation .............................................................................. - 31 -

4.3. CURRENT CONDITIONS IN THE FIELD OF WATER USE IN SHP ............................................................... - 32 - 4.4. HOW TO INCREASE THE EXISTING SCOPE OF ENERGY PRODUCED BY SHP........................................... - 34 -

4.4.1. New water rights granting – SHP concessions...................................................................... - 34 - 4.4.2. Reconstruction and optimization of the already-granted water potentials............................. - 35 -

5. ECONOMIC ASPECTS (UL) ............................................................................................................ - 36 -

5.1. INVESTMENT DOCUMENTATION.......................................................................................................... - 39 - 5.2. STIMULATION FOR INCREASE OF RENEWABLE ENERGY RESOURCES ELECTRICITY PRODUCTION........... - 43 - 5.3. INVESTMENT COSTS ESTIMATION....................................................................................................... - 47 - 5.4. MAIN PROBLEMS.............................................................................................................................. - 49 -

6. VAPIDRO-ASTE: INTEGRATED TOOL TO CALCULATE THE HYDROPOWER POTENTIAL (RSE) - 50 -

6.1. VAPIDRO-ASTE METHODOLOGY .................................................................................................... - 50 - 6.1.1. Available, natural and hydropower flow ................................................................................. - 50 - 6.1.2. Potential hydropower production calculation ......................................................................... - 54 - 6.1.3. Economic feasibility ............................................................................................................... - 54 -

7. GUIDELINES FOR THE PRODUCER OF ELECTRICITY FROM RENEWABLE ENERGY SOURCES (E-RES) (RO)............................................................................................................................................... - 56 -

7.1. REASONS FOR PROMOTING THE ELECTRICITY PRODUCED FROM RENEWABLE ENERGY SOURCES .......... - 56 - 7.2. NECESSARY STEPS FOR STARTING-UP A GENERATION CAPACITY BASED ON E-RES, TRADING THE E-RES

AND BENEFITTING FROM THE E-RES PROMOTION SYSTEM .............................................................................. - 56 - 7.3. REQUIRED DOCUMENTS IN ORDER TO START-UP AN E-RES GENERATION CAPACITY ............................. - 57 - 7.4. SELLING AND OBTAINING OF INCOMES FROM E-RES.......................................................................... - 58 - 7.5. THE E-RES PROMOTION SYSTEM IN ROMANIA .................................................................................. - 58 -

- 3 -

7.6. GREEN CERTIFICATES – OBTAINING AND SELLING ............................................................................... - 60 - 7.7. INSTITUTIONS INVOLVED AND RESPONSABILITIES................................................................................ - 60 - 7.8. OTHER USEFUL INFORMATION........................................................................................................... - 61 -

8. ALTERNATIVE SHP (TUG).............................................................................................................. - 65 -

8.1. HYDRODYNAMIC SCREW................................................................................................................... - 65 - 8.2. CASE STUDIES HYDRODYNAMIC SCREWS........................................................................................... - 66 - 8.3. DRINKING WATER PLANTS IN DRINKING WATER NETWORKS.................................................................. - 68 - 8.4. EXAMPLES OF DRINKING WATER PLANTS .......................................................................................... - 70 - 8.5. SHP IN COMBINATION WITH SNOWMAKING SYSTEMS (“BESCHNEIUNGSTEICHE”) .................................. - 73 -

9. NUMERICAL PROCEDURES FOR RIVER SYSTEM OPTIMIZATION........................................... - 73 -

9.1. CASE STUDY PÖLS .......................................................................................................................... - 74 -

10. METHODOLOGIES TO IMPROVE KINETIC TURBINES IMPLEMENTATION .............................. - 78 -

11. CONCLUSIONS ............................................................................................................................... - 84 -

12. REFERENCES ................................................................................................................................. - 85 -

Figure index FIGURE 1 – DEFINITION OF FEASIBLE SOLUTION SPACE CONSIDERING LEGAL, TECHNICAL AND

ECONOMIC ASPECTS OR BOUNDARY CONDITIONS ........................................................................................ - 6 - FIGURE 3 – BASIC PROCESS OF HYDROPOWER WATER USE IN SLOVENIA............................................................. - 9 - FIGURE 5 – SHP ON TORRENTIAL WATERCOURSES WITH RELATIVELY LOW FLOW AND HIGH HEAD ........................ - 23 - FIGURE 6 – SHP ON LOWLAND WATERCOURSES WITH HIGH FLOW AND LOW HEAD (RUN-OF SCHEME).................. - 23 - FIGURE 7 – SHP BUILT ON ARTIFICIAL CANALS – MILL STREAMS......................................................................... - 24 - FIGURE 8 – DROP INTAKE (“TYROLEAN” TYPE) ................................................................................................. - 25 - FIGURE 9 – LATERAL WATER INTAKE ................................................................................................................ - 26 - FIGURE 10 – SCHEMA OF COMBINED INTAKE SYSTEM WITHOUT ACCUMULATION ................................................. - 27 - FIGURE 11 – EXAMPLE OF CALCULATION OF GENERAL EFFICIENCY IN THE CASE BEFORE (UPPER TABLE) AND AFTER

RENOVATION (BOTTOM TABLE) OF EXISTING HPP ...................................................................................... - 28 - FIGURE 12 – TURBINES' TYPE FIELD OF APPLICATION (SOURCE: GUIDE ON HOW TO DEVELOP A SMALL HYDROPOWER

PLANT, ESHA) ....................................................................................................................................... - 29 - FIGURE 13 – TURBINE EFFICIENCY OF VARIOUS TURBINES BASED ON DISCHARGE RATE (SOURCE:

HTTP://WWW.ESRU.STRATH.AC.UK) .......................................................................................................... - 30 - FIGURE 14 – NUMBER OF CONCESSION GRANTING FOR HYDROPOWER WATER USE BY YEAR............................... - 32 - FIGURE 15 – SHARES OF ENERGY PRODUCED BY POWER PLANTS IN 2005 ........................................................ - 33 - FIGURE 16 – COMPARISON OF SHARES OF ENERGY PRODUCED BY POWER PLANTS IN 2005 ............................... - 33 - FIGURE 17 – ESTIR TURNKEY INVESTMENT COSTS FOR SMALL HYDRO ............................................................. - 36 - FIGURE 18 – LAND CADASTRE IN THE AREA OF PLANNED WATER INTAKE STRUCTURES AND FACILITIES FOR SHP.. - 37 - FIGURE 19 – MAIN PHASES OF THE PROJECT AND THEIR OVERLAPPING ............................................................. - 38 - FIGURE 20 – PROJECT PHASES IN INVESTMENT PROCESSES............................................................................. - 39 - FIGURE 21 – PARALLELISM AND INTERDEPENDENCE OF LEGAL, TECHNICAL AND ECONOMIC DOCUMENTATION

ACQUIRING OR ELABORATION WITH INCLUSION OF HYDROPOWER WATER USE ............................................. - 40 - FIGURE 22 – REDISTRIBUTION OF CONTRIBUTIONS (ECO-TAX) COLLECTED FROM CONSUMERS OF CONVENTIONAL

PRODUCED ENERGY TO RES PRODUCER TO COVER HIGHER ENERGY PRODUCTION COSTS.......................... - 44 - FIGURE 23 – RCE AND ITS STRUCTURE FOR HYDRO POWER PLANTS................................................................. - 47 - FIGURE 24 – ESTIMATED COSTS FOR WEIR, WATER INTAKE AND ENVIRONMENT REQUIREMENTS FOR STRATEGIC

PLANNING............................................................................................................................................... - 48 - FIGURE 25 – ESTIMATED COSTS FOR WEIR, WATER INTAKE AND ENVIRONMENT REQUIREMENTS .......................... - 49 - FIGURE 26 – ESTIMATED COSTS FOR WEIR, WATER INTAKE AND ENVIRONMENT REQUIREMENTS .......................... - 49 - FIGURE 27 – COMPUTATION/INTERPOLATION PROCESS TO CALCULATE THE HYDROPOWER WITHDRAWAL FLOW.... - 51 - FIGURE 28 – FLOW MEASURE CROSS SECTION AND UPSTREAM WITHDRAWAL/RESTITUTION SCHEME................... - 52 - FIGURE 29 – WATERCOURSE SCHEME WITH 3 FLOW MEASURE SECTIONS.......................................................... - 52 - FIGURE 30 – WITHDRAWAL SCHEME BETWEEN THE INTAKE AND RESTITUTION POINTS ........................................ - 53 - 

- 4 -

FIGURE 31 – SCHEME OF A HYDROPOWER SNAIL (RITZ-ATRO GMBH, 2010)...................................................... - 65 - FIGURE 32 – EFFICIENCY FACTOR FOR HYDRODYNAMIC SCREWS (RITZ-ATRO GMBH, 2010).............................. - 66 - FIGURE 33 – KINDBERG – HYDRODYNAMIC SCREW (LEFT), HYDRODYMANIC SCREW WITH FISH PASS (RIGHT)

(SONNWEBER, 2009) .............................................................................................................................. - 67 - FIGURE 34 – STRUCTURE WITH A HYDROPOWER SCREW – NIKLASDORF (SONNWEBER, 2009) ........................... - 67 - FIGURE 35 – DRINKING WATER SUPPLY SYSTEM (AREAM, LEV, OCEN, RHÔNALPÉNERGIE-ENVIRONMENT,1998).... -

69 - FIGURE 36 – DRINKING WATER PLANT MAUER (VIENNA) (KLEINWASSERKRAFT ÖSTERREICH, 2005 AND PAPP, 2008). -

71 - FIGURE 37 – SPRING AREA IN THE MÜHLDORFER DITCH (LEFT), 380KW DRINKING WATER TURBINE (RIGHT) (VERBUND,

2006) .................................................................................................................................................... - 72 - FIGURE 38 – DRINKING WATER PLANT, PELTON-TURBINE (ZWHS, 2010) .......................................................... - 72 - FIGURE 39 – MAP OF THE PROJECT AREA WITH THE 12 SMALL HYDRO POWER STATIONS..................................... - 74 - FIGURE 40 – TYPICAL SHPS IN THE PROJECT AREA ......................................................................................... - 75 - FIGURE 41 – THREEDIMENSIONAL VIEW OF THE WEIR KATZLING IN THE NUMERICAL SOFTWARE HEC-RAS.......... - 76 - FIGURE 42 – OPTIMIZATION OF A FLUSHING EVENT ........................................................................................... - 77 - FIGURE 43 – FLOATING MICRO HYDROELECTRIC POWER PLANT WITH WATER WHEEL .......................................... - 78 - 

Table index TABLE 1 – DIFFERENT STRATEGIES TO STIMULATE RES: SIZE CATEGORIES OF RES GENERATING PLANTS FOR RCE .. -

43 - TABLE 2 – DIFFERENT STRATEGIES TO STIMULATE RES.................................................................................... - 46 - TABLE 3 – INPUT DATA FOR DETERMINING RCE OF HYDRO POWER PLANTS ........................................................ - 46 - TABLE 4 – GUARANTEED PURCHASE AND PREMIUMS FOR DIFFERENT SIZES OF SHP (YEAR 2010) ...................... - 47 - TABLE 5 – FACTS OF THE HYDRODYNAMIC SCREWS (JOHANNA SONNWEBER, 2009) .......................................... - 68 -

- 5 -

1. Preface

The present work is an outcome of the project “SEE HYDROPOWER, targeted to improve water resource management for a growing renewable energy production”, in the frame of the South-East-Europe Transnational Cooperation Programme, co-funded by the European Regional Development Fund (www.seehydropower.eu).

The project is based on the European Directive on the promotion of Electricity from Renewable Energy Sources respect to the Kyoto protocol targets, that aims to establish an overall binding target of 20% share of renewable energy sources in energy consumption to be achieved by each Member State, as well as binding national targets by 2020 in line with the overall EU target of 20%. Objectives of the SEE HYDROPOWER deal with the promotion of hydro energy production in SEE countries, by the optimization of water resource exploitation, in a compatible way with other water users following environmental friendly approaches. Therefore, it gives a strong contribution to the integration between the Water Frame and the RES-e Directives.

Main activities of the project concerns the definition of policies, methodologies and tools for a better water & hydropower planning and management; the establishment of common criteria for preserving water bodies; to assess strategies to improve hydropower implementation, such as small hydropower; testing studies in pilot catchments of partner countries; promotion and dissemination of project outcomes among target groups all over the SEE Region countries.

In particular, here is presented report D5.2 - Manual addressed to stakeholders with the description of methodologies to improve SHP implementation in SEE countries, which is part of the Work Package 5 - Common strategies to improve SHP implementation – remaining hydropower assessment, site public database, methods for improving SHP implementation and cost-benefit analysis.

2. Introduction (UL) Hydropower implementation as all other investments is governed by different terms or conditions, the interconnection of which defines the space of feasible solutions, which meet all criteria and terms. Roughly, the conditions can be divided into three areas: Legal, Technical and Economic conditions (or terms or aspects) (Figure 1). Legal conditions mainly define the “rules” which have to be considered in the entire process of investment implementation. It is the widest aspect since it includes all different social, environmental and other aspects and conditions the objectives of which are assured by regulations. In a certain way, legal conditions also define the other two conditions, since economy and technology are also regulated to prevent risk or abuses of stakeholders involved in the process of decision making, resources management, procurements etc.

- 6 -

Figure 1 – Definition of feasible solution space considering legal, technical and economic aspects or boundary conditions

The solution space of technical conditions is mostly defined by limitations in technologies, human capacities and expert knowledge and it can be described as a condition of what a human society is capable to produce, construct and manage on the basis of its technical or technological developmental phase. For the implementation of investments nowadays, beside a vision and good will, also financial resources - economic and financial aspect or conditions have to be considered. These terms define the viability of the investment through financial resources and welfare of a certain community or society. They can be called the fuel for a realistic technical idea to be implemented and become operational. In cases when a feasible solution cannot be determined (Figure 2) an increase of possible solution areas is necessary. For example, if subsidies for renewable energy producers are increased, this measure will increase positive solution space of economic conditions and provide space for feasible solutions. Of course, the Figure 2 is a simplification (it is drown for better imagination) and the measures to meet a feasible solution space must be considered carefully and comprehensively to prevent other anomalies to arise or to still assure meeting other objectives.

Economic aspects

Legal aspects

Technical aspect

Space of feasible solutions

- 7 -

Figure 2 – Increase of feasible solution space considering legal, technical and economic aspects or boundary conditions

In continuation, the mentioned aspect will be presented in more detail with a focus on Slovenian situation and current practice. At first, legal aspects with the presentation of the processes of hydropower implementation and main regulations will be described. One of the efficient approaches to improve hydropower implementation, to make it clearer for investment opportunities as well as for efficient supervision, is an establishment of a transparent information system of the existing and possible hydropower water use, which also simplifies decision making. For that reason, this report includes at its end a proposal of a framework of efficient geographic information system.

3. Legal aspects (UL)

3.1. Basic procedure for HP implementation In the Republic of Slovenia water concession granting is regulated by Water Act and it is under the competency of Government, or more precisely, the administrative procedure is under competency of Ministry of the Environment and Spatial Planning (MESP).

By law the waters in Slovenia are defined as a public good, hence it follows that for water use which exceed general use (drinking, bathing, diving, ice skating, fire protection etc.) water right is needed, which can be obtained as water permit or water concession depending on the extent and commercial value of water use.

In accordance with the Water Act water permit for water use is obtained in the process of administrative procedure which starts with the application for acquiring water permit. For example, water permit can be obtained for:

private supply of drinking water or supply of drinking water provided as a commercial public service;

technological purposes;

Subsidiaries, efficient resources management, cost reduction, better enterprise approach etc.

Efficiency increase, new technologies, efficient water and sediment management, remote control technologies etc.

Amendments to regulations, improvement of administrative procedures, efficient supervision approach etc.

- 8 -

the activity of bathing areas and natural health spas pursuant to healthcare regulations; the extraction of heat; the irrigation of agricultural land or other areas; electricity network; propelling water mills, saws or similar installations; for cultivation of fresh water organisms if fresh water outtake or if fresh water pond area is

less then 0.5 km2; a port, if the investor is a person under public law; the provision of ski slopes with snow etc.

On the other hand, Water Concession has to be granted in the process of public tendering which usually starts with the private or public sector initiative. For example, water concession has to be acquired for:

the production of beverages; the needs of bathing areas and similar, if the use involves mineral, thermal or thermal

mineral water; the production of electricity in a hydroelectric power plant; a port, if the investor is a person under public law; the removal of alluvium, except for the provision of public services pursuant to this Act; the cultivation of sea water organisms or fresh water organisms if fresh water pond area

exceeds 0.5 km2.

It is important to stress that for obtaining the water right the relevant spatial planning act must regulate and allow the construction of all constructions and facilities which are needed for the planned water use. In the case of requiring a water permit, the investor must also have the right to build (land owning or agreement with the land owner for servitude right). As written above, hydro electricity production (for all capacities) in Slovenia requires Water Concession which is granted in the process of public tendering. Figure 3 shows the basic process of water use for hydropower in Slovenia including all important phases from Initiative to Electricity production and Supervision. The process usually starts with the initiative of interested parties and if the basic conditions which are checked by the Water Institute of Republic Slovenia (relevant Spatial Act, other environmental and water management objectives) can be considered, the MESP starts at this point the administrative process of the preparation of the decree proposal, which is sent to the Government for the adoption of the Decree.

- 9 -

Figure 3 – Basic process of hydropower water use in Slovenia

In the following paragraphs the process shown in the previous Figure is described in more detail, especially in regard to regulations and competencies. Also, the Paragraph 2.2 gives a more detailed description of the most relevant regulations.

3.2. Conditions and process for water concession granting for hydropower water use

Legislation:

Water Act1 with the following sub-legislation on the subject: Decree on criteria for determination and on the mode of monitoring and reporting of

ecologically acceptable flow2, Decree on provisional river basin management plan3, Decrees on the concession for the exploitation of certain river reach4.

Competent authority: Ministry for Environment and Spatial Planning (MESP). 1 Published in OG of RS, no. 67/02, 57/08. 2 Published in OG of RS , no. 97/09; Decree is an act which is adopted by the Government. 3 Published in OG of RS , no. 4/09. 4 Decrees are published in Official Gazettes of Republic of Slovenia. For the term Ecologically Acceptable flow in other countries of EU also terms as Minimum Instream Flow or Environmental Flow are in use.

