Frequently Asked Questions
1. What is a discount rate?
Some people take inflation and interest rates into account when calculating future income, because a pound will be worth less in the future than it is now. They use a discount rate to 'devalue' their future revenue (and future expenditure), so they get a clearer idea of how a hydro scheme would compare to other forms of investment. Public sector investments might assume a discount rate of 6%; some hydro developers will use 9%; but most micro-hydro investors will use 0%. This is because choosing an appropriate discount rate can be quite tricky, and because they may not be investing purely for financial gain. If in doubt, you could place two orders at different discount rates and see the difference it makes.
2. What are the importance weightings?
Hydrobot® will take into account your preferences when it evaluates a hydro scheme. If it is most important to you to have as large a scheme as possible, you can select a high value for 'Importance of maximising power output'. For the most economically efficient scheme you can select a high value for 'Importance of minimising cost-of-energy'. And if you need to keep the initial costs down, put a high weight on 'Importance of minimising capital cost'.
3. How accurate are Hydrobot's results?
Hydrobot® was calibrated using data from Black & Veatch for recent hydro costings, as well as other current market prices. During the Scottish Hydropower Resource Study, the model was validated using the Garbhaig hydro project at Victoria Falls, which has a 1 MW installed capacity. Hydrobot® predicted a run-of-river scheme, where the actual site is a storage scheme, and when the site was re-analysed as a storage scheme Hydrobot's result had an installed capacity of 998 kW. The capital cost predicted by Hydrobot was only 7% greater than the actual cost. As a typical pre-feasibility study aims to make predictions that are plus or minus 25%, this is remarkably accurate.
Because Hydrobot® uses datasets such as elevation from Ordnance Survey, it cannot sense every local influence or obstacle. A modelled scheme may be slightly larger or smaller than you would really want it, and it may appear slightly up or downstream of the ideal site, but the presence of a solution indicates that there is a viable scheme there, and you will get a good idea of the costs and profit involved. All pre-feasibility studies carry a certain amount of error, no matter who conducts them, but they will be accurate enough to decide whether a full feasibility study is warranted.
Where a river course has been modified, Hydrobot's predicted river path may differ slightly. In such cases we will be happy to explain the result and also what the correct path should be.
4. What happens after a Hydrobot survey?
If your survey revealed a potential project and you want more information, you can purchase more detail about the project identified by Hydrobot®, including:
- the full flow pattern throughout the year
- more detail about the size and type of equipment, pipes, etc
- suggested grid connection point and voltage
- a breakdown of cost into several elements
To take a project forward, the next stage is a feasibility study, which may cost between £2,000 and £20,000 depending on the size of the scheme. The feasibility study will normally include the following:
- Flow gauging - for up to one year
- Detailed financial modelling
- Grid connection assessment by the Distribution Network Operator
- Detailed site survey to produce outline design for the scheme
- Review of environmental issues; surveys as necessary
- Consultation with relevant authorities
The feasibility study will provide most of the information required for the Environmental Statement and the Planning Application that follow.
On obtaining planning permission, the project management role commences. This will cover the detailed design, and all aspects of administering, commissioning and overseeing the construction and operation of the scheme.