Hydro electric power: the economics?

This data-file models the costs and the economics for constructing a new hydro electric power project, based on technical papers and past projects around the industry. CO2 intensity is effectively nil, even after reflecting the embedded energy of concrete, steel and construction.

A typical hydro project requires a 10c/kWh power price and a $50/ton CO2 price in order to generate an unlevered IRR of 10%. However, investors may be inclined to accept 5-6% IRRs as appropriate for infrastructure assets, lowering the incentive price to 6c/kWh. Cash opex is 2c/kWh.

The main cost is capex, which varies bewteen $500 and $8,000/kW. Our own capex estimates are broken down below.  You can stress tests all the input assumptions in the full data-file.