Initiative for concession granting

- Overview of relevant Spatial Acts - Consideration of other environmental objectives (fresh water fishery, nature preservation …),

- Consideration of existing water rights - Water management objectives (erosion, flood management),

- Terrain research…

Process of concession granting

Water Institute of RS

Concession granting does not proceed

Government of RS adopts a Decree for concession granting

YES

NO

Is Concession granting

eligible?

Operation and electricity production

Design and construction

Supervision

- 10 -

Conditions to start the process of concession granting: The result of River Basin Management Plan (RBMP)5 must base upon the quantity and

quality of water and sediments because the hydropower use of water in the concerned water body and adjacent area should be allowed only where also the principle of sustainable water use is already applied or considered,

Since the construction of HP (also SHP) requires a building permit, the condition to start the process of concession granting is also adopted by Spatial Planning Document (paragraph 2.1.2) which defines and regulates hydropower land use (terms and conditions for design and construction of structures and facilities of HHP) in the respective area or river reach.

In this phase (or in more detail lately in the phase of concession granting) main limitations and conditions are defined, especially Ecologically Acceptable Flow (EAF or MIF), which is determined according to the Decree. The value of MIF can be increased if objectives which arise from the Freshwater Fishery Act6 or Nature Conservation Act7 are not reached by MIF determination according to the Decree.

Concession granting process: The process usually starts with the initiative of interested parties (investors, local

communities) to the MESP, Control of the above-mentioned conditions8, Administrative procedure of the preparation of the proposal of the Decree by the MESP

(usually for several locations at once), Adoption of the Decree on concession granting of certain river reach 9 by the

Government Procurement for concession granting (the MESP or Environmental Agency of RS – EARS

as body under the MESP) (next Figure), Signature of Concession contract10 with awarded bidder (EARS).

5 Preparation of the RBMP is the implementation process of the WFD, where competent authority is the MESP. Slovenia has decided to adopt two RBMPs (one for the catchment of Danube basin, the other for river catchments of the Adriatic Sea). The elaboration of the RBMPs is in the phase of proposal, which is currently announced on the web pages of the Ministry of the Environment and Spatial Planning for public participation. The RBMPs will be adopted by the Government. 6 Published in OG of RS no. 61/2006 7 Published in OG of RS, no. 96/04 8 Although the conditions from RBMP and Spatial planning document allow hydropower use, the government still has a right not to start with the process of concession granting. The reasons for that are mainly national strategic issues. 9 Decree defines the influential area, ecologically acceptable flow, different spatial, ecological and technical terms, competencies in the process of public procurement, criteria for the evaluation of bids (offered concession fee over defined threshold, land owning, quality of basic design, financial ability of the bidder etc.), duration of concession, minimum concession fee, etc.. 10 Contract defines the river reach of concession, obligations of assuring ecologically acceptable flow, concession payment, duration of concession, dead line to start the production of electricity and other rights and obligations already defined in the Decree. Contract is usually signed for a period of 30 years.

- 11 -

Figure 4 – Procurement process for concession granting

3.2.1. Spatial Planning Legislation: Spatial Planning Act11 Competent authorities:

State (Ministry for Environment and Spatial Planning) -> National spatial planning document,

Municipality -> Municipal spatial planning document or in the case of involvement of several municipalities -> Inter-municipal spatial document.

Main Directives and Conditions which have to be considered for hydropower land use in the process of spatial planning:

Harmonization with directives and conditions of decision making stakeholders: Environment (nature preservation, water management, environment protection), Agriculture and Forestry (irrigation, ...), Riparian (Land owners), Existing water right holders, Other competent authorities (transport, tourism, ...), Elaboration of Comprehensive Environment Impact Assessment (CEIA) if reservoir of

HP exceeds 10000 m3 or installed power is more than 1 MW (regulated by The Environment Protection Act12 ) or planning area is situated in nature conservation protected area (regulated by Nature Conservation Act),

Acquirement of Energy Permit if installed power of HP is more than 1 MW and it is connected to the energetic network (regulated by Energy Act13).

11 Published in OG of RS, no. 33/07, 108/09. 12 Published in OG of RS, no. 41/04, 39/06, 20/06, 70/08 and 108/09. 13 Published in OG of RS, no. 79/1999 (EZ), 26/2005 in 27/2007 (EZ-UPB2).

Elaboration of Terms of reference and announcement of tender in the Official Gazette

Evaluation of submitted bids

Signature of Concession Contract

Formation of Expert Commission at the Agency for the Environment

Adoption of Decision on selected Concessionaire

Adoption of a Decree for concession granting

Preparation of Concession Contract at the Agency for the Environment

- 12 -

Strategic Support Acts

To harmonize the decisions stakeholders in the process of spatial planning, the following strategic documents are planned to be elaborated and adopted by the Government:

Mentioned RBMP, currently in the phase of public consultation, Resolution on the National Energy Programme14 -> National Action Plan for use of RES15

3.2.2. Design and construction Legislation:

Construction Act16 with most relevant sub-legislation on the subject17: Regulation on classification of construction with regard to their complexity18, Rules on design documentation19, Rules on construction sites20. The Environment Protection Act in the field of Environment Impact Assessment (EIA), Decree on the categories of activities for which an environmental impact assessment

is mandatory21. Hydropower plant is defined as a complex or in the case of the smallest HPP a less complex construction for which a building permit is required. The building permit is decreed by regional Administrative units which are under the Ministry of Public administration. Basic requirements for building permit acquisition:

project and technical documentation has to be elaborated according to the above mentioned Rules,

obligatory Revision (done by licensed Engineers) of relevant technical and project documentation if construction is defined as complex construction. Basic condition for definition of complex object:

if EIA is required (reservoir of HP exceeds 10000 m3 or installed power is more than 1 MW),

for power lines more than 110 kV of voltage, for dams or weirs more than 10 m of height or with crest longer than 250 m in the case of

earth dam or 50 m in the case of concrete dam or 300 m in the case of weir, for constructions and objects with deep foundations, All Consents which are defined in terms of elaboration of documentation for acquisition the

building permit are basically already defined in relevant spatial planning document. Contents are decreed by competent sector authorities (for example Water content is decreed by EARS).

14 Adoption by Parliament is planned at the end of 2010. Implementation of the RES Directive is under competency of Ministry of the Economy. 15 Adoption by the Government is planned in 2011 16 Published in OG of RS, no. 27/2007, 70/2008. In June 2010 next amendment is predicted. 17 Design and construction legislation is a large area (competencies and requirements for elaboration, revision, construction, supervision; types of technical and project documentation; requirements for using of objects etc.) and it is not separately defined for hydropower. 18 Published in OG of RS, no. 37/08, 99/08 19 Published in OG of RS, no. 55/08 20 Published in OG of RS, no. 55/08, 54/09 21 Published in OG of RS, no. 78/06, 72/07, 32/09

- 13 -

Construction: Construction has to take into account:

The above-mentioned Rules on construction sites which define marking and management of construction site, content and mode of work progress reporting and construction control. It is also more precisely defined in the Project for Building Permit requirement,

Legislation in the field of safety, Assurance of the supervision

Start of operation: After the construction, technical inspection is performed, which is required in order to obtain the Permit of use as a written order decreed by regional administrative unit. The following documentation regulated by the above-mentioned construction legislation is required:

The project of works executed, The land surveying plan of the new situation, of the land after the completion of

construction, Evidence of the reliability of the structure, Guidelines for the maintenance and operation of the structure.

The Building Permit (terms of the consents) can also require the Operational monitoring22 for certain monitoring parameters for all or some time of the operation of Plants. In that case, before the Permit of use is decreed, also Test operation has to be carried out.

3.2.3. Operation and electricity production Legislation:

Energy Act23 with the following sub-legislation on the subject: Decree on the requirements to be met for obtaining the status of a qualified

electricity producer24, Regulation on supports for the electricity generated from renewable energy

sources25 Decision laying down fee to assure support to production of electricity from

cogeneration with high efficiency and from renewable sources26 Methodology for Determining Reference Costs of Electricity Generated from

Renewable Resources27 Competent authority: Ministry of the Economy 22 For structures and facilities, where different environmental parameters have to be monitored (emission of waste water, air pollutants etc.), Operational monitoring has to be carried out. Requirements for operational monitoring are regulated by different sub-legislation mainly in the field of environment protection. For example “Decree on criteria for determination and on the mode of monitoring and reporting of ecologically acceptable flow” requires operational monitoring of ecologically acceptable flow for certain water uses, one of them is also hydropower water use. 23 Published in OG of RS, no. 27/2007, 70/2008. In June 2010 next amendment is predicted. 24 Published in OG of RS, no. 71/07 25 Published in OG of RS, no. 37/09, 53/09, 68/09, 76/09 26 Published in OG of RS, no.113/09 27 Adopted by the Ministry of the Economy in 2009

- 14 -

3.2.4. Supervision Legislation:

Water Act with next sub-legislation on the subject: Decree on the water fee Decrees on the concession for the exploitation of certain river reach

Competent authorities: Ministry for Environment and Spatial Planning, Environmental Agency of RS and Inspectorate of the RS for Environment and Spatial Planning Although the Guidelines for the maintenance and operation of the structure have to be elaborated for complex structures and facilities (as mentioned in the case of HPP that applies to structures with reservoirs exceeding 10000 m3 or installed power more than 1MW) the water right owner must elaborate Rules for the operation and maintenance for water structures or facilities (defined by Water Act)28 The paying of Concession Fee and Water Fee is financed by the Water Fund (by Water Act) which is a financial fund for water-management-related purposes. Concession Fee is shared (usually 50:50 – defined in the Decree on concession granting) between the Water Fund and the budget of the related municipality. The Concession can be withdrawn if terms in the Concession Contract are not met (if use permit is not obtained in defined time, requirements about ecologically acceptable flow are not fulfilled, no electricity production for longer period etc.). It has to be stressed that with new RES support scheme (more precise with the Regulation on supports for the electricity generated from renewable energy sources, mentioned under paragraph 2.1.3) subsidies for hydropower plants which do not fulfil obligations on Ecologically Acceptable Flow will not be granted or paid to hydropower electricity producers. In continuation relevant legislation and regulations are presented in more detail.

3.3. Detailed introduction to the regulations

3.3.1. Waters Act29 (WA) In the Republic of Slovenia, the use of water that exceeds general use, the use of debris or groundwater require the acquisition of water rights on the basis of a water permit or water concession in accordance with the Waters Act (Official Gazette of the Republic of Slovenia, No. 67/02, 110/02–ZGO-1, 2/04–ZZdrI-A, 41/04–ZVO-1 and 57/08; in continuation WA).

28 The content is defined by internal rules, prepared at the EARS 29 Waters Act (OG of RS, no. 67/02, 110/02 - ZGO-1, 2/04, 10/2004)

- 15 -

The article 136 of the WA states that the use of water for the generation of electricity in a hydroelectric power plant requires concession. The article 136 of the WA states that the use of water for the generation of electricity in a hydroelectric power plant requires concession.

The concession can be granted to physical or legal entities meeting all the required terms. The concession is granted for a limited time and not exceeding 50 years and can be extended upon the owner’s application provided all the terms for its acquisition are fulfilled at the time of its termination.

The terms of concession granting are defined by the concession act that can be issued in accordance with the article 137 of the WA on the basis of the law on concession in the area of natural goods when the plan of water management ensures that the quality and quantity of the water or debris allow the indented use which in turn is in accordance with the principle of sustainable water use. The concession act is issued in accordance with the terms and conditions defined by governmental regulations and water management plans. When the use of water requires the acquisition of a permit for land use in accordance with the regulations on spatial planning and construction of facilities, the concession act is based also on the spatial acts of the state or local community.

Legal or physical entities can submit to the government a proposal for issuing a concession act for use based on the first paragraph of the article 136 of the WA. The proposal for issuing a concession act must include all the elements necessary for defining the contents of the concession act, primarily the area of concession, the type, the scope and the length of use. Within three months from the receipt of the proposal, the government informs the proposing party whether the granting procedures will commence.

The concession is granted by the government on behalf of the Republic of Slovenia in accordance with the provisions of the WA. The concession is granted with an act on selection on the basis of a public tender. To extend the length or to increase the scope of concession, the concession is granted to the existing holder without public tender when the conditions remain unchanged and when the concession holder meets all the required conditions.

Another article to be considered is article 150 of the Water Act which defines that any land use with possible temporary or permanent influence on the water regime or water state can only be implemented on the basis of a water consent. Such interventions include the use of water for the generation of electricity.

Decree on criteria for determination and on the mode of monitoring and reporting of ecologically acceptable flow 30

The third paragraph of the Article 71 of the WA states that the government of the Republic of Slovenia defines the criteria for determination of the ecologically acceptable floe (Qes) and the manner of its monitoring and reporting. The Article 90 of the Act amending Waters Act (OG of RS, No 57/08) state s that the granted water rights need to be adjusted to the amended Article 71 within five years from adoption of this decree.

30 Decree on criteria for determination and on the mode of monitoring and reporting of ecologically acceptable flow (OG of RS, no. 97/09)

- 16 -

The decree defines the starting points and criteria for defining the Qes. The starting points for defining Qes are the data on the medium small flows (sQnp) and medium flows (sQs) in the area of special use. sQs and sQnp are defined by the Environmental Agency of the Republic of Slovenia on the basis of data from the state hydrological monitoring or when those are not available on the basis of measurements. The measurements are provided by the initiator or the owner of the water right.

Qes is calculated with equations in regard to the correlation of the data on Qes identified in the previous years with the data on the medium small and medium flows in the area of special use. The equations vary in regard to the relation between sQnp and sQs, relation between both, the length and the quantity of intake and the returnability of the intake. Qes, defined by equation, is checked additionally in special cases and can be decreased or increased when required by specific conditions in the area of special use. Special cases are thus defined for special used of water for drinking water provision, for special water use on protected or conserved areas and for special use in the areas with emissions of substances permitted in accordance with environmental regulations.

The granted water rights, which need to be adjusted within five years to the terms of the decree in accordance with the Act amending Waters Act, have specific criteria for Qes definition which take into account the actual conditions in individual water rights.

The decree defines the criteria for Qes monitoring and it prioritizes the obligatory design of intake structures in a manner that prevents water intake when the water flow in the area of special use is falls below Qes. When such design of intake facilities is not possible it is necessary to monitor the relevant parameters to ensure the control of Qes. The decree defines the parameters to be measured for such purpose.

The decree defines the manner of reporting data on Qes required by competent authority for water management or competent inspectorate as well as the control of the ensuring and monitoring of Qes.

Decree on provisional river basin management plan3

31

The decree is the basis for a provisional plan of water management defining the necessary foundation for implementing individual tasks of water management and preparing detailed plans of water management. The provisional plan is regarded as the environmental starting point in the area of water management in accordance with environmental regulations.

The goals of the provisional plan ensure the implementation of tasks for transferring to the new system of planning and implementing water management in the areas of the Danube and the Adriatic Sea.

Provisional plan goals:

1. Adjustment of database or appropriate connections between databases to prepare and implement water management,

2. Establishing a system of a combined approach to the control of point and diffuse sources of pollution,

3. Establishing the public relations system,

31 Decree on provisional river basin management plan (Official Gazette RS, No. 4/09)

- 17 -

4. Definition of the environmental standards of chemical and ecological state of the water bodies in surface waters,

5. Definition of the environmental standards of quality for the chemical state of groundwater,

6. Definition of the parameters and criteria for the assessment of the quantity of the water bodies of groundwater,

7. Establishing Water Book and Water Cadastre,

8. Preparation of a program for a precise planning of flood evaluation and management,

9. Preparation of methodologies for the analyses of costs and benefits and assessment of cost efficiency of the programs of interventions,

10. Management of databases on chemical and ecological states of water bodies of surface water and chemical and quantity state of water bodies of groundwater on the basis of monitoring the state of surface and groundwater,

11. Establishing and managing the records of emission, discharge and leakage of priority substances and priority hazardous substances and other water pollutants,

12. Management of database of production monitoring in accordance with regulations governing the emission of substances in discharge of water, for inserting into inventories of emissions, releases and losses of priority substances and priority hazardous substances into water

13. Reviewing and updating the description of water bodies of surface and groundwater in the articles 2 and 3 of the decree, especially the definition of the severely transformed water bodies of surface water,

14. Reviewing and updating the economic assessment of the use of water or debris in the article 13 of the decree,

15. Reviewing and updating the demonstration of impact and influence of human activities on the state of the surface and groundwater in articles 4 and 7 of the decree,

16. Evaluation of probability of reaching the environmental goals by 2010 for water bodies of surface and groundwater in regard to the expected trends of the individual types of water use and water impacts and in regard to the expected efficiency of the interventions of operative programs in accordance with environmental regulations,

17. Updating the scheme of areas with special requirements in article 8 of the decree and

18. Updating the scheme of network and results of monitoring of surface and groundwater in articles 9 and 10 of the decree.

The objectives must be reached at the latest by the adoption of the first plan on water management in the water area of the Danube (also River Basin Management Plan for Danube Basin) and the first plan on water management in the water area of the Adriatic Sea (also River Basin Management Plan for Adriatic Sea) in accordance with water regulations.

3.3.2. Environment protection act32 (EPA-1) As defined by the article 164 of the Environment protection act the state or the municipality can sell the concession for managing, using or exploiting natural goods on its property or under its legal 32 Environemnt protection act (OG of RS, no. 41/04, 17/06)

- 18 -

authority of managing to a legal or physical entity (in continuation: concession holder) if the latter is qualified for the implementation. When the concession for natural goods is granted by the state, a part of the payment for the concession is allocated to the municipality where the concession is implemented or is influenced by it, the ratio of which is defined in cooperation with the municipality in the concession act on the basis of the identified level of development of the infrastructure and impact on the environment. The criteria for defining the level of the development of infrastructure and environmental impact are defined by the government. The concession for natural goods can be granted if all environmental terms for dealt activities in the environment defined by this act or other acts on the protection and use of natural goods are met. The concession can be granted only on the basis of a public tender unless defined differently by law. In the acquisition of concession based on a public tender the right to priority can be exercised. The priority to be granted the concession is given to owners of land where the natural good is located if the owner meets all the terms in the first paragraph of the article defining the qualifications for implementing the concession.

In accordance with article 165 of the Environment protection act the basis for granting the concession is a concession act, which is governmental or municipal regulation. The concession act primarily includes:

1. Definition of the natural good for which the concession is granted,

2. The object of concession and the definition of the range and possible exclusiveness of the concession,

3. Definition of environmental terms, terms of protection regime and management regime, use or exploitation of the natural good,

4. The activity that can be implemented by the concession holder in regard to the rights related to the concession,

5. Conditions to be met by the concession holder,

6. Possible public authority of the concession holder,

7. Starting and terminating date of the concession,

8. Area of the concession,

9. Payment for the concession and the ratios of the state and the municipality,

10. Authorization for supervision of the concession implementation,

11. Reasons for and the manner of terminating the concession,

12. Obligations of the concession holder in regard to repairing, restoring previous or establishing new environmental conditions, and

13. Authorization for and conditions of drawing and validating the concession contract.

Acquisition and selection of concession holders, public tenders, all concession contract issues, protection of concession holders and dispute resolution, termination of concession, transfer of concession, obligatory concession, force majeure and responsibility of concession holder for the acts of the employees are reasonably governed by the act defining concession for public utilities33 unless stated otherwise by the law.

33 Public utilities act (OG of RS, 32/93, 30/98)

- 19 -

3.3.3. Nature conservation act34 (NCA) Anyone intervening with nature or habitats of plant or animal populations must use manners, methods and technical aids contributing to maintaining favorable condition of the species. The minister in charge of nature protection in agreement with the minister in charge of plant or animal species or habitats of their populations can define the least disturbing manner and conditions of intervening with nature as well as set a time limit for interventions into the habitats of animal populations at the time of their critical life periods.

Natural values include all natural heritage in the area of the Republic of Slovenia. Natural values include beside rare, valuable or prominent natural phenomena also other valuable phenomena, contents or parts of nature, a natural area or a part of a natural area, an ecosystem, landscape or designed nature. Natural values are mostly geological phenomena, mineral, fossils and their sites, surface and underground karst phenomena, caves, gorges and ravines and other geomorphologic phenomena, glaciers and forms of glacier activity, water sources, waterfalls, rapids, lakes, marshes, streams and rivers with banks, sea coast, animal and plant species, their exceptional specimens and their habitats, ecosystems, landscape and designed nature.

A special area of conservation (area Natura 2000) is ecologically important area which in the EU aims at preserving or reaching a favorable condition of birds and other animal and plant species, their habitats and types of habitats. Special conservation areas are a part of the European ecological network Natura 2000.

The article 44 of NCA defines that the general use of natural resources or natural public good which is at the same time a natural value can only be performed in a manner which does not endanger the existence of the natural value and does not prevent its protection. Conservational and developmental guidelines as well as conservational regimes of natural values are an integral part of permits or concessions for special use. The permit for special use or a concession act which is not in accordance with the preceding paragraph is invalid.

3.3.4. Freshwater fishery act35 (FFA) The FFA among other governs the area of natural resources, namely waters. Its article 19 defines that each intervention into a fishery area needs to be planned and implemented in a manner that to the greatest extent possible ensures protection of fish, the variety of species, age structure and number. The construction of facilities on water areas in accordance with regulations on building can be implemented upon preliminary acquisition of an agreement issued by the Fisheries Research Institute of Slovenia (the Institute). For the purpose of migration of fish through facilities build on waters, the investor must provide a fish passage. The functionality of the passage is ensured by the owner or the tenant of the facility. The Institute in cooperation with the implementer of fishery management issues an opinion on the influence of the intervention on the condition of fish within the procedure of water right granting in accordance with the regulations on waters.

34 Nature conservation act (OG of RS 56/99, 31/00 - correction) 35 Freshwater fishery act (OG of RS, št. 61/06)

- 20 -

3.3.5. Spatial planning act36 Spatial management is governed by spatial plans. The spatial plans define guidelines on land use, the types of possible land use and the conditions and criteria for their implementation. There are state, municipal and inter-municipal spatial plans.

The spatial plans governed by the Spatial planning act, except for state strategic spatial plan, are adopted upon comprehensive evaluation of the influence on the environment in accordance with the definitions of this act and the environment protection act and with no requirement of the revision of the environmental report.

Municipal spatial plan, with consideration of the state spatial acts guideline, the developmental needs of the municipality and protection requirements, defines the goals and the starting points of the development of the municipality, defines the local spatial plans and the terms of integrating facilities into space. Municipal spatial plan includes strategic and implementing parts.

The implementing part of the municipal spatial plan of individual units of spatial planning defines:

1. Areas of intended use of space;

2. Conditions of implementation;

3. Areas for which a detailed municipal spatial plan is prepared.

The municipal spatial plan serves as the basis for preparing the project for acquisition of the building permit in accordance with building regulations (article 39).

3.3.6. Construction act37 (ZGO-1) The act defines the conditions for building any type of construction, defines the essential requirements and their fulfillment in regard to the characteristics of the construction. Building permit is a decision with which the competent authority allows building and defines actual conditions to be considered during building.

Once a construction is built, a permit of use needs to be obtained, with which the same authority that issued the building permit, now allows the start of use of the construction on the basis of technical inspection.

Constructions are classified according to the complexity of construction and maintenance into complex, less complex, non-complex and simple. A governmental regulation38 specifically defines the types of construction with regard to their complexity. The largest size of simple construction is defined as well as the method of its building and use and other conditions that need to be met for a construction to be classified as simple, as well as regular maintenance and investment maintenance activities, unless stated otherwise by the law.

36 Spatial planning act (OG of RS, 33/2007, 70/2008 and 108/2009) 37 Construction Act (OG of RS, no. 110/2002, 97/2003) 38 Regulation on classification of construction with regard to their complexity (OG of RS, no. 37/08 in 99/08)

- 21 -

Rules on design documentation39

The rules define detailed contents of design documentation for complex and less complex constructions, the building method and the types of plans that are part of the documentation and are used for individual types of buildings and facilities in regard to their use, form and contents of the revision report as well as the contents of the report on the indented building activity.

3.3.7. Act on physical assets of the state, regions and municipalities40 Since a large number of watercourses is situated in the water region owned by the Republic of Slovenia, construction of facilities requires the acquisition of property right, such as servitude right or right to built and consideration of Law of Property Code, the Act of physical assets of the state, regions and municipalities and the decree41 passed on its basis.

3.3.8. Energy act The law defines the principles of energy policies, rules for the activities on the energy market, the manners and forms of implementing economic public services in the field of energy, the principles of reliable provision and efficient use of energy and conditions for operation of facilities, conditions for performing services in the field of energy, granting of licenses and energy permits and the authorities in charge of administrative tasks governed by this law.

Regulation on issuing of the Declarations for the production units and of the Guaranties of Origin 42

The regulation defines the conditions and procedure for obtaining declaration for production units that generate electricity from renewable sources and in co-production with high efficiency, the contents and the manner of managing the register of declarations for production units, monitoring of production units with declaration, issuing of guaranties of origin of electricity generated from renewable sources or in co-production with high efficiency , management of register of guaranties of origin, transaction of guaranties of origin, data transfer for the issuing of the guaranties of origin, in accordance with definition of the first, second and third parts of the Article 5 of the Directive 2001/77/ES of the European Parliament and Council from September 27, 2001 on promotion of production of electricity from renewable sources in domestic trade in electricity (OG of RS, No. 283 date 27/10/2001, page 50; and the first, second, third and fifth parts of the Article 5 of the Directive 2004/8/ES of the European Parliament and Council from 11th February 2004 on the promotion of cogeneration based on a useful heat demand in the internal energy market and amending Directive 92/42/EEC (OG of RS, No. 52 dated 21/2/2004, page 33;).

The declarations are issued for production units that use renewable sources as their intake energy and hydroplants are thus included under such type of production units.

39 Rules on design documentation (OG of RS, no. 55/08) 40 Act on physical assets of the state, regions and municipalities (OG of RS, no. 14/07) 41 Decree on physical assets of the state, regions and municipalities (OG of RS, no. 84/07) 42 Regulation on issuing of the Declarations for the production units and of the Guaranties of Origin (OG of RS, no. 8/09)

- 22 -

4. Technical aspects (UL)

4.1. General Hydroelectric power plant is a complex of structures and facilities that provide water use to generate electricity. The activity of hydroelectric power plant is based on the use of flowing water. In conventional hydropower plants, a dam is built on a river and water is stored in a reservoir from which then the flowing water can be constantly directed. The water then turns a turbine which in turn propels an electrical generator. The produced electricity is turned to high voltage suitable for transmission. The primary energy (water flow) varies considerably in time, across the seasons and years. The potential energy of water can be transformed into useful forms due to its movement which results from gravitation. The quantity of the produced energy depends on the quantity of water as well as on the head. The expected quantity of energy to be produced can be defined on the basis of the head and the water flow. For that reason, the optimal areas for hydropower facilities are those with high head or large flow (possibly both). Heads of over 1.700m are used in practice. Also, rivers with enormous flows are used such as Itaipú at the border between Brazil and Paraguay which reaches up to around 12.000 m3/s of the total flow. The definition criteria for small hydro plants (SHP) vary around the world. They range from the generating capacity of up to 1 MW to 5 -10 MW or even up to 50 MW. The European Union generally defines SHP as those with the capacity of up to 10 MW and accepts the IEC technical guidelines for the installed capacity of individual SHP aggregate of up to 5 MW. In Slovenia, three characteristic types of SHP can be defined according to watercourse typology and geographic position:

- SHP on torrential watercourses with relatively low flow and high head (figure 5) - SHP on lowland watercourses with high flow and low head (figure 6) - SHP built on artificial canals – mill streams (figure 7).

- 23 -

Figure 5 – SHP on torrential watercourses with relatively low flow and high head

Figure 6 – SHP on lowland watercourses with high flow and low head (run-of scheme)

- 24 -

Figure 7 – SHP built on artificial canals – mill streams

Regardless of the type, each SHP consist of structures and facilities for water intake and conveyance, facilities and equipment for water kinetic energy conversion to electricity, facilities for hydropower plant operational management, facilities for electricity transportation and structures for returning water back to the river. Technical design of SHP in different conditions (terrain, hydrology, capacity and operation terms) which has to assure environment perspective on one side and energy production on the other side can vary from case to case. SHP must be designed to fulfill its purpose optimally under given conditions.

4.2. Description of structures and facilities

4.2.1. Structures and facilities for water intake and conveyance Structures and facilities for water conveyance include structures for water intake, treatment facilities, channels, tunnels, penstocks with all necessary gates, valves and trash racks. Water intake structures include all structures which assure adequate amounts of water for hydropower production. Since these structures are designed directly in water courses their design must be unconditionally subject to the conditions set to the designer of the SHP by the competent authority for water management. The basic structure of water intake is always a dam which stabilizes the water flow and thus decreases its destructive power at extremely high flood discharges. It also provides a constant water level for water divertion to the conveyance system. The components of water intake include: dam or weir, intake structure with rough trash rack intake

- 25 -

gate, sand trap with flush gate and spillway, and flush channel to return the sediments into the stream, fine trash rack in front of the conveyance channel or tunnel and intake toconveynce channel or tunnel. The water intake structures are adjusted to the terrain and the characteristics of the watercourse. Usually the intake structures are positioned as close as possible to the dam and the water channel to ensure the shortest possible discharge of sediments and water to the main river channel. The design of the intake structure must ensure ecologically acceptable flow (or Environmental flow) and migration of water organisms along the watercourse (fish passes). At the same time, the dam structure must ensure adequate stability in cases of high flood discharges as well as enable the flow of water, debris and sediments (flood safety). There are two basic types of intake: drop intake (“Tyrolean” type) (figure 8) and lateral intake (figure 9).

Figure 8 – Drop intake (“Tyrolean” type)

1 – drop intake with trashrack, 2 – weir with fixed crest, 3 – sand trap channel, 4 – sand trap, 5 – sand trap flush channel with gates, 6 – fine trashrack for conveyance tunnel and penstock,

7 - penstock, 8 – sand trap safety overflow, 9 – water level gauge shaft, 10 – stilling basin, 11 - trashrack, 12 – pressure sustain chamber

- 26 -

Figure 9 – Lateral water intake

1 – lateral intake with trashrack, 2 – weir with fixed crest, 3 – channel or tunnel to the sediment trap, 4 –

separation wall between main channel and water intake, 5 –stilling basin, 6 – flush gates

Conveyance structures convey water from the intake to the powerhouse. There are free surface and under pressure coveyance structure depending on the manner of conveyance. The free surface conveyance are channels, tunnels or pipelines, the conveyance under pressure can be tunnels or pipelines. In high dams or higher reservoir capacities the entire conveyance system is usually under pressure (head scheme with penstock), and with low dams or shallow accumlation where surface changes are relatively low ofren one part of the conveyance is free surface and another is under pressure (figure 10).

- 27 -

Figure 10 – Schema of combined intake system without accumulation

1 – conveyance channel with horizontal longitudinal embankment (sections A-A in B-B), 2 - penstock, 3 – weir with intake structure, 4 – surge chamber without spillway, 5 – penstock gate, 6 -

powerhouse, 7 – unusable water, 8 – lower water, 9 – hydrostatic water level, 10 operating channel water level, 11 – design without channel , H – hydropower head

4.2.2. Hydropower plant equipment The conveyance of water into a hydropower plant from the intake structure to the powerhouse is equipped with trashracks (rough and fine) and gates or pipe valves. That equipment is called hydromechanical equipment. It is installed outside of the powerhouse except for the pre-turbine pipe valve which is most frequently found inside the powerhouse. The main component parts of the of the powerhouse are water turbine and generator. The turbine converts the potentional power of the water into mechanical power and with it it propells the generator that then converts the water energy into electricity. The water turbine and its generator can be called hydro generator. SHP are usually equipped with one hydro generator which means they have only one turbine and one generator. To cover a wider range of flows the practice is to install two hydro generators. On of the most important outcomes to decision support is gross average energy (E in kWh) which can be evaluated by next equation (ESHA, 2004):

E = fn (Qmedian, Hn, µturbine, µgenerator, µgearbox, µtransformer, γ, h) Where:

Qmedian = flow in m3/s for incremental steps on the flow duration curve Hn = specified net head µturbine = turbine efficiency, a function of Qmedian µgenerator = generator efficiency µgearbox = gearbox efficiency µtransformer = transformer efficiency h = number of hours for which the specified flow occurs and γ = specific weight of water (9.81 kN/m3).

- 28 -

The efficiency can be also divided into three parts: volumetric, hydraulic, and mechanical efficiency (Eshenaur, 1984). Volumetric efficiency is defined as the ratio of the water acting on turbine blades to the total water entering the turbine casing. For impulse turbines, nearly all the water entering strikes the blades; thus, this efficiency is close to one. The volumetric efficiency of reaction turbines is virtually the same as impulse, but waterwheels will be lower due to water spillage. Hydraulic efficiency is defined as the power input to the turbine shaft divided by the power input to the turbine blades. This efficiency is the lowest of the three efficiencies and varies widely among designs. Next Figure shows example of increasing the HPP efficiency when renovation with changes of turbo generator and penstock takes place. It can be seen that the efficiency can be significantly increased and can reach up to 88 % of available head. It has to be stressed that also additional hydraulic losses appears with water intake and its conduit to the penstock in the case of derivation type HPP.

Figure 11 – Example of calculation of general efficiency in the case before (upper table) and after renovation (bottom table) of existing HPP

The electricity generated in the hydropower plant is then conveyed to the grid via the operation control devices and electricity transport devices. These devices include a switch-control board with all necessary instruments, switches and protective appliances. Water turbines are the most specific elements of hydropwower plants. They are built for the purpose of using water energy. The parameters of the fall and flow for the construction of hydropower plants vary in regard to different terrains. Different types of turbines with different areas of use have been developed to perform their basic tasks to the best level possible and have

- 29 -

the highest efficiency within their operation range. The use of each type of turbine is economic in a certain area of heads and flows:

Pelton turbine used for high heads and low flows, Francis turbine used for mean flows and mean heads, and propeler, pipe and Kaplan turbines (axial turbines) suitable for high flows and low heads.

SHP use another type of turbine not known to large hydropower plants. These are Banki turbines. They have a wide range of use, they can be used instead of Pelton and Francis turbines. They are not suitable for high flows and low heads, where propeller turbines are used. Next figure shows what type of turbine is most efficient to apply based on head and discharge. A significant factor in the comparison of different turbine types is their relative efficiencies both at their design point and at reduced flows. Typical efficiency curves are shown in the figure below. An important point to note is that the Pelton and Kaplan turbines retain very high efficiencies when running below design flow; in contrast the efficiency of the Cross-flow and Francis turbines falls away more sharply if run at below half their normal flow. Most fixed-pitch propeller turbines perform poorly except above 80% of full flow.

Figure 12 – Turbines' type field of application (source: Guide on How to Develop a Small Hydropower Plant, ESHA)

For better illustration Figure 13 shows turbine efficiency based on discharge rate.

- 30 -

The generator driven by the turbine converts mechanical energy to electricity. There are synchronic and asynchronic generators. The latter are specific to SHP since the large ones use synchronic generators only. The difference is that the synchronic generators enable independent isolated operations of the power plant while the asynchronic generators (standard asynchronic engines are generally used for their robustness and low costs) usually do not allow that. The choice of the type of generator affects the concept of the remaining electric equipment. The remaining electric equipment includes energy part, management and regulation part and remote control and operation of SHP. Energy equipment includes equipment from the connection to the generator to transformer connecting point, including the electric instalments for the purposes of the SHP. The operating equipment includes all devices for measurements, protection, regulation and automation and other assistive devices. The scope of such devices depends on many requirements. In the first place, the conditions for construction of SHP, its capacity and the planned manner of operation. These conditions approximately define the minimal scope of the devices. Then they are also defined by the requirements of the operator in regard to the SHP operation, the level of automation and the conditions of connection to the public electrical grid.

Figure 13 – Turbine efficiency of various turbines based on discharge rate (source: http://www.esru.strath.ac.uk)

Optimal production of electricity demands daily control and operation management of the hydropower plant. That is performed by automatic remote control system equipment. Contemporary control and operating equipment is computer technology based and data is transferred via telecommunication (also wireless) connections.

