Learn about the cost of hydroelectric power per kWh. Understand the variables affecting pricing and how it stands against alternative energy options.

Hydroelectric Power Costs per kWh in the USA

Hydroelectric power has long been a reliable and cost-effective source of renewable energy in the United States. It harnesses the natural power of flowing water to produce electricity, offering a clean and relatively stable energy supply. The cost per kilowatt-hour (kWh) of hydroelectric power varies based on factors like location, plant size, maintenance costs, and government policies. Here, we’ll explore the components influencing hydroelectric power costs, current average costs in the U.S., and the role of hydroelectricity in the country’s energy landscape.

Average Cost of Hydroelectric Power in the USA

The cost per kWh of hydroelectric power in the United States ranges widely, generally falling between $0.01 and $0.05 per kWh. This low cost makes hydro one of the cheapest energy sources available, especially for large-scale plants that benefit from economies of scale. According to the U.S. Energy Information Administration (EIA), the average cost for conventional hydroelectric power generation is typically lower than both fossil fuels and other renewable sources like wind and solar, although maintenance and environmental considerations play a role in pricing variations.

Types of Plant capacity:

 a) Low capacity plant (Low capacity plant): Generally, a plant with a capacity of 100 kW to 999 kW is called a low capacity plant.

 (b) Medium capacity plant (Medium capacity plant): Generally, a plant with a capacity of 1000 kW to 9999 kW is called a medium capacity plant.

 (c) High capacity plant (High capacity plant): Generally, a plant with a capacity above 10,000 KW is called a high capacity plant.

Conditions a selecting the rate of charge for electrical energy:

 1.  Fairness: All costs are calculated and tested: The price of electricity should be determined in such a way that it is acceptable to both the producer and the consumer.

2.  Simplicity: Electricity pricing should be done in a simple manner and understandable to all.  It is by no means advisable to follow a complicated procedure.

 3.  Cost: Electricity generating company in any order of electricity.  Do not impose any cost over and above the fixed costs in pricing so as to create a tendency in the mind of the users to set up another new power plant.

Elements that enter into the cost of electrical energy to the consumer:

 The following factors are to be considered when determining the customer’s price.

     1. Fixed cost

     2. Production cost (energy cost)

    3. Customer element

     4. Investor’s Profit

Fixed cost:

 1.  Cost of land purchase

 2.  Cost of building

 3.  Cost of Equipment

 4.  Cost of Installation

 5.  Cost of designing and planning the station

Cost of Primary Distribution System-

 1.  Cost of setting up substations.

 1.  Cost of laying transmission lines.

 3.  Acquisition cost of land for setting up tower.

Other expenses—

 1.  Interest, taxes, depreciation etc. on capital.

 2.  General operating expenses.

 3.  Depreciation expenses on machinery and buildings.

Total maintenance cost of power plant’s Land, Building and Equipment Cost:

 Land has to be purchased and acquired for setting up power plants, substations, transmission lines etc.  Costs for land acquisition at different locations for different types of power plants are almost same or close.  Equipment costs are based on per kilowatt capacity.  In thermal power plant this cost is not much less or more but for hydro power plant it varies. Because the capacity of hydropower plant depends on dam, spillway, water head and quantity etc. According to 1970 data, the installation cost of hydro power plant is 16.73 USD to 25.09 USD per kilowatt and the installation cost of thermal power plant is only 8.5 USD per kilowatt.

Interest: The money invested for the power plant would have earned if it had been invested in any other profitable enterprise.  Again, if that amount of money is deposited in any bank, interest would be earned from it.  Therefore, the production cost equal to the amount of money invested in the power plant

Production cost:

The power component is considered as the operating cost of the power plant.  This is the cost per unit of electricity generation and supply.  The cost depends on the quantity of electricity produced.  Its power station Production cost as well as operating cost is high and operating cost of hydro power plant is relatively low.

 Generally the following costs are covered under production cost.

 1.  Cost of fuel

 2.  Cost of operating labor

 3.  Maintenance wages and raw material cost (Cost of maintenance

 Labor and materials)

 4.  Cost of supplies: such as feed water, cooling water, lubricating oil, water purification plant chemicals etc.

Calculation of cost:

The electricity factor is obtained by dividing the actual electricity production cost by the hourly electricity consumption (KWH).

 It is, however, admitted that thermal and diesel power generation plants have relatively higher costs in the power generation sector.  On the other hand, the primary investment cost of hydropower plants is much higher than the cost of power generation, which has been briefly discussed.  However, it has been calculated that the total operating cost of the power generation plant is as follows-

 The initial cost of hydropower plants is higher than other power generation plants but the production cost of hydropower plants is lower.

 Below are the sectors of production cost of 500 megawatt hydroelectric plant where

 Lifetime- Machinery 35 years and Dam 100 years.

 Capital cost of setting up machinery – (as per kilowatt)

 Cost of construction of dams and cost of civil works – (per kilowatt)

 Major repairs – 25% of original cost

 Minor repairs and maintenance – 5% of the original cost

 Interest-4% of principal cost

 Tax– 6%

 Supervision cost averages 2% of the invested amount.

 Electricity consumption in own appliances -5%

 Later on the depreciation cost of dam and machinery should be calculated per kilowatt.

Conclusion: Hydroelectric power costs per kWh in the USA are among the lowest for energy generation, thanks to the reliability and renewable nature of water resources. While hydroelectric power faces some environmental and infrastructure challenges, it remains a critical and cost-effective energy source for the U.S. As the country moves toward a more sustainable energy future, hydroelectric power is expected to play a continued role in providing affordable, reliable, and clean electricity.