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How much hydropower income would my system provide?

Hydropower income is slightly complicated. There are several components that make up the total value of generated hydro electricity, namely:

  • Export value
  • Offset value for energy used on-site

Each of these components is described in more detail here along with information on how they can affect the overall value of the energy generated.

The greatest income can be achieved if the electricity generated is consumed on site rather than being exported to the grid. The greater proportion of energy consumed, the higher the income. This is because the value of electricity consumed on site (the imported electricity value) is typically 12 p/kWh, which is higher than the maximum value of electricity that can be exported to the national grid which is typically 6.5 p/kWh.

As an example, assuming 100% of the generated energy was consumed on site, thus offsetting electricity costs of 12 p/kWh, and that the hydro system was generating at a typical UK capacity factor of 0.5, then the value of the electricity generated for the system sizes shown below would be:

Maximum Power Output Annual Energy Production (AEP) Annual Income
5 kW 22 MWh £2,640
25 kW 110 MWh £13,200
50 kW 219 MWh £26,280
100 kW 438 MWh £52,560
250 kW 1,095 MWh £131,400
500 kW 2,190 MWh £262,800
1 MW 4,380 MWh £525,600
2 MW 8,760 MWh £1,051,200

As a comparison, if all energy generated was exported to the National Grid at an assumed export rate of 6.5 p/kWh, then the effective value of electricity due to offsetting normal electricity costs would be:

Maximum Power Output Annual Energy Production (AEP) Annual Income
5 kW 22 MWh £1,430
25 kW 110 MWh £7,150
50 kW 219 MWh £14,235
100 kW 438 MWh £28,470
250 kW 1,095 MWh £71,175
500 kW 2,190 MWh £142,350
1 MW 4,380 MWh £284,700
2 MW 8,760 MWh £569,400

Also worthy of mention, many hydropower sites generate a great deal of positive publicity and ‘green credibility’ through association with clean renewable energy generation. Sometimes the value of this is greater than the revenue generated by the system, but because of its non-tangible nature it has been ignored here.

To see how this translates into a return on investment you need to consider what the project will cost and what hydropower systems cost to operate, then the return on investment can be calculated.

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Are you considering a hydropower project ?

Renewables First have considerable experience as a hydro consultant and have a full project capability, from initial feasibility study through to system design and installation.

The first step to develop any small or micro hydropower site is to conduct a full feasibility study.

Contact us about a feasibility study today!

Once complete, you will understand the site potential and be guided through the next steps to develop your project. You can read more about hydropower in our Hydro Learning Centre.

Maximise the financial return of you hydropower system with GoFlo Travelling Screens. Find out more here.