- 31 -

4.2.3. SHP operation /grid connection Parallel to grid connection

In run-of-river SHP the generator starts automatically and it synchronizes itself with the grid. This operational mode has active level regulation in which the generator converts to electricity the entire available water flow (to the height of the installed flow). In case of electrical grid failure the generator stops and then automatically restarts, synchronizes itself and operates with level regulation once the power is restored. The system does not require the presence of an operator. The generator protection triggers the generator breaker and stop the turbine and at the same time activate the remote SHP failure signal. In accumulative SHO the operation is adjusted to the accumulation and hydrological conditions as well as consumer needs. Isolated operation/load

The generator starts automatically to up to design-specific rotational speed. This operational mode has frequency regulation ensuring 50 Hz regardless of the customer power. It requires the presence of a servant who defines the largest number or power of customers in regard to the currently available water flow allowed power of customers. The generator protection triggers the generator switchgear device and stop the turbine. Beside automatic operation manual operation is possible, in both the parallel and the isolated mode, where all manipulations and settings of the operational parameters are performed by the servant manually with keys on the control device.

4.2.4. Investment costs in SHP implementation The main factors affecting the cost of SHP construction include: the size or the capacity of the plant, specific characteristics of the location and other circumstances (specific watercourse fall, accessibility of the site, distance to electrical grid, existing facilities…), allocation of the construction costs in cases of multi-purpose facilities (water provision, flood protection, irrigation…), type of facility (low flow and high head, high flow and low head, accumulation…) concept and organization of construction, implemented simplifications and the level of automation. Beside the construction and equipment costs, the justification of the construction of SHP and the use of water for the generation of electricity is governed by legal conditions and the necessary acquisition of all the permits for construction and water use, environmental conditions, the guarantee of the state to purchase electricity etc., which will be covered in the second phase of the project. The cost efficiency of SHP can be roughly estimated by comparing the value of generated electricity with construction and production costs. The investment program for SHP construction includes an analysis of cost efficiency and expected time of the return of invested funds.

- 32 -

4.3. Current conditions in the field of water use in SHP From 2002 to the end of 2006, a total of 593 concessions for different water uses were granted, 457 out of which were SHP (condition in 2006). It needs to be stressed that those were mostly not the cases of new water use but a large number of concessions resulted from the new Water Act on the basis of which any production of electrical energy by hydropower plant if connected to the public network requires concession. Therefore a large number of the granted concessions were only an adjustment of the existing water rights which before 2004 had been defined by the water management permit, permit of use and on the basis of construction work application. From 2006 on, the number of the SHP concessions increased only by 29, where in last two years no concession was granted. This indicates a slowing down in SHP concession granting, where one of the reasons is probable implementation of EU Directives in the field of environment, where reestablishment of modern approaches and relations is needed.

Figure 14 – Number of concession granting for hydropower water use by year

The gathered data on the energy produced by electrical plants in 2005 show that the largest part of

the energy (94.3%) was produced by the plants with the generating capacity higher than 10 MW and only 5.7% by SHP. The detailed analysis of the energy produced by SHP shows that 57 plants owned by public companies produced around one half of the SHP share while the other half was

produced by the remaining 400 privately owned power plants.

- 33 -

Figure 15 – Shares of energy produced by power plants in 2005

Figure 16 – Comparison of shares of energy produced by power plants in 2005

The use of water for the production of electricity in SHP received strong governmental support at the beginning of the nineties which saw intensive building of SHPs. The situation changed in the second half of the nineties and at the beginning of this millennium when not only the energetic but also the environmental factor became important which led to a more demanding and expensive

- 34 -

building procedures and conditions of water use. One must be aware that the electrical energy market has been liberalized which brings both positive and negative effects. At the moment, the state protects the production of electrical energy with the price, an additional bonus and ensured buyout; it is difficult to foresee the future when our market opens to foreign producers as well.

4.4. How to increase the existing scope of energy produced by SHP

4.4.1. New water rights granting – SHP concessions The construction of SHP affects the environment in several manners. The hydropower plants are facilities built directly by and on a water surface. The influence can be observed in the changes of the landscape, the changed levels of the groundwater and are reflected in the characteristics of the water and the living area in the watercourse and on its banks. In concession granting a question is considered about the balance between the new kilowatts of electrical energy and the related procedures and impact on the environment in the view of environmental protection and conservation. From that viewpoint, the construction of new SHP has become very demanding and complex since the requirements and conditions include a large number of factors. In the decision on the possible water right acquisition the following is checked: the existence of spatial planning regulations for the construction of facilities for water use; the environmental protection guidelines are acquired from the Institute for Nature Conservation in accordance with the Nature Conservation Act; an expert opinion is obtained from the Fisheries Research Institute of Slovenia in accordance with the Freshwater Fishery Act. The relevant area needs to be checked for any already existing water rights. The protected and endangered areas and other legal regimes according to the Water Act need to be considered. After the legal and professional limitations and regimes have been considered, the Government of RS adopts a concession act published in the Official Gazette of RS. On the basis of this act, a public tender is offered by the Environmental Agency of the Republic of Slovenia (EARS) which prepares a proposal for the selection of concession holders. The proposals of the Decrees on the selection of the concession holders are then considered by the government which selects the concession holders. Upon the validity of the decree, the EARS draws a concession contract between the concession holder and the Republic of Slovenia as the concession giver. On behalf and under the authority of the Republic of Slovenia the general manager of the EARS signs the contract. It is only after all these procedures that the investor can start acquiring the building permit and after the acquisition of the latter with the construction itself. With the described practice, the period from the initiative for water use to the production of electrical energy stretches from 5 to 10 years on average. There has been no case so far in the SHP concession granting when the state as the concession giver or the caretaker of the water potentials, which is the common good, would do preliminary checking of the possible and reasonable water use in view of national economy. The initiative for water use and related goals have so far been entirely in the domain of the potential concession holder who also financed the preliminary checking and procedures related to the possibilities of water use. The initiator must actually provide technical documentation to prove the economics of the water use, from his or her viewpoint only. The initiator must also do preliminary checking and ensuring the right of construction on the potential land areas for the possible permitted construction. The above-mentioned thus means that it is actually impossible for any other parties but the initiator to participate in the public tender. The tender for concession granting is thus just a formality. There is no real competition and optimization of the use of common good which is expected by the law.

- 35 -

In regard to the above-mentioned, we believe that the Slovenian existing practice of concession granting is not optimal. The preliminary procedures of checking the possible and reasonable water use should be conducted by the state with the consideration of its comprehensive vision of the use of water potential and with consideration of all positive and negative effects of integrating such facilities in the environment. In that manner, the proposal for the water use would have preliminary (prior to the tender) checking at the state and local levels, including the energetic and environmental interests as well as the interests of water management. There could be comprehensive management of flood protection, water collecting for the provision of drinking water, the liabilities and costs for maintenance of rivers in the so called special use would be regulated. Since the key facilities for the water use (intake, conveyance, machinery, outflow) are by 90% located on water or riparian lands (buffer zone next to both banks of water channel) and with special status, the state could on the basis of such preliminary procedures already define the ownership. From the viewpoint of water management, the ownership of the water and riparian land is in the interest of the state. Only after the comprehensive procedure and positive decision by the state on the possible water use as well as after the land cadastre relations have been dealt with, a tender would be offered with precisely defined conditions for water use. Only then the tender would become reasonable and the concession holder would be selected on the basis of the best bids. The constructing and monitoring of production and maintenance of the influential areas of water use would be already defined and clear at the time of the selection or granting of the concession.

4.4.2. Reconstruction and optimization of the already-granted water potentials Nowadays, reconstruction usually does not mean only the replacement of broken or worn out equipment but also a step forward to a higher technical level of the procedures in a power plant and thus an increase in the efficient use of the basic water potential. On the basis of the available data (source: EARS), it is evident that the existing water use in SHP still has not reached its fullest since the comparison of the produced annual energy and the granted gross water potential shows that only about 30% of the potentials are used which indicates the need for optimization or updating of the facilities and equipment. The updating or adapting of the existing use to the new environmental demands is required by the new environmental legislation. From the economic and environmental viewpoint, the updating and comprehensive reconstruction of power plants is necessary. The aims of the comprehensive reconstruction include:

- optimization of the use of water potential available for the production of electricity - increased lifespan - decreased impact on the environment.

Technically, all key elements necessary for the production of electricity need to be updated or reconstructed:

- water intake structure - conveyance facilities (pipelines, channel) - machinery - turbine with generator - water outlet - power plant management system.

The following is also updated and adapted in the water intake system:

- automatic assurance of adequate ecological water flow - facilities enabling the migration of water organisms.

- 36 -

Any rebuilding of course starts with a study on the cost-efficiency of the project. Apart from the economic parameters, the study should consider:

- legally required adaptations for improved ecological condition in the influential area or in the are of concession

- precise definition and evaluation of the scope of maintenance in the influential area, - precise definition of the scope and contribution in the maintenance of the water

infrastructure

At the completion of the existing concession and drawing of the new contract these parameters will be essential in the defining the fees necessary for the water use (water reimbursement and concession fee). A clear statement by the state in regard to the above-mentioned points is an essential parameter in deciding on the reconstruction since the state and its views and interests can encourage the use of energy or discontinue its use on certain rivers. The dates of the renewal of concession contracts are already known, the contracts have been granted for the period of 30 years. The state should now give clear guidelines to the concession holders since many water uses are already disputable from the environmental viewpoint or not profitable due to their limited future potential based on additional requirements.

5. Economic aspects (UL) The main issue which has to be analyzed in detail in the process of design and implementation of a small hydropower plant (also other facilities for production of other type of renewable energy – solar, wind, biomass) is the economic and financial feasibility. Namely without a national support schemes, which are regulated by the national regulations, under the current framework conditions, characterized by the non-internalisation of external costs of energy production, costs tend to be significantly higher than those of conventional sources of energy. According to the ESTIR (Electrochemical Science and Technology Information Resource) in 2002 Figure 17 shows investment costs specific to small hydro scheme in kW size (but does not relate to head).

0

1000

2000

3000

4000

5000

6000

7000

50 100 1000

€/kW

kW

Typical turn‐key investment costs for SHP

Min

Med

Max

Figure 17 – ESTIR turnkey investment costs for small hydro

- 37 -

Figure 17 shows that in the smaller kW range final investment costs can be as high as 6000 €/kW in extreme cases.

Economic and financial feasibility is mainly conditioned with technical conditions of construction and equipment, which define biggest financial costs on the one side (this costs are estimated around 60 to 80 % of all investment costs) and with the electricity production on the other. Basic equation is very simple, potential investor has to assure that all revenues in the operational time of SHP (payments for produced electricity) will cover all the expenditures in the phase of design, construction and maintenance, will give positive outcome (profit) on the basis of Cost-Benefit Analysis with application of relevant economic and financial parameters (depreciation period, discount rate, ...) and performance indicators (Internal Rate of Return, Net Present Value, ...). Although a sensitivity analysis is an important final step in the phase of Cost-Benefit Analysis it is still mostly neglected by many potential investors.

Beside mentioned construction and equipment costs land purchase or easement has to be considered as one of the triggers which can affect the feasibility of the investment (because of additional financial costs or delaying of the start of the investment). Next Figure shows area which was recognised as technically suitable for water intake structures and facilities (weir, sediment trap, overflow, etc.) but final detailed location of structures is defined with land cost survey. For example land costs are much lower if structures are planned on public land (water course parcels are under national and local roads are under municipal competency and management). So if the potential investor needs to purchase land or assure land easement from many different owners this can put a lot of risk for an increase in the costs.

Figure 18 – Land cadastre in the area of planned water intake structures and facilities for SHP

For example, in Slovenia it is also important when potential investor purchases needed land for investment, since the land prices for required land can increase significantly when the investor is granted with the concession, and put the feasibility of investment under the risk.

Another important issue are environmental requirements especially preservation of river continuity and assuring of Environmental Flow in river stream. Environmental requirements add additional

- 38 -

costs to the investment on one side of the equation (fish passages, additional monitoring equipment) and reduce the disposable water for electricity production on the other side of the equation. In Slovenia, a big issue among water users in year 2008 was the process of adoption of a new Decree on determination of ecologically acceptable flow (environmental flow) and how it will affect the already operating SHP which were designed and analysed under much milder environmental regulations. Some analyses showed that electricity production from SHP could fall by about 40 %, so the Decree also defines mitigations for already operating SHP (if this will significantly affect electricity production or EF was already defined according to the previous policy).

The investment in SHP is an investment with a lot of decision stakeholders involved in the process (governmental, local and private level) and with significant impact into the space (spatial planning, environmental impact assessment) and a lot of structures (weir, water intake, penstock, tail race, water release, fish letter) and facilities (gates, valves, monitoring equipment, mechanical and electrical equipment) which are interdependent from the efficiency point of view. That is why it is important to implement efficient early phase project management which can reduce non-predicted expenditures in construction phase. Figure 5 shows main phases of the project, which starts with the idea (suitable location for SHP determination) and prefeasibility studies which give the answers on whether a project could be feasible from different aspects (financially viability, possibility for land purchase, environmental requirements, what kind of documentation elaboration will be required). Next phase, overlapping with previous phase, is a planning process which usually starts with some basic conceptual design which is modified (getting more and more in detail) according to the new outcomes of more brief analyses in the area of spatial planning, finances and technical solutions.

Although the next phase – construction phase is most intensive at the level of activity and expenditures, the planning and design phase can be more time consuming. The final phase before start of SHP operating considers testing operation and elimination of faults and discrepancies with approved documentation.

Figure 19 – Main phases of the project and their overlapping

In the entire process, control takes an important place. This kind of project implementation approach is recognized worldwide but it can be still neglected. Main reason is that first phases, where results can not be seen yet, require a certain amount of expenditures, which are very

Time

Leve

l of a

ctiv

ity

Feasibility Planning and design process

Construction Final phase

Control process

Electricity production

- 39 -

difficult to explain if elaborated documentation shows the investment is not eligible. This problem is mainly noticeable in the public sector.

Next figure shows similar illustration of project phases as previous figure but compared to the percentage of completion of the investment to the stage of full operation.

Figure 20 – Project phases in investment processes

Since the SHP life cycle is very long (more than 50 years, even 100 years) absence of brief feasibility and design phase can lead to technical solutions which will require a lot of modification, equipment replacement, maintenance expenditures and non-efficient electricity production.

From the management point of view in current practice it is showed, that most suitable technical solution of SHP are those with high heads and low flows which requires technical solutions with high pressure penstocks and Pelton turbines, which assure high efficiency also in the interval of low and mean flows. Advantage of such type of SHP is also in the area of high flows and sediment transport management, due to the lower flows.

5.1. Investment documentation

To assure efficient project management and brief financial examination viability of certain investment project at all the stages of the project different investment analyses have to be done. In the area of Public Finances Government of the republic of Slovenia has adopted a Decree on the uniform methodology for the preparation and treatment of investment documentation in the field of public finance which defines elaboration and process of investment documentation in different stages of the project which are financed by public financial sources. Since this regulation gives a comprehensive approach which is based on modern economic and financial aspects it is also used by private sector.

- 40 -

Next figure, which shows the parallelism and interdependence of legal, technical and economic documentation in all phases of project in row “Investment documentation”, shows what kind of documentation has to be elaborated according to the mentioned Regulation. Also a phase of concession granting for water use and start of the electricity production is showed.

Spatial and adiministrative acts

Technical and project doumentation

Investment doumentation

Concession

Concession granting

Phase o

f 

operatio

n 

Perodical reportsPeriodical reports on the

investment effect

Operation and electricity production

Phase o

f design

Phase o

f 

constru

ction and 

final testin

g

Investment implementation progress

report

Resuming of investment ProgrammeProject of executed

workPermit for use or operation

Phase o

f reconnaissan

ce 

(EU, natio

nal, lo

cal 

strategy)

National programmes (Energy Programme, …)

StudiesPreinvestment documentation

(reconnaissance)

National plan (Action plan for RES, River Basin

Management Plan, …)Documentation for

project identification Phase o

f 

preafisib

ilty 

studies

Conceptual design

Spatial act procedure adoption (National or

Municipal)

Preinvestment concept documentation

Basic design (Comprehensive EIA if

required)

Investment Programme and Study

of Realization of Intended Investment

Project to aquiring building permit (also Project for

the tender and Project for the execution) + EIA if

required

Building permit

Figure 21 – Parallelism and interdependence of legal, technical and economic documentation acquiring or elaboration with inclusion of hydropower water use

First phase (pre-investment documentation) is not defined by Regulation but gives efficient support to preparation of strategic documentation mostly on administrative and regulatory level. For example Action Plan for Renewable Energy Resources for period from 2010 to 2020 which was adopted in July 2010 is based on many different studies in the field of efficient energy production, economical analyses etc.

- 41 -

Next documentation is Documentation for Investment Project Identification. It is a basis for decision making in the process of next documentation elaboration. This documentation contains:

Determination of investor and other subject responsible for supervision (control) and investment documentation elaboration

Analysis of current stage Objectives of the investment Overview of different alternatives of possible solutions Type and value of the Investment Definition of basic parameters, which define the Investment (conceptual design, location,

extent and specification of the Investment, timetable, human resources, financial and other sources)

Statement for justification of the investment Timetable for elaboration of next investment and technical documentation

In next phases also spatial planning should be considered, which already requires more detailed technical solution (alternatives are more detailed spatially allocated). In this phase elaboration of Pre-investment Concept Documentation is required. This documentation contains:

Summary of Documentation for Investment Project Identification Analysis of current stage with definition of needs for the Investment Variant analysis with cost-benefit estimation (analysis) and investment effectiveness in

entire lifetime For each variant: locations and human resources analysis, timetable framework with

finance dynamics, financial structure, calculation of financial and economic performance indicators, sensitivity analysis

Report on criteria for optimal variant selection Proposal of optimal variant with report

It is important to stress that in the phase of spatial planning and technical documentation elaboration variant which at the beginning was not the most suitable can become optimal. It is also possible that no variant is viable, in that case most optimal solution can be a solution without investment. After that process and according to Slovenian legislative a concession granting can be proceeded and the investor can start to elaborate most important investment documentation Investment Programme, which is also a basis for financial sustainability of the Investment (grants, loans, etc.). Investment Programme is in very detailed analysed optimal solution which is based at least on basic concept, as mentioned on the spatial plan which defines possibilities and terms for construction and land use for all structures and facilities of planned SHP, on technological project with specification of the equipment and additional field surveys. This documentation beside other contains:

Summary Data about investor and other responsible subjects Current stage analysis with definition of the needs, which will be satisfied with the

Investment Market possibility analysis Technical and technological part Employee analysis (with and without investment) Project evaluation on the basis of constant and current prices with detailed definition of

different type of costs Location analysis with references for adequate spatial plans

- 42 -

Environment impact analysis with cost estimation of negative impact on environment with use of polluter pay principle

Timetable of construction phase with detail list of all activities, elaboration of organization scheme of project management and feasibility analysis

Financing plan based on current prices and on dynamic and financial sources (if loans are planned also loan cost calculations and loan reimbursement plan)

Revenues and expenses projections after the start of the operation for entire economically useful life

Evaluation of other costs and benefits and justification analysis (ex-ante) in economically useful life of the Investment with economic and financial analysis with calculation of indicators based on static and dynamical method

Risk and sensitivity analysis Presentation and explanation of the results

The Investment Programme is quite detailed. This should be considered also in the area of SHP investments, since loans and support schemes will be included in the Investment.

