A Profitable Private Microhydroelectric Plant

The Department of Energy's term for any installation with less than 100 kilowatts (KW) of capacity is microhydropower, a small stream can be used for a private microhydroelectric plant as a long-term energy investment.

| November/December 1982

Since the heyday of the Rural Electrification Administration, power production has been pretty much left to big business . . . but the trend towards creating a private microhydroelectric plant may have begun to reverse this situation. 

It would be easy to get the impression, in the face of the controversy and publicity that have been generated by nuclear energy of late, that fission-derived electricity is the main source of generated power in the United States. Therefore, you might be surprised to learn that only about 10% of this country's electrical needs are actually provided by reactors . . . and that a renewable resource, hydroelectricity, actually outstrips the atom in terms of total watts produced.

Unfortunately, most major rivers were dammed decades ago, and little hydropower capacity has been added in recent years. And that's a real pity, because water power has consistently proved to be the least expensive way to generate electricity and is—many authorities believe—the most environmentally benign method, as well. However, there is significant untapped hydropower potential in small streams, and this source of energy may be particularly appealing to enterprising individuals with an eye to the future.

Microhydropower is the Department of Energy's term for any installation with less than 100 kilowatts (KW) of capacity. (To put that number in perspective, consider that most households use an average of about 1 KW per hour, while a nuclear plant might generate about 1,500,000 KW per reactor.) In the past, the expense of building these very small private microhydroelectric plants couldn't often be justified by the value of the power generated . . . but, as most of us are painfully aware, the cost of electricity isn't what it used to be. Today, a resourceful person with access to some capital can put together a microhydro site for a price that makes sense as a long-term investment.


One of the main factors making it possible for a small hydro site to become a moneymaking proposition is a federal regulation: Section 210 of the Public Utilities Regulatory Policy Act of 1978 (PURPA). Among other things, the edict specifies that power companies must purchase power from independent producers at what is called "avoided cost". This means, very briefly, that the utility is forced to buy the power (which wasn't the case previously) and that the producers should be paid what it would cost the power company to generate the same amount of electricity. [EDITOR'S NOTE: This is all a great deal more complicated than it sounds . . . so much so, in fact, that the regulation has been challenged in the Supreme Court. Nonetheless, nearly all utilities do buy electricity at this time.] 

Of course, few companies are paying as much for power as they're charging for it. (After all, the utilities have such additional expenses as supplying the lines, customer service, billing, etc.) But PURPA has made it possible for small producers to receive at least some payment for the electricity they're capable of generating. And with buy-back rates (the price paid by utilities to small-scale power producers) running between 2 cents and 10 cents per kilowatt-hour (KWH) across the country, microhydropower is capable of becoming a paying proposition.

4/8/2009 12:58:57 AM

Hi Everyone, I have a friend in Maine and she's looking for help fixing up here micro hydroelectric plant,enough to power at least 5 homes maybe more. Central Maine and Power hasn't paid a dime to her for the extra electricity generated, which makes it tough to come up with repair money. She has put a bunch of her own money into the upkeep and repairs but could use some help-- if anyone knows of grant money available,,,or anything that might be of use it would be greatly appreciated. Rick.

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