Content displaying: CAPEX

Hydropower

Capital Expenditures (CAPEX)

Definition: Based on EIA (2016) and the system cost breakdown structure described by O'Conner et al. (2015), the hydropower plant envelope is defined to include items noted in the table above.

Recent Trends: Data from the literature, which includes 7 independent published studies and 11 cost projection scenarios within these studies, were reviewed. See the historical and literature review charts below. An attempt is made to identify potential CAPEX reduction for resources of similar characteristics over time (e.g., estimated cost to develop the same site in 2015, 2030, and 2050 based on different technology, installation, and other technical aspects). Some studies reflect increasing CAPEX over time and are excluded from the 2020 ATB based on the interpretation that rising costs reflect a transition to less attractive sites as better sites are used earlier. Literature estimates generally reflect hydropower facilities of sizes similar to those represented in U.S. resource potential (i.e., they exclude estimates for very large facilities). Due to limited sample size, all projections are analyzed together without distinction between types of technology.

For CAPEX estimates represent actual and proposed projects from 1981 to 2014. Year represents the commercial online date for a past or future plant.

Normalized CAPEX acronyms include IEA-ETSAP=International Energy Agency (IEA)-Energy Technology Systems Analysis Program (ETSAP); IRENA = International Renewable Energy Agency; NPD = non-powered dam; NSD = new stream-reach development

Base Year: CAPEX for each plant is based on statistical analysis of historical plant data from 1980 to 2015 as a function of key design parameters, plant capacity, and hydraulic head (O'Connor, DeNeale, et al., 2015).

NPD CAPEX = (11,489,245 × P0.976 × H-0.24) + (310,000 × P0.7)

NSD CAPEX = (9,605,710 × P0.977 × H-0.126) + (610,000 × P0.7)

Where P is capacity in megawatts, and H is head in feet. The first term represents the initial capital costs, while the second represents licensing. Actual and proposed NPD and NSD CAPEX from 1981 to 2014 (O'Connor, DeNeale, et al., 2015) are shown in box-and-whiskers format for comparison to the ATB current CAPEX estimates and future projections.

Estimates of CAPEX for NPDs in the 2020 ATB based on the above equations range from $3,800/kW to $6,000/kW. These estimates reflect facilities with 3 feet of head to more than 60 feet of head and from 0.5 MW to more than 30 MW of capacity. In general, the higher-cost sites reflect much smaller-capacity (< 10 MW), lower-head (< 30 ft.) sites that have fewer analogues in the historical data, but these characteristics result in higher CAPEX. The Base Year estimates of CAPEX for NSD range from $5,500/kW to $7,900/kW. The estimates reflect potential sites with 3 feet of head to more than 60 feet head and from 1 MW to more than 30 MW of capacity. The higher-cost ATB sites generally reflect small-capacity, low-head sites that are not comparable to the historical data sample's generally larger-capacity and higher-head facilities. These characteristics lead to higher ATB Base Year CAPEX estimates than past data suggest. For example, the NSD projects that became commercially operational in this period are dominated by a few high-head projects in the mountains of the Pacific Northwest and Alaska.

Future Years: Projections developed for the Hydropower Vision study (DOE, 2016) using technological learning assumptions and bottom-up analysis of process and/or technology improvements provide a range of future cost outcomes. Three different CAPEX projections are developed for scenario modeling as bounding levels:

  • Conservative Scenario: NPD and NSD CAPEX unchanged from the Base Year; consistent across all renewable energy technologies in the 2020 ATB
  • Moderate Scenario: consistent with the Reference case in the 2016 Hydropower Vision:
    • NSD CAPEX reduced 5% in 2035 and 8.6% in 2050. These estimates are not imposed in the 2020 ATB. There is an ongoing effort to update the cost estimates, and this would support future ATB scenarios.
    • NPD CAPEX unchanged from the Base Year
  • Advanced Scenario: consistent with the Advanced Technology case in the 2016 Hydropower Vision:
    • Low-head NPD/All NSD CAPEX reduced 30% in 2035 and 35.3% in 2050; Low Head NPD is NPD-1 and NPD-2.
    • High-head NPD CAPEX reduced 25% in 2035 and 32.7% in 2050; High Head NPD is NPD-3 and NPD-4.

Use the following table to view the components of CAPEX.

References

The following references are specific to this page; for all references in this ATB, see References.

DOE (2016). Hydropower Vision: A New Chapter for America's Renewable Electricity Source. (No. DOE/GO-102016-4869). U.S. Department of Energy. https://www.energy.gov/sites/prod/files/2018/02/f49/Hydropower-Vision-021518.pdf

EIA (2016). Capital Cost Estimates for Utility Scale Electricity Generating Plants. U.S. Energy Information Administration. https://www.eia.gov/analysis/studies/powerplants/capitalcost/pdf/capcost_assumption.pdf

O'Connor, Patrick W., DeNeale, Scott T., Chalise, Dol Raj, Centurion, Emma, & Maloof, Abigail. (2015). Hydropower Baseline Cost Modeling, Version 2. (No. ORNL/TM-2015/471). Oak Ridge National Laboratory. https://info.ornl.gov/sites/publications/files/Pub58666.pdf

O'Connor, Patrick W., Zhang, Qin Fen (Katherine), DeNeale, Scott T., Chalise, Dol Raj, & Centurion, Emma E. (2015). Hydropower Baseline Cost Modeling. (No. ORNL/TM-2015/14). Oak Ridge National Laboratory. https://www.osti.gov/biblio/1185882-hydropower-baseline-cost-modeling


Developed with funding from the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy.