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<br />Most of the hydroelectric facilities of the future will be small com- <br />pared to the 1 arge plants present ly supp lyi ng power in the Northwest and <br />the South. It has been estimated that the electricity needs of 14-20 <br />million people could be supplied from small to intermediate facilities at <br />sites that have already been identified (Heutter 1978). <br /> <br />From a technical standpoint, SSH has the advantage of being a \'/ell <br />understood, proven technology, with an established infrastructure of <br />engineers, consultants, and suppliers. Project development can proceed <br />rapidly in most cases. SSH plants are capable of instantaneous start-up, <br />which makes them well suited for a reserve power role in energy-short <br />regi ons. SSH can often be used to advantage at remote sites where long <br />transmission lines from a major grid would be too expensive or impractical <br />and where the cost of transporting fuel for thermal electric generation is <br />prohibitive. Small-scale hydro is well suited for seasonal operation at <br />very sma 11 sites, such as ranches, lodges, and 1 umber camps, as long as <br />the season of maximum flow coincides with the season of greatest need or <br />sufficient water storage is provided and sufficient flow is avai lable for <br />competing and existing water users; e.g. agriculture, fisheries, etc. <br /> <br />The cost of generating electricity can be divided into two components: <br />capital costs and operating costs. For thermal electric generating plants, <br />operating expenses consist mainly of fuel costs. When fuel costs are un- <br />predictable (and sometimes rapidly increasing), it becomes more attractive <br />to invest in production facilities with relatively high capital costs, pro- <br />vided that future operating costs can be reduced or made independent of <br />fuel prices. Hydropower is such an investment. <br /> <br />Although the specific capital costs for hydropower depend on the <br />physical conditions at a site, the cost of construction per ki lowatt of <br />capacity is usually higher for a hydro facility than fossil fuel plants. <br />However, hydro has a significant advantage over fossil fuel and nuclear <br />plants in terms of operating costs because of the minimal fuel costs. In <br />addit ion, hydroelectric facil it ies last longer than other e lectri c power <br />plants and have a relatively simple operation that requires fewer operating <br />personnel and less maintenance expense. Annual operation and maintenance <br />costs usually vary from 2% to 5% of the total construction costs of a <br />hydroelectric project (U.S. Army Corps of Engineers 1979). The lifetime <br />economics of hydroelectric generation is competitive (depending on site- <br />specific costs) with other forms of energy production at many locations. <br />For example, small projects are often economically feasible in heavily oil- <br />dependent utility territories or at sites where existing civil facilities <br />reduce SSH construction costs. <br /> <br />Electrical power can be used either for some direct purpose, such as <br />running a factory, a pumping system, or some agricultural activity, or it <br />can be sold to a utility for general distribution through a grid system. <br />The latter use is the one most often proposed for SSH projects. <br /> <br />The demand for electricity from a typical utility varies fairly pre- <br />dictably over the course of a day and the days of the week (Fig. 3), as <br /> <br />10 <br />