Levelized Cost of Hydropower Projects for Sustainable Electricity Generation

Abstract

Well-planned hydropower projects can contribute to a sustainable energy supply. Energy planners, investors, and other stakeholders need up-to-date knowledge to make informed decisions about hydropower projects. Hydropower is sensitive to environmental influences and climate change. Although global potential is expected to increase slightly with global climate change, some countries will face declining potential and increased risks. Adaptation measures are necessary to ensure sustainable hydropower utilization. Hydropower costs are generally low but depend heavily on location. The levelized cost of electricity (LCOE) for the rehabilitation and modernization of hydropower facilities ranges from as little as USD 0.01/kWh for additional capacity of an existing hydropower project to approximately USD 0.05/kWh for a more expensive modernization project, assuming a 10% capital cost. The levelized cost of electricity (LCOE) for large hydropower projects typically ranges between USD 0.02 and 0.19/kWh, assuming a 10% capital cost. This makes the best hydropower projects the most cost-effective electricity generation option available today. Levelized costs of electricity (LCOE) for small hydropower plants in developing countries range between $0.02 and $0.10 per kilowatt-hour. This makes small hydropower a very cost-effective option for supplying electricity to the grid. For very small hydropower plants, costs can be higher, resulting in LCOEs of $0.27 per kilowatt-hour or more.