After Investment Programme and before operation of the Investment also a Study of Realization of Intended Investment should be elaborated. It consists:

Investor data and organizational solutions for project management with responsible subjects

Method and procedure for procurement Timetable of all activities for realization of the Investment and start of operation List of all elaborated and needed investment, technical, spatial and other documentation

according to adopted regulations Method of takeover and start of the operation with determination of supervision and

maintenance in the phase of operation. After the construction phase next investment documentation is also elaborated:

Report on Investment execution Report on Investment effect (for example justification analysis (ex-post)

As it was mentioned, the phase of concession granting can start after the adequate spatial plan defines area where SHP will be constructed as area harmonized with all legislations and regimes so building permit can be acquired. Since water in Slovenia (by Water Act) is considered as public good the concession is granted in the process of public tendering. Interested Investor had to prepare bids, where beside other terms for concession granting also data for evaluation of the bids has to be included. The last procedure is defined by the following criteria:

Period duration to complete all works for start the operation of SHP Quality of basic design Ability of a bidder for investment cost recovering (agreement with bank, own resources) Employee qualification (machinery, electric, hydro civil works, managing of SHP) Company financial and business ability

At basic design also financial analysis has to be attached to the bid, and it has to be prepared with the following content on the basis of discount rate of 6 % or 7 %:

Financial analysis with planed expenses and revenues for each year separately for concession duration (30 years), on the basis of constant and current prices and for all activities (land purchase, documentation elaboration, construction works, equipment, ...)

- 43 -

In financial analysis on the basis of constant prices next performance indicators has to be calculated: Return of Investment, Net Present Value, Relative Net Present Value, Internal Rate of Return

With that the water management authority (Ministry for the Environment and Agency for the Environment of RS) assures that the applying investors for concession granting (bidders) have done some cost benefit analysis with risk analysis. This significantly helps to avoid further problems in the process of project documentation elaboration for building permit acquiring and construction, which can have a lot of unexpected time delays and financial viabilities. In some cases superficial pre-investment analyses can be followed with serious company’s financial liquidity and even concession dispossession.

As it was mentioned efficient electricity production from renewable energy resources nowadays cannot be competitive to conventional electricity producers on open electricity market. This is the reason why different support schemes take place and are regulated by EU and national policies.

5.2. Stimulation for increase of Renewable Energy Resources electricity production

Without national support schemes, which are regulated by the national regulations, under the current framework conditions, characterised by the non-internalisation of external costs of energy production, costs tend to be significantly higher than those of conventional sources of energy. That why different mechanism to stimulate RES production can take place.

Table 2 shows different approaches which can be applied and adopted to stimulate increase of share for electricity production from RES (Haas et al, 2004; APE, 2007).

Direct Price driven Capacity driven

Investment focused - subsidy of investment - tax credits (loans) - low incentives

- bidding (investment support)

Regulating

Generation based - Feed-in tariffs (guaranteed prices for purchase or premiums)

- bidding (long term contracts) - Tradable green certificates

Investment focused - Shareholder programmes - Contributing programmes

Voluntary

Generation based - Green tariffs

Table 1 – Different strategies to stimulate RES: size categories of RES generating plants for RCE

Beside mentioned direct stimulations also strategies with indirect influence can be implemented such as:

Eco-taxes for electricity produced by conventional sources Taxes/permissions for CO2 emissions Withdrawal of subventions for fossil or nuclear production sources Exemption of taxes

In EU at the moment next systems are in function:

- 44 -

Feed-in tariff system (FIT) tenders or competitive bidding system; green certificate trading mechanism Tax exemptions Targeted Tax for conventional energy sources, which is used as financial support for RES

share growth In Slovenia a system with FIT on one side and sort of Eco-taxes on the other site is implemented and adopted with policy. On one side FIT system is adopted with two approaches (Decree on Support for Electricity Generated from Renewable Energy Sources, 2009):

guaranteed purchase of electricity (based on fixed price). Pursuant to this support, irrespective of the price of electricity on the market, the Centre for RES/CHP Support buys all the acquired net electricity produced, for which the RES generating plant has received guarantees of origin, at guaranteed prices set out in this Decree;

financial aid for current operations (based on premium). This support is allocated for net electricity generated for which a guarantee of origin has been received and which RES electricity producers sell themselves on the market or use for their own consumption, provided that the costs of producing this energy are greater than the price that can be obtained for it on the electricity market.

And on the other side Eco-taxes system (so called contribution system) is adopted in a way that final costumer (electricity user) with energy consumption also pays contribution, which is determined on the basis of power, level of voltage, category of sale and a purpose of electricity use. This field is arranged and adopted with Regulation on the way of defining and accounting of fee to assure support to production of electricity from cogeneration with high efficiency and from renewable sources (2009).

Described represents a comprehensive approach for efficient stimulation for renewable energy production share increase (Figure 20).

Figure 22 – Redistribution of contributions (eco-tax) collected from consumers of conventional

produced energy to RES producer to cover higher energy production costs

Conventional energy production

Energy production from different RES

Ene

rgy

prod

uctio

n co

sts

Subsidy Centre collects contributions from final consumers and subsidies the RES energy producers

- 45 -

The guaranteed purchases of electricity (fixed prices) or financial aid for current operations (premiums) are defined in mentioned Decree on Support for all kind of RES (hydropower, thermal, wind, solar, biomass) and are determined on the basis of calculating electricity generation reference costs (RCE) from renewable energy sources. The basic principle in allocating support to RES generating plants that meet the conditions laid down by decree on support of the electricity generated from RES is that support may only be granted if the electricity generating costs in such generating plants exceed the price of electricity from such plant in the open electricity market.

Preparation of the RCE methodology is based on the following starting points: Economic consideration covers analysis of generation in typical RES generating plants Calculation of RCE must comply with the requirements of the Guidelines for environmental

state aid Calculation of RCE ensures a base for determination of an appropriate level of support for

RES generating plant (aid may only cover the difference to the market price of energy), and must:

- Ensure appropriate objective economic conditions that will encourage investors - Be a transparent, simple and non-excessive system, understandable for users, and

not too difficult to maintain

and was prepared and elaborated in Methodology for determining reference costs of electricity generated from renewable resources (Government of RS, 2009).

The methodology for determining RCE is based on determination of the total annual operating costs of RES generating plants, based on the following technological and operational parameters and variables, and cost categories and revenues:

Main technological and operational parameters: - installed power (MWel) - annual operating hours - electrical efficiency - Eleff (%), - thermal efficiency - Theff (%), where heat is also exploited

Investment costs (specific, €/kWel), including the cost of: - land, - machinery and electrical equipment, - civil works, - installation, start-up and testing, - network connection, - cost of planning and obtaining permits, are included in the calculation with an annuity calculation (15-year economic period of the project, and 12% discount rate), and represent the costs of depreciation and cost of capital.

Operating costs (€/MWhel): - Maintenance (€/MWhel, % of investment), - Operation - work (number of employees, €/year), - Insurance and other costs (% of investment, €/year)

Fuel costs (€/MWhg) Revenues, benefits (€/MWhel)

- Sale of heat (€/MWht) - Other benefits

Beside type of RES used and sustainability criteria also size categories of RES generating plants for RCE are considered (also for SHP), this is presented in Table 2.

- 46 -

Table 2 – Different strategies to stimulate RES

Main input economic parameters and variables in the economic model for determining RCE are:

Depreciation period: 15 years, Discount rate: 12%, Investment costs, Price of fuel, Operating and maintenance costs, Revenues and benefits

For example Discount rate bases on structure of funds for investment (equity or loans), credit costs and required return on equity. The latter is determined at 20 %, because reflects current conditions in Slovenia, where the returns required by investors are relatively high due to the possibility of relocation of generation to other countries, while the cogeneration market is not yet fully developed and the returns achieved by investing in core activities are at this level.

Based on the input parameters and methodology for calculating RCE [€/MWhel] presented, the method of determining RCE can be summarized by the following equation:

RCE = [COSTS (investment + Operating & Maintenance)] / ELECTRICITY

For typical generating plants that exploit the potential of watercourses input data for determining RCE (hydro power plants) on the basis of presented methodology are shown in Table 3.

Table 3 – Input data for determining RCE of hydro power plants

- 47 -

As a result of the analysis and calculations Figure 9 shows the structure and level of RCE for hydro power plants, which range between 77 and 105 €/MWhel. Investment costs represent almost 80% of the total RCE, with the remainder accounted for by operating and maintenance costs.

8471

63 59

21

21

1918

0

20

40

60

80

100

120

up to 50 kW up to 1 MW up to 10 MW up to 125 MW

RC

E [

EU

R/M

Wh]

O&M

Investment

Figure 23 – RCE and its structure for hydro power plants

According to the Regulation on supports for the electricity generated from renewable energy sources and according to the size categories of HPP three levels of guaranteed purchase prices are defined presented in Table 4.

Type of SHP based on installed capacity

Guaranteed purchase [EUR/MWh]

Premium [EUR/MWh]

Micro (< 50 kW) 105,47 49,57

Small (< 1 MW) 92,61 36,71

Medium (>= 5 MW) 82,34 23,84

Table 4 – Guaranteed purchase and premiums for different sizes of SHP (year 2010)

5.3. Investment costs estimation

Investment costs cannot be finally and exactly defined till after the completion of all works, equipment installation and defaults remove in testing period (phase of Resuming of the Investment Programme on Fig. 21). So any previous financial economic analysis depends on cost and revenue estimation which precision depends mostly how detailed gathered data and

- 48 -

field survey was performed. Also the parameter of time is very important, namely further in the future the start of the operation of SHP is placed, higher are the uncertainties (cost and purchase prices, water availability, political trends etc.).

To provide the investor and strategic planners with adequate data on investment cost of SHP, investment cost curves for typical structures and facilities can be prepared. For financial analysis a discount rate from 6 to 7 % and management and operational costs around 3 % to 4 % are considered.

Next three figures shows investment curves for SHP in Alpine space which bases on equations determined in software VapidroAste (Alterach et al. 2008, 2009). They were calibrated on the basis of Slovenian data (one investment programme and one concept design documentation) and are acceptable for the phase of strategic planning.

Figure 24 shows the cost curve for weir and water intake structure which depends on the size of catchment area. The curve also takes into account the costs of design, land purchase or easement and environmental requirements (fish pass, equipment to assure ecological acceptable flow with remote operation and monitoring).

Figure 21 – Estimated costs for weir, water intake and environment requirements for strategic planning

Figure 25 shows the cost curve for water conduct (channel, pipeline, penstock, head tank) from the water intake to the power house, which depends on the pipe diameter. The curve also considers the costs of design, land purchase or easement.

And Figure 26 shows the cost curve for power house (building with turbo generator and electric facilities and equipment) with water release back to the main river stream. water conduct (channel, pipeline, penstock, head tank) from the water intake to the power house, which depends on the pipe diameter. The curve also considers the costs of design, land purchase or easement.

- 49 -

Figure 22 – Estimated costs for weir, water intake and environment requirements

Figure 23 – Estimated costs for weir, water intake and environment requirements

5.4. Main problems According to current process of implementation of hydropower in Slovenia from economic point of view the following problems should be considered:

There is no guarantee for the investors that after their involvement in the phase of pre-investment studies, participation in the environment impact assessment documentation elaboration in the process of spatial planning (time and financial resources) they will be

- 50 -

granted with the concession for water use for hydropower production. Potential investors assures their advantage in the phase of public procurement for concession granting with land purchase or easement

Cost-Benefit Analyses are in many cases superficially prepared which puts risk in further phases, especially in the phase of construction

There is lack of efficient enterprise model, which will support exploitation of longer sections (reaches) of river courses with determined ecologically acceptable potential or prepare SHP owners which are located one after another to start constructing one larger SHP.

6. Vapidro-Aste: integrated tool to calculate the hydropower potential (RSE)

VAPIDRO ASTE is a GIS integrated tool to calculated the hydropower potential and identify the identification of promising small scale hydro plants sites, through the evaluation & management optimization of water availability, considering geodetic heat in the territory (at regional and basin scale).

The tool takes into account the water resources present exploitation with its geographical location and elevations (irrigation uses, drinkable water, existing hydropower plants, etc.), and the limitation that this creates regarding the potential energy patterns. The software is based on the topographic information (Digital Elevation Model) and the isohyets maps, with a whole analysis of the catchment, together with the regional evaluation of available discharges along the river system.

Based upon a user friendly graphical interface the tool is able to split the river into a hundreds of cross sections, calculate the available discharges and potential hydropower production, considering constraints like minimum flow, withdrawals and restitutions scheme.

To realize the optimization VAPIDRO ASTE performs an economical & financial analysis of SHP plants (including green certificates and eventual governmental subsides).

The tool shows to be a quite powerful instrument to support decision makers and stakeholders, for the energy plan preparation, the assessment and the implementation of small scale hydropower plants.

The main chapters are divided as follows: first related to the methodology implemented and the second part regarding the user guide of the tool.

6.1. VAPIDRO-ASTE methodology

6.1.1. Available, natural and hydropower flow In order to analyse the potential small-hydro sites at a river scale, the knowledge of the water availability is an essential data. Two inputs are required to develop the calculation:

at least one point with available flow (mean annual discharge) data, otherwise a regionalization method can be applied [Alterach et al, 2005, 2006];

water exploitation annual volumes with its precise location, i.e. withdrawal flows and restitutions flows along the analysed river stream.

- 51 -

It is possible to estimate the potential discharge to be used in a possible hydropower exploitation following computation and interpolation steps. The interpolation process uses a double transformation of the river flow data, first the “naturalization process” of the river measured point flows, interpolation of the natural values and then a final transformation of available flows for every cross section.

evaluation of the Point Natural Flow (Qnat) in a particular section, equals to the “Point Available Flow” (Qav) , cancelling the effect of the upstream withdrawal/restitution scheme;

estimation of the Natural Flow (Qnat(x)) in every river section “x”, as a result of interpolations and proportions based on the Qnat data;

evaluation of the Available Flow (Qav(x)), in every river section “x”, equals to the calculated Natural Flow minus the upstream withdrawal/restitution flows;

calculation of the Hydropower Withdrawal Flow (Qhp(x)) in every river cross section “x”, that represents the design value (mean annual discharge) for hydropower generation plants. It takes into consideration also the downstream withdrawal/restitution flows and the Minimum Instream Flow.

The Figure shows the conceptual scheme followed to calculate the Hydropower Withdrawal Flow in a given cross section.

Point available flows

Qav

Point natural flows

Qnat

Natural flow

in every cross section

Qnat(x)

Hydropower Withdrawal

Flow

Qhp(x)

Measured flows in almost one cross section

Available flow

in every cross section

Qav(x)

Interpolations and area weighted

proportions

Downstream withdrawals &

restitutions

Minimum Instream Flow

Upstream withdrawals &

restitutions

Upstream withdrawals &

restitutions

Figure 27 – Computation/interpolation process to calculate the hydropower withdrawal flow

The Qnat for each measure point is obtained summing the upstream withdrawal/restitution flows as in the following formula:

N

1jjq Qav Qnat

where:

Qav measured flow in the section (Point Anthropic Flow);

Qnat natural flow in the measuring section (Point Natural Flow);

q j withdrawal (+) or restitution (-) upstream points.

- 52 -

The Figure shows a schematic representation of the measure section (Available Flow) and the withdrawal/restitution upstream scheme:

Figure 28 – Flow measure cross section and upstream withdrawal/restitution scheme

As a second step, Qnat(x) is calculated in every cross section “x”, using the area weighted interpolation (between two measured points) or a simple area weighted proportion (in case of having only one measured point). For example, in picture below in branches B and C interpolation is applied, on the other hand the area weighted proportion is applied in branches A and D.

Figure 29 – Watercourse scheme with 3 flow measure sections

The third step concerns the evaluation of the available flow Qav(x) in every cross section, calculated as follows:

N

1jxjq Qnat(x) Qav(x)

where:

Qav(x) the available flow calculated in each cross section “x”;

Qnat(x) the natural flow calculated in the cross section x using the interpolation/proportion method;

q xj withdrawal (+) or restitution (-) flow in the upstream j-sections, upstream of the “x” section.

The intake cross section of a hypothetical small hydro power plant must be designed for the available withdrawal mean annual flow. The method considers two constrains:

- 53 -

the Minimum Instream Flow (MIF) calculated in the hypothetical intake section;

the downstream withdrawals affected by the hypothetical small hydro itself (i.e. between the intake and the restitution points).

The Figure shows the hypothetical power plant, i.e. the intake point and the restitution point (from the powerhouse), and the withdrawals P1, P2 and P3 in the sections s1, s2 and s3, between them.

.

Figure 30 – Withdrawal scheme between the intake and restitution points

Let us define the Maximum Withdrawal Flow (Qmax) in a given cross section “s” as the mean annual discharge that is possible to withdraw compatibly with the environmental constrains in the section “s”:

Qmax(s) = Qav (s) – MIF (s) where Qav represents the available flow in a cross section “s” as defined above and MIF is the Minimum Instream Flow considering river environmental quality, which can be assumed equal to the 10% of the natural flow in each cross section “s”.

