[leoedin]

In the UK and much of europe subsidised feed in tariffs make micro-hydro quite economic. We're building a 10kW scheme which should pay for itself within a few years and receive guaranteed 20p/kWh (about 30c) for the next 20 years.

Even if the feed in tarriff was signficantly less there's an economic case for schemes of that sort of size. The payoff period would be longer, but it would eventually start making money.

I suppose it depends what you define as "micro" though. The fixed costs are fairly similar whether it's 3 kW or 15 kW, so pay back time varies significantly.

[mattlutze]

I get that it's profitable, but is it really "economic" when the market price is guaranteed like that?

I'm curious how long out your firm's / colleagues' projections are for when small hydro like that will be competitive sans tariff, or if it only makes sense on the tariff?

[leoedin]

It's a private project with quite different motivations than a commercial one would have. I doubt that a scheme that size would make sense commercially as the costs to build would be a lot higher (land acquisition and costs of project management are essentially zero on a private project).

There's various prices that power gets sold at, each with different economic cases. If the project simply replaced the power used in a house, then at ~10p/kWh it would still pay for itself within a reasonable timescale. If you could only get wholesale power prices then the case would be tenuous.

The case for micro hydro is made or broken by the site. If you've got good access, reliable flow and a fairly high head then it can be cheaper than any grid supply. The "low hanging fruit" larger hydro plants have been competitive with other baseline energy supplies for decades. The main issue with hydro is that in most of western Europe we've already developed all the really good sites.