The following hydropower project risks could all affect the viability of a hydropower project. Most of the risks can be significantly reduced by developing your project with an experienced hydropower designer / installer, such as Renewables First.
Consenting and outline design stage
- It is important to have written agreements in place if multiple-landowners are involved before any substantial work is completed.
- There is always a risk that the environmental regulator may not issue the required licences and consents, though this can be mitigated by good quality feasibility and pre-application work.
- Securing a grid connection can be a risk, particularly in remote locations, so permission to grid connect should be obtained at the outline design stage.
- Planning consent can be a risk, but is not normally an issue provided the system is well designed.
Detailed design/construction stage
- There is a risk that the ground conditions for foundations are not as good as anticipated, though this can be mitigated by reference to geotechnical survey data and on-site geotechnical analysis.
- Construction works are normally conducted during the drier parts of the year, but there is always a risk that severe wet weather will occur which can cause damage at the site and delay works.
- Regulatory licenses must be renewed every 12 years. There is a presumption of renewal, but if any new environmental legislation has come into force it is possible that the hydro system will need upgrading to meet the new requirements, at additional cost.
- The Feed-in Tariff is a Government scheme that could be subject to change, though recent legal challenges to changes have been won by the generators, which adds some confidence. The Feed-in tariff for new renewable energy projects was scrapped in April 2019.
- The annual energy prediction from the hydro system is based on long-term average flows, but year-to-year flows can vary significantly about this average: this can be very beneficial if you have a series of wetter years, but it can go the other way as well and have several dryer years.
- The export price for electricity can go up as well as down, though the general consensus is that energy prices will continue to rise at above-inflation rates for the foreseeable future.
Are you considering a hydropower project ?
The first step to develop any 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.
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