MIF (s) = 0,1 · Qnat(s)

In order to calculate the Hydropower Withdrawal Flow (Qhp) for each “x” cross section, one of the parameters that determine the potential hydropower production, it is necessary to refer to the critical section “s”, with the lowest Qmax value in the “L” domain. The so called “structural length” (L) is defined as the distance between the intake and the restitution points, measured along the river thalweg (see Figure 4).

The released discharge in the power plant cross section is the following:

Qrel (x,L) = Qav (x) - min|[s=0,L] ( Qmax (s) ) .

and the mean annual discharge that can be withdrawal for hydropower purposes is:

Qhp (x,L) = min|[s=0,L] ( Qmax (s) ) .

It is possible to demonstrate that this methodology can ever satisfy the two constrains: the “Minimum Instream Flow” in the hypothetical intake section and the water availability at the downstream exploitation points.

- 54 -

6.1.2. Potential hydropower production calculation The Digital Elevation Model coupled with GIS tools, permits to obtain the ground elevation pattern and consequently the geodetic heads, related to a particular “structural length” (L), for any cross section “x” along the river stream. The geodetic head corresponds to the “Gross Head”, while the "Net Head" is obtained considering the hydraulic losses:

Hnet (x,L) = Hgross(x,L) – H(L)

where:

Hgross(x,L) Gross Head (m), depending on x and L;

Hnet (x,L) Net Head (m), depending on x and L;

H(L) hydraulic losses in the channel and in the penstock, depending on L.

The most suitable river branches for the hydropower purposes consider the best couple [Hnet;Qhp]. Then the Maximum potential hydropower production is given from:

8760L)(x,Hnet L)(x,9,81ηL)E(x, T Qhp

where:

E(x,L) yearly Maximum Available Energy (kWh/year), in function of x and L;

T electric global efficiency;

The above mentioned energy is the maximum potential available, considering the total exploitation of Available Withdrawal Flow during the entire year (8760 hours), taking into consideration withdrawals and MIF.

To calculate the potential installable power, the following relation is used:

KhlxE /),(L)P(x,

where

P (x,L) is the installable power in a given section “x” for a structural length “L” (kW)

Kh yearly continuous hours at a maximum equivalent power to produce the potential energy (h/year)

6.1.3. Economic feasibility The choice of the most appropriate sites for the hydropower exploitation depends upon the relationship between the construction and maintenance costs of the full system and the income from energy selling plus the additional grants, such as the Green Certificates. The economic parameters to be considered are the following:

the hydropower plant cost (civil and electrical), for different structural lengths equal to 50, 100, 200, 500, 1000, 2000 and 5000 meters;

- 55 -

the energy income

the income/cost ratio.

The cost of each plant is evaluated by means of parametric relations as follows:

cost of the powerhouse function of the installed power P(x,L);

cost of the penstock function of the pipe diameter and the structural length;

cost of the weir and intake basin depending on the design flow and the upstream basin area;

maintenance and exercise costs, proportional to the total work cost.

Therefore the cost can be expressed as follow:

),,,(L)C(x, QhpDiamPLfn

On the other hand, the income is represented by the produced energy selling during the plant lifetime and the benefits of the Green Certificates for the first 15 years (Italy):

The formula that expresses the total updated income is:

nCV

nCV

n

n

i)(1i

1i)(1L)E(x,pgc

i)(1i

1i)(1L)E(x,pL)I(x,

where

I(x,L) total updated income (€);

p energy selling price (€/kWh);

E annual produced energy (kWh/year);

i up-to-date interest (5%);

n plant’s lifetime, equals to 30 years;

pgc Green Certificates price (€/kWh);

nCV Green Certificates lifetime, 12 years.

The above mentioned formulas permit to calculate the Income/Cost ratio for every combination of intake sections “x” and structural lengths “L”.

The whole optimization process takes into account a chain of hydropower plants with different L and “x” (two freedom degrees optimization). The optimized configuration is obtained maximizing the energy production and the Income/Cost relation of the total chain.

- 56 -

7. Guidelines for the producer of electricity from renewable energy sources (E-RES) (RO)

7.1. Reasons for promoting the electricity produced from renewable energy sources

The promotion of electricity produced from renewable energy sources (E-RES) is a high priority of nowadays for reasons of environmental protection, increase the energy independence from imported electricity by getting a wider range of energy sources as well as for other reasons of economic and social cohesion.

The Directive 2001/77/EC of the European Parliament and of the Council on the promotion of electricity produced from renewable energy sources in the internal electricity market represents the first step of European Union in complying with the Kyoto targets of reducing the greenhouse gases.

Romania was one of the first EU candidate countries transposing the Directive 2001/77/EC provisions into its own legislation (see GD no.443/2003 with modification of GD no.958 / 2005). Its indicative target for 2010 was fixed at 33%, representing the share of E-RES in the gross national electricity consumption. After that, through GD no.1069/2007 regarding the approval of the National Energy Strategy for 2007-2020, there were established the indicative target of 35% for 2015, respectively of 38% for 2020 representing the share of E-RES in the gross national electricity consumption.

7.2. Necessary steps for starting-up a generation capacity based on E-RES, trading the E-RES and benefitting from the e-res promotion system

obtaining the authorisations and approvals needed for building - up the generation capacity ,

building up the generation capacity ,

obtaining the generation license ,

obtaining the qualification certificate for the electricity priority production,

registration at the Electricity Market Operator (SC OPCOM SA) for selling E-RES on the DAM (Day Ahead Market),

registration at TSO (CN TRANSELECTRICA SA) – for obtaining the green certificates (GC),

registration at the Green Certificates Market Operator (SC OPCOM SA) – for registration in the GC Register and for participating on the GC market,

- 57 -

The E-RES producer may sell the E-RES on the electricity market, as any other electricity producer, obtaining the market price . For covering the entire generation costs and for obtaining a reasonable profit, the producer receives a green certificate for each MWh of electricity supplied in the electricity network. This green certificate may be traded within the price limits legally set-up.

Each month the E-RES producer:

� Receives GC from TSO for the E-RES supplied in the electricity network

� Sells GC within a bilateral contract or on the centralized market of the green certificates,

� Receives the money for the sold GC

� Inform the green certificates market operator about the sold GC within the bilateral contracts

7.3. Required documents in order to start-up an E-RES generation capacity

Legal documents issued by the local administration authorities such as:

� city planning certificate – includes also details about all the notifications to be obtained;

� building authorisation

Legal documents issued by the network operator the E-RES producer will be connected to

� location approval – issued according to the Methodology for issuing the location approval, ANRE Order no. 48/2008;

� technical connection approval – issued according to the Regulation on users connection to

the local electricity network, approved by GD no.90/2008.

Legal documents issued by ANRE

� setting-up authorisation

� according to the Regulation on electricity sector licensing and authorising, approved by GD

no.540/2004, further completed and modified, approved by GD no.553/2007 ;

only for power units with installed power higher than 1 MW.

� E-RES generation license

� according to the Regulation on electricity sector licensing and authorising, approved by GD

no.540/2004, further completed and modified, approved by GD no.553/2007;

- 58 -

� qualification certificate for the electricity priority production – according to the Regulation for qualification of the electricity priority production from renewable energy sources , approved by ANRE Order no. 39/2006.

7.4. Selling and obtaining of Incomes from E-RES E-RES may be sold:

� within bilateral contracts, to electricity suppliers or eligible consumers, at negociated prices;

� within bilateral contracts, to electricity suppliers,at regulated prices, according to the

prosisions of art. 3 from Order ANRE no. 44/2007;

� on the centralized Day Ahead Market (DAM), at the market clearing price

When selling E-RES on DAM:

� E-RES has priority on the electricity market transactions;

� if its E-RES is not accepted during a certain dispatch interval (the generation-consumption is

balanced only through bilateral contracts), the E-RES producer submits physical notifications for imba lance and receives the price set up for such situations.

7.5. The E-RES promotion system in Romania Who benefits from the promotion system? E-RES produced from wind, solar, geothermal, biomass energy , waves, hydrogen as well as the electricity produced in hydro power units with installed power less or equal than 10 MW, put into function or modernized starting with 2004.

Which elements the promotion system consist of? Romania has adopted the mandatory quota system combined with the trade system with minimum and maximum price limits legally set up for the green certificates.

What does it mean mandatory quota? For each year between 2005 and 2020, the mandatory quota for E-RES the electricity suppliers have to comply with are set up by law.

The electricity suppliers demonstrate the compliance with the quota system by the number of green certificates they buy each year. This number has to be equal to the mandatory quota value multiplied by supplied electricity quantity.

In case the suppliers do not comply with the annual mandatory quota, they will pay to the TSO 70 Euro for each green certificates they were unable to buy.

- 59 -

Legal framework Primary legislation on RES

The Electricity Law no. 13/2007, with the subsequent amendments:

GD no. no.1069/2007 regarding the approval of the National Energy Strategy for 2007-2020

GD no. 443/2003 regarding the promotion of electricity produced from renewable energy sources

GD no. 1429/2004 regarding the approval of the Regulation of guarantee the origin of electricity produced from renewable energy sources

GD no. 1892/2004 regarding the system for promotion of electricity produced from renewable energy sources

GD no. 958/2005 in order to modify GD no. 443/2003 regarding the promotion of electricity produced from renewable energy sources and to modify and complete GD no. 1892/2004 regarding the system for promotion of electricity produced from renewable energy sources

GD no. 750/2008 for the approval of the regional state aid scheme for exploitation of the renewable energy sources

GD no. 1661/2008 regarding the approval of the National Programme for increasing energy efficiency and using the renewable energy sources in public sector in 2009-2010

Law no 220/2008 to set the promotional system for production of energy from re newable energy sources*

The provisions of the Law no. 220/2008 considered to be or susceptible of state aid will enter into force after receiving the authorization decision from the European Commission.

Secondary legislation on RES

The Procedure for monitoring the issuance of the guaranties of origin, approved by ANRE Order no. 23/2004

The Regulation of organisation and functioning of the green certificates market, approved byANRE Order no. 22/2006

The Procedure for allocation the amount of money collected from the suppliers for quota non-complience, app roved by ANRE Order no. 62/2009

ANRE Order no. 44/2007 for establishing the manner of commercialization of the electricity produced from renewable energy sources in units qualified for priority produc tion

Procedure for monitoring the green certificates market, approved by ANRE Order no. 38/2006

The Regulation for qualification of the electricity priority production from renewable energy sources, approved by ANRE Order no. 39/3006

- 60 -

7.6. Green certificates – obtaining and selling GC are issued by TSO according to the Procedure of issuing the green certificates ,

approved by ANRE.

GC are issued following the producer’s request and after he obtains the qualification certificate for priority production from ANRE

The E-RES power units for priority production are qualified:

- annually

- for the entire E-RES production

- for the entire capacity

The E-RES is qualified as uncontrolled priority production except:

- the E-RES produced from biomass

- the E-RES produced from geothermal sources

- the E-RES produced from hydro sources from power units with at least 1 day control on the water flow

The E-RES producers receive monthly from TSO one green certificate for each MWh of electricity delivered into the network. The green certificates are allocated based on the data supplied by the network operators the producers are connected to.

The E-RES producers may sell the green certificates:

- within bilateral contracts to electricity suppliers, at negotiated p rices;

- monthly, on the centralized market of green certificates, organised and administrated by the green certificates market operator.

The price for traded green certificates must be comprised between the minimum and maximum values.

Between 2008 and 2014, the minimum and maximum prices for green certificate are 27 Euro/ certificate and 55 Euro/ certificate, which are calculated at medium exchange rate from Romanian National Bank for December in the preceding year.

7.7. Institutions involved and responsabilities ANRE

� Monitor the development and the functioning of the green certificate market

� Allocate the amount of money collected from the suppliers for quota non-compliance, resting

on a specific procedure

- 61 -

6

TSO:

� Issue on monthly basis the green certificates;

� Inform on monthly basis the E-RES producers, ANRE and the green certificates market

operator about the producers receiving the GC and their hierarchy ;

� Invoice and collect the money from the electricity suppliers not complying with their

mandatory quota;

GCMO:

� Publish annual prognosis of national offer and demand of green certificates;

� Register the bilateral contracts and the information concerning the transactions between the

E- RES producers and electricity suppliers;

� Create the GC Register and keep it up -to-date;

� Register the participants to the green certificates market;

� Ensure a proper functioning of the green certificates market;

� Publish on monthly basis the cumulated demand and offer of green certificates from

the

beginning of the year;

� Send a monthly report to ANRE regarding the evolution of green certificates market.

Distribution operators:

� Send to the producers on monthly basis the E-RES quantities supplied by these in the network

7.8. Other useful information The primary and secondary legislation dedicated to E-RES may be found on the

ANRE website, www.anre.ro , on Renewable energy sources.

Information on electricity prices on DAM may be found on the OPCOM website, www.opcom.ro .

Information on the issuing procedure of green certificates may be found on the TSO website www.transelectrica.ro .

Information on specific procedures regarding the functioning of the green certificates

- 62 -

market may be found on the green certificates market operator website (GCMO), www.opcom.ro .

Following the official request to ANRE, the E-RES producer receives guarantees of origin for the E-RES supplied in the network.

Reccomendations

For learning more about trade mechanisms of the priority production, y ou may find useful information in the Commercial Code of the wholesale electricity market, appro ved by ANRE Order no. 25/2004.

You may find important primary data necessary for starting up and building an investment in renewable energy sources (for example wind velocity or solar radiation in Romania) by getting in contact with the National Meteorological Administration or the research institutes in energy sector.

Mandatory quota* set up by Law no. 220/2008

*Mandatory quota – annual percentage of the gross national electricity consumption, in a progressive dynamic for complying with the national target on 2020

- 63 -

Glossary of terms

Annual demand of green certificates – the number of green certificates corresponding to the legal annual quota. This demand is obtained by multiplying the mandatory quota with the gross national electricity consumption of that year.

Annual GC offer – the number of green certificates issued by the TSO during a year.

Bilateral market of green certificates – the bilateral contracts negociated between E-RES producers and electricity suppliers, designed for selling/buying of the green certificates

Centralised market of green certificates – legal framework for trading the GC between market participants, organised and administrated by SC OPCOM S A, based on specific rules

Day Ahead Market – centalised market for selling and buying el ectricity which is administrated by SC OPCOM SA

Distribution operator – operation entity owning, operating, maintaining and developing the electricity /thermal distribution network

Electricity market operator – legal entity ensuring the trade for the electricity quantities on the electricity market, which determines the prices on the Day Ahead M arket. The electricity market operator is SC OPCOM SA

Electricity network – all the electricity lines, including their support and protection elements, the sub-stations and other electric power equipment connected to each other. The electricity networks may be a transmission network or a distribution network

Electricity produced from renewable energy sources E-RES – electricity produced by plants using only renewable energy sources, as well as the proportion of electricity produced from renewable energy sources in hybrid plants also using conventional energy sources and including renewable electricity used for filling storage systems and excluding electricity produced as a result of storage systems.

Electricity supplier – Legal entity, possesing a supplying license, which trades electrici ty on the electricity market

Green certificate – document proving that 1 MWh of electricity is produced from renewable energy sources and supplied into the electricity network. The green certificate may be traded on the bilateral contract market or the centralised market of the green certificates, separately from the associated electricity quantity

Green certificates market operator – legal entity ensuring the trade of green certificates which also determines the prices on the centralised market of the green certificates. The operator of the green certificates market is SC OPCOM SA

Imbalance physical notification - a physical notification with production, import and received contractual exchanges not equal to consumption, exports and supplied contractual exchanges of the market participant

License – technical and legal document, issued by ANRE that grant to a Romanian or foreign private/legal entity the permit to trade the electricity and cogen electricity or to deliver services needed by the coordinated operati on of the national energy system.

- 64 -

Mandatory quota system – system for promotio n the E-RES, meaning electricity suppliers buying mandatory E-RES quota for selling it to their clients

Market clearing price – the price which the transactions on the day ahead market are concluded at, in a certain trading zone, during a certain trading interval

Modernized power plant – power plant where it took place a set of works which leads to an increase of the technico-economical and environmental characteristics of at least 30% from the replacement value of the plant.

Network operator – the distribution operator, the transmission and system operator – TSO.

Priority production – the elec tricity qualified production of a producer/ generation configuration, for which preferential sale rights are granted

Renewable energy sources – renewable non- fossil energy sources (wind, solar, geothermal, wave, tidal, hydro- power, biomass, landfill gas, sewage treatment plant gas and biogases)

Setting-up autorization – technical and legal document issued by ANRE, which, as a result of the application formulated by a Romanian or foreign private/legal entity grants it the permit to develop or refurbish and to operate installation for transmission, distribution and generation of cogen electricity and thermal power.

Transmission and system operator – legal entity, possesing a transmission and ancillary services license. The TSO is CN TRANSELECTRICA SA

- 65 -

8. Alternative SHP (TUG)

8.1. Hydrodynamic screw Hydrodynamic screws are reverse arranged Archimedes screws. Water runs down the spiral of the screw and the induced rotational movement is transformed in electrical energy by a generator. To enable the movement of the hydrodynamic screw the initial rotation have to be initialized by a separate motor. The necessary energy to initialize the first rotation of the hydrodynamic screw decreases the total energy production of the hydrodynamic screw. The reverse arrangement of the hydrodynamic screw is already traditionally used in wastewater management and water management. In this case the water is pumped from the bottom up to the top, due to the slow rotation of about 20 Rounds/min.

Figure 31 – Scheme of a hydropower snail (Ritz-Atro GmbH, 2010)

The main difference between the hydroelectric turbine and the hydrodynamic screw is the simple installation at an existing weir. In Austria hydrodynamic screws are in the majority of chases installed at diversion plants to use the minimum instream flow (MIF) at the weir for hydropower production. At higher flow rates turbines are more efficient as hydrodynamic screws. Hydrodynamic screws can be passed downstream without much harm by fishes. But they do not voluntarily pass the spiral, they instinctively avoid it.

Technical information For the installation of a hydrodynamic screw at a weir, an useable discharge (e.g. MIF) of 200l/s to 5500 l/s and enough space for the screw with generator is necessary. Most of these requirements

- 66 -

are available in existing hydro power plants. The maximum discharge per hydrodynamic screw is limited to approx. 5,500 l/s. In cases of higher discharge a serial arrangement of the screws is possible. The maximum gross head of approx. 10 m should not be exceeded. Hydrodynamic screws reach capacities of up to 300 kW. The maximum efficiency factor is about 90%, with the great advantage of this type of energy production, that the efficiency is rather constant at a flow rate of approx 30% (Ritz-Atro GmbH, 2010).

