| Operation & maintenance
maintenance. However, although the country has made impressive strides in developing its immense hydropower potential, it still suffers from labour, infrastructure, and technical constraints in relation to repair and maintenance. Indeed, simply spending more on O&M, the authors warn, does not necessarily translate into peak performance.
“Unless O&M is strategically planned, regularly carried out, and fuelled by good data analysis, then the expenditure can become inefficient, reactive, or misplaced. This highlights that the trend in O&M capacity needs to prioritise not just increasing investment, but optimising O&M spending through better planning, development of skilled manpower, and the adoption of condition-based approaches to ensure that every resource expended contributes effectively to improved plant performance and longevity,” the authors state.
Future efforts Nepal’s hydropower sector still faces hurdles in building a
skilled workforce, especially in rural areas, and such a lack of skilled workers at plant sites undermines efficiency. Targeted vocational training and decentralised support are urgently needed because, despite progress in local expertise and manufacturing, a shortage of trained technicians for O&M tasks leads to poor daily upkeep, delayed repairs, and more downtime. Tandukar et al say that in order to prolong the operational life of Nepalese hydropower plants and improve their overall performance, future efforts must be geared towards: ● Standardising O&M practices across the entire fleet of hydropower stations in such a way that the gains realised in some areas are widely shared and well implemented.
● Advancing maintenance strategies to address the increasing complexity of turbine technologies and evolving regulatory requirements.
● Targeting investments in workforce training and infrastructure development to enhance repair and maintenance capacities.
Costly business O&M costs are an important consideration for the
financial viability of hydropower schemes and, if not carefully planned and managed, can become a substantial burden. However, despite their importance, as researchers from the University of Huddersfield in the UK claim, there remains a notable lack of consensus on how O&M costs should be estimated. Although they admit it is challenging to create strategies applicable to all hydro power schemes - because every site is distinct in size, age, location, equipment, and configuration, amongst other factors - the researchers go on to say existing guidelines lack consensus on estimating costs, particularly for small-scale projects which may be more sensitive to O&M fluctuations. Indeed estimates suggest O&M costs typically range between 1-4 % of the initial investment, with large-scale hydropower projects generally falling between 2 % and 2.5%. While estimates for smaller-scale schemes can be as high as 6 % or 4 % of the total cost. Such a lack of standardised guidance creates uncertainty for developers and investors, particularly in smaller-scale projects where O&M costs can drastically fluctuate and represent a disproportionately high share of total expenditures, affecting the financial performance and
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overall success of a scheme. To address this gap, in their research published in Sustainable Energy Technologies and Assessments, Alexandre et al investigated how different O&M cost estimation approaches affect key financial indicators - such as Net Present Value, Internal Rate of Return, and Levelised Cost of Electricity - under varying cost assumptions in small hydro plants. The research focused on four existing community-led
micro-hydropower schemes located in Northern England (anonymously labelled as 1-4). They were commissioned between 2008 and 2012 and all employ Archimedean screw turbines. Nominal capacities of the turbines used in these schemes range from 45kW to 63kW and the sites are situated in rivers with varying flow rates ranging from 2-4.8m3/sec. Over their expected operational lifetimes of 20-40 years, these schemes are projected to generate between 120MWh and 199MWh of electricity annually.
Financial viability Alexandre et al say their research shows that higher
O&M costs reduce financial viability in a scheme-specific manner. For example: ● Scheme 1 becomes unprofitable when O&M costs exceed 3%, dropping its Internal Rate of Return to 1.8%.
● Scheme 2 remains viable up to 4% but fails to meet the minimum 3.5% Internal Rate of Return required for economic feasibility.
● Schemes 3 and 4 are more resilient, maintaining profitability up to 5% of O&M costs, with scheme 4 achieving an Internal Rate of Return of 10%. Emphasising that hydropower performance is sensitive
to capital costs, generation, and O&M costs, the authors say Scheme 4 achieved the best balance among these factors. Overall they add that their research provides a structured comparative analysis of O&M cost impacts, offering empirical insights into the thresholds at which these costs compromise financial viability. Takeaways from this study include:
● Advancing hydropower economics by showing that financial viability is scheme-specific and best analysed through a threshold-based framework.
Below: Lake Mainit hydropower plant in The Philippines. Photo by Voith Hydro
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