Figure 32 – Efficiency factor for hydrodynamic screws (Ritz-Atro GmbH, 2010)

8.2. Case studies hydrodynamic screws

Hydrodynamic screw in Kindberg The hydrodynamic screw of the E-Werk in Kindberg/Austria is situated at the orographic right bank of the river Mürz and uses the minimum instream flow (MIF) for energy production. Additionally to the installation of the hydrodynamic screw a fish pass was built at the weir.

- 67 -

Figure 33 – Kindberg – Hydrodynamic screw (left), hydrodymanic screw with fish pass (right) (Sonnweber, 2009)

Hydrodynamic screw in Niklasdorf In Niklasdorf/Austria the paper mill Brigl & Bergmeister also decided to use the MIF for energy production. The weir was rehabilitated and one hydrodynamic screw on each side of the river bank was installed. The two screws are now operating in parallel.

Figure 34 – Structure with a hydropower screw – Niklasdorf (Sonnweber, 2009)

- 68 -

Facts of the hydrodynamic screws

Kindberg Niklasdorf 1 Niklasdorf 2 Usable flow (l/s) 5000 3600 (4000) 3600 (4000) Height (m) 3.7 3.9 3.9 Length of the hydrodynamic screw (m) 19 10.24 10.63 Slope of the hydrodynamic screw (°) 21 22 22 Diameter of the hydrodynamic screw (m) 3.6 3.2 3.2 Number of revolutions variable constant constant Number of revolutions (U/min) 21 (16-26) 22 22 Capacity : calculated (kW) 142 132 132 Capacity : actually (kW) 142 132 132 Year of installation 2008 (august) 2008 (spring) 2008 (spring)

Total cost of the plant (EUR) 400,000 200,000 + 600,000

200,000 + 600,000

Table 5 – Facts of the hydrodynamic screws (Johanna Sonnweber, 2009)

8.3. Drinking water plants in drinking water networks Many areas in Austria are appropriate in geographical terms for the supply area, so that there are usable energy potentials. Between the source catchment and the consumers it has often to overcome several hundred meters height difference. The resultant gap energy has to be converted in pressure reduction stations, and dissipated, so that the water can be initiated harmless in the elevated tanks. Suitable sites for drinking water plants are not only found in the mountains, where between source catchment and drinking water container occur large height differences, but also in lower layers. Already 50m pressure head and 500 l/min discharge may be sufficient for economic power production. Eligible cannot just be spring water lines, but also interconnections between different pressure zones. In this case, the turbine is replaced, for example, the pressure reducing valve (AREAM, LEV, OCEN, Rhônalpénergie-Environment,1998). It is therefore obvious to convert this energy by installing a turbine with a connected generator to electricity. The energy generated by this way can be used for domestic consumption, making the water supply more economical, because energy costs make up just a significant proportion of the operating costs. Electricity not required for power consumption can be fed into the public electricity supply system. How many drinking water plants are in operation in Austria is not yet statistically recorded. In Tyrol could be at least at 30 to 40. Also in Vorarlberg, a number of 10 to 15 are located (Papp, 2008). In particular, drinking water plants are becoming increasingly important. In a turbine project used on a water system, the existing drinking water supply system generally does not undergo any major modification. In order to more efficiently exploit the energy, it is sometimes necessary to reinforce the conduits themselves. Instead of conventional turbines also a pump can be used as a turbine. The expected "yield" of an existing hydropower potential is often too small to recoup the cost of an expensive "real" water turbine. Here comes a back running centrifugal pumps to mind. The Figure 8 below shows a typical turbine installation on drinking water supply system:

- 69 -

A water network can be divided into three separate parts: Catchment of the sources bringing the water to the collection chamber

Routing (conduit), transporting the water to the reservoir

Bringing the water into the distribution system

Figure 35 – Drinking water supply system (AREAM, LEV, OCEN, Rhônalpénergie-Environment,1998).

Hydroelectric installations are mainly located on the water supply systems, there where it is necessary to limit the water pressure, either by replacing the “forebay” or at the entry to the reservoir, or finally, at the entry to the drinking water production units.

Main advantages Compared with a conventional hydroelectric plant, the production of electricity on drinking water supply routing systems has many advantages. Cost saving (Building and pressure pipe are usually widely available)

Environmentally friendly energy production (Green Electricity )

No intervention of nature

Drinking water is flowing pressure free into the elevated tank (Saving of a pressure reducing valve)

Low maintenance costs

The drinking water quality remains unaffected.

High efficiency through optimal adjustment of the turbines and generators

Robust design

Easy and fast installation

- 70 -

For the environment Since it does not require the construction of heavy hydraulic structures, the environmental impacts of hydroelectric facilities on drinking water supply systems is close to zero: As to the visual and landscape aspects, the pressured pipeline of the drinking water network

has already been installed, so no heavy infrastructure needs to be specifically built.

In the same way, there is no additional disturbance of the aquatic ecosystem due to the energy exploitation of an existing water network.

The noise impacts are relatively low and can easily be controlled by traditional sound insulation systems.

Finally, with regard to any impact of the hydroelectricity facility on drinking water quality, no major problem has risen except for an increase in aeration following the passage of the water. The hydroelectricity facility brings no chemical pollution into the water. Nevertheless, it is possible to take a few additional precautions, using a food-processing facility lubricant in the bearings and / or installing sealed bearings on the turbines (AREAM, LEV, OCEN, Rhônalpénergie-Environment,1998).

Financial aspects The other major advantage of this type of facility, in comparison with a conventional hydroelectricity plant, is economic. This is because, by using an existing water supply system, it is not necessary to build a specific hydraulic infrastructure, which makes it possible to considerably increase the project’s economic profitability. The production of energy which is both clean and renewable, through the use of hydraulic force, is undeniably a good idea. But producing such energy without adversely affecting the landscape and the ecosystem, while considerably reducing the investment which is usually linked to this type of infrastructure, is even better. Today this is possible thanks to the production of electricity on drinking water supply systems (AREAM, LEV, OCEN, Rhônalpénergie-Environment,1998).

8.4. Examples of Drinking Water plants

Drinking water plant Mauer (Vienna) At the end of the Second Vienna “Hochquellenwasserleitung” (aqueduct) currently a part of the total water is initiated in the transport and supply network of a lower pressure zone. At the same time surplus energy (slope difference) is dissipated mechanically by hydraulic control valves. The installed capacity of this power plant is 400 kW. This can generate clean electricity annually to an extent of about three million kWh. At the same time this amount provides 1,000 households, and saves the environment thereby about 2,000 tons of CO2 (Kleinwasserkraft Österreich, 2005).

- 71 -

Figure 36 – Drinking water plant Mauer (Vienna) (Kleinwasserkraft Österreich, 2005 and Papp, 2008)

Source supply from the Mühldorfer ditch and construction of a water power plant for Kolbnitz (community Reißeck) – Carinthia The spring supply and the drinking water plant are a joint project of the municipality Reißeck and the Verbund Hydro Power (VHP). According to a final agreement costs and income were strictly regulated. Accordingly, the VHP is largely due to the costs for the construction of the drinking water power station and the community the costs of the source catchment and the source leads. In return, the municipality will receive free on perpetual duration, the bubbling of the VHP's own sources of potable water to an extent of 35 l/s and the VHP attract endowments of the electricity revenue from the electric generating plant in drinking water. Owner of the entire plant is the municipality Reißeck. In the area of the Mühldorfer See weir, the existing drinking water sources is taken at a height of 1290 m asl. and sent through pipelines to the plant. This is close to the existing elevated tank Mitterberg at a height of 81 m asl. Thereby the gross head of the plant is 474 m. With a turbine output of 30 kW 250,000 kWh can be produced per year. The drinking water plant consists of the horizontally mounted, single-nozzle Pelton turbine with a bypass, shut-off valves, and asynchronous generator, including 400-V switchgear. The energy dissipation occurs over a 700 m long 400-V underground cable to the VHP-pumping station Hattelberg. The constant discharge flows after passing the turbine into a collection tank, and - as needed - over a deacidification filter either in the existing drinking water network of the village.

- 72 -

Figure 37 – Spring area in the Mühldorfer ditch (left), 380kW drinking water turbine (right) (Verbund, 2006)

Drinking water plant and reservoir - St. Katharein The height difference of 225 m between the reservoir Lercheck and the valley floor St.Katharein on the river Laming demanded the establishment of a pressure-reducing station. This task is taken over by the drinking water plant (ZWHS, 2010). The reduction of the water pressure of 22 bar in the transport pipeline to the water pressure in the reservoir of 0.4 bar at a flow rate of 200 l/s allows the production of electrical energy. Every year about 2900 MWh are fed into the electricity grid (STEWEAG – STEG). Plant parts and their functions (ZWHS, 2010): Transport pipe DN 500 mm from Lercheck-reservoir.

Power plant with two nozzles and with horizontal axis free-jet turbine (Pelton), direct coupled synchronous generator, and a stilling chamber.

Bypass with jet nozzle and stilling chamber as a pressure reduction if the turbine stops operation (faults, maintenance and at power failure).

20 KV high voltage space - Plant

Transformer room with the transformer for the lashing of the generated electrical energy.

The reservoir has a calm pool and two water chambers, each 500 m³ storage volume. The discharge is controlled by the water level.

Transport pipe DN 700 mm to the discharge points in Kapfenberg and Bruck / Mur and the reservoir Hansenhof Bruck / Mur.

Figure 38 – Drinking water plant, Pelton-Turbine (ZWHS, 2010)

- 73 -

8.5. SHP in combination with snowmaking systems (“Beschneiungsteiche”)

Pioneering project in Rauris – Pinzgau/Salzburg The Rauris Hochalmbahnen invested 3.5 million EUR in the further expansion of the snowmaking system in the area “Hochalm” in Salzburg, which is completed and operational since the summer of 2008. In the area of the “Hochalm” the Rauris Hochalmbahnen built a reservoir with a capacity of 65,000 cubic meters of water. The water is used not only for snowmaking, but also for the production of electrical energy for the operation of the cable cars. The reservoir is located 1800m asl. The headrace from the reservoir to the turbines is installed at the edge of the ski run underground. The generator produces 250 KWh at full water level. The SHP feed each year 1200 MWh into the electricity supply system, just as high as the annual consumption of Hochalmbahnen (Bayer H., 2008).

9. Numerical procedures for river system optimization The operation concept of hydropower plants is often restricted to the specific hydropower plant and does not include the whole river system. In most cases there are more than one HPP in the river. The HPPs have often different operators, different age and different installations, equipment and devices. In case of chains of hydropower plants a water management concept to optimize the operation processes is required. Individual operation processes such as opening and closing the gates in case of flood create surge and anti-surge waves. The waves induce unsteady flow conditions and affect the operation of the hydropower plants downstream. Uncoordinated flushing processes can result in the deposition of sediment in downstream HPPs which haven’t been flushed (Edelsbrunner & Friess, 2008). A river system optimization is able to smooth the flow conditions by flood operation or flushing. The coordination of the opening and closing the gates can also minimize the dead time of the HPP and increase the efficiency of the chain of HPPs. To optimize the operation of a chain of HPPs the use of a numerical model is required. In case of straight river reaches or mainly uniform river sections a one-dimensional model is entirely sufficient. The geometrical data of the project area is the base of a numerical model. The accuracy of the geometrical data is an uncertainty factor in the numerical simulation. After implementation of the geometrical data the geometry of the weirs, the boundary conditions and the different discharge-water level functions have to be defined in the model. The calibration of the numerical model with field measurements such as ADCP data or water level data is highly recommended. When the model is calibrated it is possible to model different discharges and optimize the operation, the flushing process or the operation in case of flood to cut the flood peak.

- 74 -

9.1. Case Study Pöls The case study Pöls examined the situation of a chain of small hydro power plants along the Pöls river in Styria. As a first step, data on the twelve plants was collected from the operating companies and water law notifications of the Styrian provincial administration, which was used to compile a review of current situation. The project area extends over approximately 30 km along the Pöls river (Figure 39).

Figure 39 – Map of the project area with the 12 small hydro power stations

In this area are the twelve small hydro power plants located. They were built between the years of 1888 and 2004 and are very different in terms of construction, function and management (Figure 10). Due to independent management of the plants, necessary reservoir flushing leads to anti (negative) surges that affect the operations of the SHPs downstream.

- 75 -

Figure 10 – Typical SHPs in the project area

Coordinated and optimized reservoir operations was expected to improve the situation after reservoir flushing and floods by levelling the ensuing surges. To simulate the unsteady flushing and flood operations, a one-dimensional numerical model of the project area was created (Figure 11). This model allowed the simulation of the increase and decrease of storage water levels along the river.

- 76 -

Figure 11 – Threedimensional view of the weir Katzling in the numerical software HEC-RAS

The aim of the thesis was to provide workable alternative models for flow conditions based on an evaluation of the current situation. The main parameters of the unsteady calculation were the start time of opening and closing the gates as well as the duration of both. Special emphasis was placed on flushing models for use during snowmelt in spring, as this condition allows the best possible desedimentation results (Edelsbrunner & Friess, 2008). The main results of this project are: the coordination of the chain of SHPs is necessary;

longer time period between opening and closing the gates in case of flushing;

flushing just in case of sufficient discharges;

no flushing in case of small flood events (< 0,5 x 1-year-flood);

implementation of a flushing management plan for different water levels.

Figure 12 shows the optimization of a flushing event in the project area.

- 77 -

Figure 12 – Optimization of a flushing event

Through the fact that the purpose of reservoir flushing is the remobilization of the sediments that were trapped during longer periods of time, flushing leads to a higher sediment concentration in the downstream section of the river. This concentration could be harmful to the downstream ecosystem (e.g. fish). Therefore reservoir flushing programs often require extensive regulations and monitoring (Harb, 2011). In this current case study the numerical software HEC-RAS was used. Needless to say that there is a large number of software packages to handle such cases. The specific software should be chosen according to the geometrical data, the specific river section and the area of interest.

- 78 -

10. Methodologies to improve kinetic turbines implementation

Floating micro hydro power plants are of special interest. In terms of costs, floating micro hydro power plants are efficient because they do not include essential costs related to civil engineering. The conceptual scheme of these micro hydroelectric power plants is shown in Fig.43.

Figure 43 – Floating micro hydroelectric power plant with water wheel

The water wheels or the open hydro turbines (usually, with propellers) are used as working body. Next the most representative examples of small flow hydropower plants with different working bodies will be considered.

Floating micro hydroelectric power plant with three bladed rotor Figure 44 shows the diagram of generated power dependence on the water flow velocity and rotor diameter. Despite its reduced efficiency the described micro hydro power plant gains by its design simplicity and reduced cost.

- 79 -

Rotor diameter

Speed of water current (m/s)

Figure 44 – Diagram of generated power dependence on the water flow velocity.

Floating micro hydroelectric power plant with Gorlov turbine A special interest presents the hydraulic turbine, invented by A. Gorlov (mechanical engineering professor at the Northeastern University in Boston (USA)). According to A. Gorlov, 90% of the kinetic energy of water is in areas where dams cannot be built. He says his turbines are ideal for these areas with water and tidal currents, for which conventional hydropower is too expensive. The Gorlov turbines achieve a high conversion coefficient of hydraulic energy up to 35% (theoretically, this ratio is 0,59 - Betz coefficient). Turbines with 1 m diameter and 1 m height can be installed in large numbers along the coast, without harming fish populations. The Gorlov turbine (Fig. 45) was developed based on the Darrieus turbine, invented for the wind energy conversion in 1930. It has several advantages: simple construction, low cost, estimated at about $ 400-600 for 1 kW power - less than the construction of hydroelectric dams systems, and practically does not generate noise. These turbines can be connected in series. Four Gorlov turbines were tested at Cape Cod, and a 5 kW system has been installed, which generates sufficient electricity to supply a nearby motel with 14 rooms, in the zone of ebb in Vinalhaven, Maine. Another test took place in a region of the Amazon River, where turbines have been used to charge car batteries used for TVs.

- 80 -

a. b.

Figure 45 – Helical turbine, invention by de A. Gorlov.

Floating micro hydroelectric power plant with Davis turbine The Davis hydraulic turbine is of special interest. In 1984 a small hydro power plant with Davis hydraulic turbine and vertical axis was designed and tested on the Harbour River, Nova Scotia, (Fig. 46, a); it produced 100 kWh. The Davis turbine consists 4 blades with hydrodynamic profile, fixed rigidly of on the rotor (Fig. 46,b). The rotor is coupled through a coupling to the multiplier input shaft (planetary gear of speed multiplication). The power generator is mounted on the multiplier output shaft. All nodes are mounted on the platform that is fixed on two pontoons.

a. b.

Figure 46 – Micro hydro power plant with Davis turbine

To obtain electricity from the kinetic energy of the running water a similar construction of the Davis turbine was built and tested in Florida Bay (Fig. 47) in 1985. The obtained power was 5 kW. The project was funded by Nova Energy Ltd company, Texas, and was called the Davis turbine VEGA–

- 81 -

I. The turbine was operating at a 65 m depth, in order to impede its collision with large cargo ships. To get more power several Davis turbines were joined in modules (blocks) mounted vertically or horizontally. Thus it was possible to obtain a summary power range of the kinetic energy of running river water from 5 to 500 kW and a 200-8000 MW power – from the kinetic energy of the ocean water. Figure 47 a, b shows the computer models of the Davis turbine modules of 7-14 MW power - for oceans and of 250 kW power - for rivers.

a. b.

Figure 47 – Computer models of Davis rotor modules: a – for oceans; b – for rivers

Figure 48 shows the installation of the Davis turbine in Florida, USA.

Figure 48 – Davis turbine mounting in Florida Bay

Floating micro hydroelectric power plant with horizontal axis and multi-blade turbine Micro hydropower plants with horizontal axis turbines are more efficient for some shallow water rivers. Micro hydropower plant with horizontal axis (Fig. 49) was developed at Krasnoyarsk State Technical University, Russia, and is designed to convert the kinetic energy of running river water into electricity. The micro hydropower plant can operate efficiently with other energy sources (e.g. diesel power plant), reducing drastically the consumption of fuel or replacing it by other in the case of emergency. The key hydrological parameters that ensure the efficient operation of micro hydropower plants are the following: the range of water flow velocity for river depth of, at least, 1,5 m; the segment width for this depth of rivers at least 10 m. The outlet power of river water flow velocity between 1,8–2,5 m/s is from 10 to 30 kW, for three phase direct current voltage 220/380 V

- 82 -

with 50 Hz frequency. The dimensions of submersible micro hydroelectric power plant: length – 5 m, width – 3 m, height – 2 m. The turbine type: horizontal sectional, each section having two blades with hydrodynamic profile rigidly fixed on the main shaft. Each section is fixed on the main shaft with a certain angular retardation. In front, two nozzles are fixed on both sides of rotor. The main shaft is installed on the structure of resistance.

Figure 49 – Submersible micro hydro power plant with horizontal axis.

Floating micro hydroelectric power plant with horizontal axis and propeller turbine Another type of floating micro hydropower plants having a new principle of operation is the micro hydroelectric power plants with helical turbine. One of the first works is a report on a prototype of horizontal axis turbine developed by Harwood (1985, National Institute of Amazonian Research (INPA). It used two propeller turbines with a 4 m diameter, mounted in the nozzle. For micro hydro power plant equilibrium, the turbines are made with rotation in opposite directions. The rotational movement of the turbines is summed and transmitted through a multiplier system to the electric generator. The turbine housings are rigidly fixed on a metal construction, which in its turn is rigidly installed on two pontoons. The micro hydropower plant is anchored to the river. This equipment has been tested in areas of the Amazon River at water speeds between 0,7 to 1,5 m/s. The floating micro hydropower plant has two multi-blade turbines mounted in the nozzles. The rotation of turbines in different directions ensures stability to the micro hydropower plant. Based on this principle, the engineers from the Scientific Research Institute in Novosibirsk, Russia, manufactured a micro hydropower plant with two propeller turbines (Fig. 50). The micro hydropower plant contains a floating movable structure, which can be easily moved throughout the riverbed when the water level changes and, as well, improve the turbine efficiency on the basis of a more efficient use of the running water energy. The micro hydropower plant contains a platform on which the following components are rigidly fixed: the generator; the housings of the propeller turbines with the nozzles; the floating bodies in the form of pontoons mounted to the platform; the lifting and sinking mechanism of the propeller turbines. The testing of this construction was carried out on the rivers in Altai and Iakutia, Russia, during a whole season. The tests have shown good efficiency, technical characteristics, operation and installation simplicity.

- 83 -

Figure 50 – Floating micro hydropower plant.

Micro hydroelectric power plants integrated with other renewable energy conversion systems

One of the most common applications of alternative energy is power supply of isolated consumers: a vacation house or cottage, a motel or other social objects, located in an area without access to the public grid. To ensure fully the electricity needs, micro hydro power plants are often integrated into a complex energy system that includes both renewable energy conversion systems (wind, solar, thermal, biomass, hydrogen, etc.) and conventional energy systems (diesel and gas stations, etc.). Integration can be done in two ways: integration into a single power system of several renewable energy conversion systems (wind, hydro, solar, etc.); creation of joint operating energy facilities (e.g., the main shaft, which is linked to power generator, is driven by both a wind turbine and a hydraulic turbine). Their combined use is always possible. Fig. 51 shows a modern cottage, which energy needs are satisfied by an integrated complex system, based on the use of hydraulic, solar and wind energy. It is difficult to imagine a modern cottage or a motel located in an inaccessible location without refrigerator, television, lighting, hot water, stereo, microwave and other essential elements of a comfort level requirements.

Figure 51 – Modern cottage with a power supply complex system.

- 84 -

Renewable energy technologies are intermittent in nature, so they are not constantly available. Solar energy is not available at night. Wind stations will stop in the lack of wind. Although micro hydro power plants are the most reliable renewable energy source, they also depend on the water flow rate, which is dictated by multicriteria optimization considering the following variables:

– Irrigation; – Navigation; – Flood control; – Recreation; – Energy demand.

It is therefore appropriate to integrate renewable energy conversion systems. Globally, some activities have been initiated with limited scope for the exploration of associated purposes with the operation of integrated hydro-wind power. The results obtained from the growing number of pilot studies and investigations, and the synthesis of best practices is being enriched in this respect. The lessons learned in the past can now be investigated for future projects. In some cases, where hydropower is not widely applicable because of environmental reasons, micro hydro power plants serve as buffer systems in ensuring electricity for short and medium terms to compensate energy fluctuations and service costs, and to increase the economic value of electricity delivered. There have been discussed opportunities for hydropower large-scale integration with the wind and solar energy, but they have not been quantified, yet.

11. Conclusions

Conclusions (UL)

The report gives an overview of hydropower implementation focused on small hydropower plants from the basic viewpoints: legal, technical and economic. The report has been made within the project SEE Hydropower and gives a detailed insight and can serves as a basis for any further project activities, where the objective is to improve the efficiency of SHP implementation in the entire process – from identification of technically usable potentials, consideration of environmental aspects, integration into space and granting of water rights to efficient implementation, operation and monitoring. For easier decision making on any further phases of the project, the report discusses the basic problems and obstacles in the field of SHP implementation focused to the Slovenia.

The report also discusses and gives a proposal for establishment of a common platform with different analytical tool development and their application, which will serve all stakeholders in the process of decision making. Compare to other already established cadastres for SHP opportunities Slovenia has not common approach to water right granting. Namely according to the regulations water is a public good, that why water right (concession) granting for more extended economical exploitation, where also hydropower water use is placed, is a subject to the public tender procedure. This particularity is also the main reason why strategic approach has to take place in Slovenia, where a recognition of significant feasible ecological hydropower potential must be proceeded to avoid poor hydropower exploitation.

- 85 -

12. References References (UL) Agencija za prestrukturiranje energetike d.o.o. (APE) 2007, Analiza spodbujanja skozi »feed-in« sisteme, http://www.mg.gov.si/fileadmin/mg.gov.si/pageuploads/Energetika/Porocila/Spodbude_Feed-in_APE.pdf, Purchaser: Ministry of Economy of Republic of Slovenia Alterach, J., Peviani, M., Davitti, A., Vergata, M. (RSE), Ciaccia G. (AEEG) in Fontini F. (University of Padova), 2008, “Evaluation of the residual potential hydropower production in Italy” – HIDROENERGIA 2008 Alterach, J., Peviani, M., Davitti, A., Vergata, M. (RSE), Ciaccia, G. (AEEG) in Fontini, F. (University of Padova), 2009, “Evaluation of the remaining hydro potential in Italy” – The international Journal of Hydropower & Dams, Volume Fifteen, Issue 5, 2009 Eshenaur Walter, 1984, Understanding Hydropower, ISBN: 0-86619-205-0, Volunteers in Technical Assistance ESHA, 2004, Guide on How to Develop a Small Hydropower Plant, Evaluation Unit DG Regional Policy European Commission, 2004, Guide to cost-benefit analysis of investment projects Government of the Republic of Slovenia, 2008, Decree on criteria for determination and on the mode of monitoring and reporting of ecologically acceptable flow), OG RS no. 89/2008, competent authority for preparation: Ministry of Environment and Spatial Planning Government of the Republic of Slovenia, 2009, Regulation on the way of defining and accounting of fee to assure support to production of electricity from cogeneration with high efficiency and from renewable sources, OG RS no. 2/2009, competent authority for preparation: by Ministry of Economy Government of the Republic of Slovenia, 2009, Decree on Support for Electricity Generated from Renewable Energy Sources, OG RS no. 2/2009, competent authority for preparation: by Ministry of Economy Haas, R., et al., 2010, How to promote renewable energy systems successfully and effectively. In: Energy Policy, 32 (6), 833-839 Jurij Čadež, Problematika umeščanja malih hidroelektrarn v prostor, http://www.gorenjske-elektrarne.si/Izobrazevanje/Strokovni-clanki/Problematika-umescanja-malih-hidroelektrarn-v-prostor Ministry of Economy, 2009, Methodology for determining reference costs of electricity generated from renewable resources, http://www.mg.gov.si/fileadmin/mg.gov.si/pageuploads/Energetika/Sprejeti_predpisi/Methodology_RES.pdf Ministry of Economy, 2010, Action Plan for RES for period from 2010 to 2020,

- 86 -

http://www.mg.gov.si/fileadmin/mg.gov.si/pageuploads/Energetika/Porocila/AN_OVE_2010-2020_final.pdf Ministrstvo za gospodarske dejavnosti Republike Slovenije (Ministry of the Economy), 1996, Male hidroelektrarne, EGS JP Elektrogospodarstvo Slovenije, Božidar Jerkovič, dipl. inž. Parliament of Republic of Slovenia, 2004, Resolution on the National Energy Programme, OG RS no. 57/2004.

References (RSE)

Alterach J. - Ricerca di Sistema, “Valutazione a livello regionale delle risorse idriche superficiali - Applicazione di procedure di regionalizzazione delle curve di durata delle portate medie giornaliere nell'area montana dall'Adamello al versante meridionale delle Alpi Orobiche” Rapporto GEN21/IDRO/WP 4.1 IDROUSI/Task 4.1.2/Milestone 4.1.2.3, 1 Dicembre, 2005

Alterach J. et al. “Regionalization procedures for the estimation of daily flow duration curves in the Italian Alpine Region” (European Geosciences Union – General Assembly 2006 in Austria, April 2nd-7th 2006 ) Section HS14 Water Management in mountain basins

Alterach J. et al.”Regionalizzazione della curva di durata delle portate nell’area “Adamello – Alpi Orobie” (Università la Sapienza - XXX° Convegno di Idraulica e Costruzioni Idrauliche - IDRA 2006, Rome, Italy, September 10th-15th 2006)

Alterach J., Brasi O., Flamini B., Peviani M. (ERSE) et Gilli L., Quaglia G. (Envitech) – Ricerca di Sistema, “Valutazione della disponibilità idrica e del potenziale di producibilità idroelettrica a scala nazionale e di bacino“ - Rapporto CESIRICERCA Prot. 7000597 (2006)

Alterach J., Davitti A., Peviani M. (ERSE) “SMART MINI IDRO – strumento informatico per la valutazione della fattibilità tecnico-economica di impianti mini idroelettrici ad acqua fluente” Rapporto CESIRICERCA Prot. 08001047 (29.02.2008)

Alterach J., Peviani M., Davitti A., Elli A. (ERSE) “A GIS integrated tool to evaluate the residual potential hydropower production at watercourse scale” - WWC- Montpellier Francia 1-4 sett 2008.

Alterach J., Peviani M., Davitti A., Vergata M. (ERSE), Ciaccia G. (AEEG) and Fontini F. (University of padova) “Evaluation of the residual potential hydropower production in Italy” – HIDROENERGIA 2008 (Bled Slovenia 11-13/6/2008)

Bertacchi p. (ENEL) et al “Indagine sulle risorse idroelettrhcie minore residue nel mezzogiorno d’Italia”, Ricerca promossa dalla CEE, 21 giugno 1982.

Crepon (ISL Ingénieri, France) “Re-assessing French hydropower potential” The international Journal of Hydropower & Dams (Volume Fifteen, Issue 5, 2009)

DRIRE Directions Régionales de l'Industrie, de la Recherche et de l'Environnement, « Evaluation du potentiel hydroeletrique Limousin » ottobre 2005

ESHA – “Guida per la realizzazione di un piccolo impianto idroelettrico”. 2007

ESHA - Report on small hydropower statistics: general overview of the last decade (1990-2001) 36pp. Brussel, 2003

- 87 -

Gestore Sistema Elettrico, 2008. “Statistiche sulle fonti rinnovabili in Italia”. 2009

Peviani M. et al. – Ricerca di Sistema, “Risultati del censimento del potenziale mini-idro e realizzazione del sistema informativo territoriale “ - Rapporto CESIRICERCA Prot. 7000595 (2006)

Peviani M., Alterach J., Brasi O., Maran S. “Evaluation of small scale hydro electricity potential in Italy”, (IAHR 2007 – Venezia)

UNCEM Unione Nazionale Comuni Comunità Enti Montani “Indagine sulle potenzialità di produzione idroelettrica nelle aree montane di Cuneo, Torino e Biella

Water for Agriculture and Energy in Africa “Hydropower resource assessment of Africa” Ministerial conference on water for agriculture and Energy in Africa: the challenges of climate change, Sirte, Libyan Arab Jamahiriya 15-17 Dicembre 2008

References (RO)

Guidelines for the producer of electricity from renewable energy sources (E-RES), ANRE Website, www.anre.ro, version 2009.

References (TUG)

AREAM, LEV, OCEN, Rhônalpénergie-Environment (1998). Europäisches Programm THERMIE – Energieerzeugung in Trinkwassernetzen in Bergregionen.

BMLFUW (Bundesministerium für Land- und Forstwirtschaft, Umwelt und Wasserwirtschaft) (2005). Österreichischer Bericht über die Ist-Bestandsaufnahme, EU Wasserrahmenrichtlinie 2000/60/EG, Wien, März 2005

BMLFUW (2005). Verordnung des Bundesministerium für Land- und Forstwirtschaft, Umwelt und Wasserwirtschaft über die Festlegung des ökologischen Zustands für Oberflächengewässer (Entwurf Qualitätszielverordnung Ökologie Oberflächengewässer – QZV Ökologie OG, März 2010)

Bayer H. (2008). Pionierprojekt in Rauris. Zukunft Winter – Salzburger Nachrichten Verlagsges.m.b.H & Co KG. Saison 2008/09

E-Control GmbH (2010a). http://www.e-control.at/en/businesses/renewables/renewable-electricity-market, status 18.08.2010 E-Control GmbH (2010a). http://www.e-control.at/en/businesses/renewables/support, status 18.08.2010 Edelsbrunner, G. & Friess, J. (2008). Wirtschaftliches Management der Kraftwerksanlagen an der Pöls. Diploma thesis at the Institute of Hydraulic Engineering and Water Resources Management, Graz Technical University.

European Parliament and Council of the European Union (2000). DIRECTIVE 2000/60/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 23 October 2000 establishing a framework for Community action in the field of water policy. Official Journal of the European Communities. L

- 88 -

327. European Parliament and Council of the European Union (2001). DIRECTIVE 2001/77/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 27 September 2001 on the promotion of electricity produced from renewable energy sources in the internal electricity market. Official Journal of the European Communities. L 283. FAO & DVWK (2002). Fish passes – Design, dimensions and monitoring, published by the Food and Agriculture Organization of the United Nations in arrangement with Deutscher Verband für Wasserwirtschaft und Kulturbau e.V. (DVWK), Rome, 2002

Harb, G., St. Haun, S. Ortner, C. Dorfmann and J. Schneider (2011), The influence of secondary currents on reservoir sedimentation – experimental and numerical studies. IAHR Conference 2011, Brisbane, Australia, submitted

Kleinwasserkraft Österreich (2005). Trinkwasserkraftwerk Mauer. Kraftwerk - Ausgabe 9 – 9/05.

Papp E. J. (2008): TrinkwasserkraftwerkeWasserversorgungsunternehmen nutzen ihre Anlagen in zunehmendem Ausmaß auch zur Stromerzeugung. In FORUM GAS WASSER WÄRME Offizielle Fachzeitschrift des Fachverbandes der Gas- und Wärmeversorgungsunternehmungen (FGW) und der Österreichischen Vereinigung für das Gas- und Wasserfach (ÖVGW) 4/2008.

Sonnweber J. (2009). Betriebserfahrungen bei Restwasserschnecken wasserbaulicher Anlagen. Masterprojekt an der TU Graz, Institut für Wasserbau und Wasserwirtschaft. Ritz-Atro GmbH (2010). Hydrodynamic screws – Energy extraction – efficient and fish-friendly, product information, http://www.ritz-atro.de, Stand 17.08.2010 Verbund (2006). Quellzuleitung aus dem Mühldorfer Graben und Errichtung eines Trinkwasserkraftwerkes für den Ort Kolbnitz (Gemeinde Reißeck) – Kärnten. Umwelt- und Forschungsdaten 2005. Forschung im Verbund, Schriftenreihe Band 97. ZWHS - Zentral - Wasserversorgung Hochschwab Süd GmbH (2010). St. Katharein – Trinkwasserkraftwerk und Ausgleichsbehälter. Stand: 2010-08-17. http://www.zwhs.at/home/trinkwasserversorgung/versorgungsanlage (2010) References (MOLD)

Dan Curtis, Going with the Flow: Small-scale Water Power, CAT 1999. Garman P. Water Current Turbines: A Fieldworker’s Guide. Intermediate Technology Publications, London, 1986, 144 pp. Gorlov, A. M., 1995, The Helical Turbine: A New Idea for Low-Head Hydropower, Hydro Rev., 14, No. 5, pp. 44–50. www.nupr.neu.edu/turbine.html http://www.bluenergy.com/public/technology/turbine.html, Davis Hydro Turbine Prototypes, 10.01.2007.

- 89 -

Golovin ş.a. Cerere brevet nr. 2247859 (RU). Pogrujnaia svobodno-potochnaja microelectrostancyija. I.Cl.: F03B13/00, 2005.03.10. http://ecoclub.nsu.ru/altenergy/working/gea.shtm,GidroènergetičeskijAgregat Svobodopotočnoj GÈS, 17.01.2007

- 90 -

www.seehydropower.eu Project Contact Ing. Maximo Peviani maximo.peviani@rse-web.it Telephone: +39 035 55771 (switchboard) Fax: +39 035 5577999

Authors Contact

Ing. Julio Alterache-mail Julio.alterach@rse-web.it

Telephone:+39 0355577641 Fax: +39 035 5577999

Bogdan Popae-mail: popab_234@yahoo.com

Telephone: +40720528266 Fax: +40214029342

Razvan Magureanu

e-mail razmagureanu@ieee.org Telephone: +40214029342

Fax: +40214029342

Saso Šantle-mail: saso.santl@fgg.uni-lj.si

Daniel Kozelje-mail: daniel.kozelj@fgg.uni-lj.si

Franci Steinmane-mail: franci.steinman@fgg.uni-lj.si

Gerald Zenz e-mail: gerald.zenz@tugraz.at Telephone: +43 316 873 6269

Gabriele Harbe-mail: gabriele.harb@tugraz.at

Telephone: +43 316 873 6269

Dulgheru Valeriu e-mail: dulgheru@mail.utm.md

Telephone: +373 22 509 939

Fax: +373 22 509 939