Management of

Hydropower
Project
PRESENTATION BY
DEVENDRA KHALE, B.E (ELECTRICAL) & M.B.A. (FINANCE)
MANOJ REDDY R, B.TECH (METALLURGY AND MATERIAL TECH.)
Contents
 Basics of project Management
 Phases of a Hydropower project
 Planning, Execution and Operation & Maintenance
 Project stakeholders
 Peculiarities of Hydropower Project
 Risks
 Typical Milestone schedule chart
 Typical Organization chart
 Types of organizations structures in hydroprojects
 Constraints and Implications
 Some Insights
 Construction aspects
 Commissioning and Transition to O&M
 Construction
of a cement plant
The definition

A project is a
temporary
endeavour to
produce a
manufacturing
facility or
Project An Airlines starting a
new sector
starting a
service or
getting a result.

Election campaign
 Basics Phases of project Management

Commissioning and transition to

Planning phase Execution phase
O&M

It is different from operations/ manufacturing in which activities are

done in a repetitive manner in a controlled environment and there is
and should be benefit of accumulated experience, that is Learning
Curve.
 Phases of a Hydropower Project

•Reconnaissance/ Desk study 1.Detailed design study - DPR •Taking over after commissioning
•Pre-feasibility •Approvals/ Licences •Optimizing operations
•Feasibility study •Financial closure •Scheduling maintenance
•Land acquisition and resettlement •Coordination with LDC
•Award of contracts for Civil work, EM work, •Notifying contractors of any defects and
HM work and TL work # Notice to Proceed arranging prompt rectification
•Pre-construction activities – by owner and •Performance guarantee tests
Contractors •Payment of interests and repayment of
•Construction activities- Civil, EM, HM and TL loans
•Commissioning of plant and closing •Discharging obligations committed during
construction activities execution stage

Operations &
Planning Execution
maintenance
Planning Phase Reconnaissance/Desk Study

Scope
• Locate project location and project boundaries on Map
• Basic information on Hydrology
• Proposed project structure with design parameters
• Civil, Electro-mechanical, Hydro-mechanical, Transmission line, access roads etc.
• Power and Energy estimates
• Regional Geology, geology of the project area, seismicity
• Cost estimates based on current prices or unit cost of recently built hydropower
plant in vicinity
• Recommendation on whether Feasibility study should be carried out
• Estimate of professional requirements such as Experts needed and cost of carrying
out a full feasibility study
• Any Environmental Impact Assessment studies are required by the law
• Highlight any water sharing issues with in the project area or with the downstream
project and riparian use
 Planning Phase Pre-Feasibility study

Limited site surveys are carried out

Access roads available, to be upgraded and to be constructed; Project’s licence boundaries with the upstream
Scope of the study

or downstream projects
Conceptual layout of all possible schemes

Study of topological and geological conditions of alternate layouts for selection of project structures

Socio – environmental variables – Stakeholder study

Issues with any upstream and downstream projects

Verify location of project structures in terms of accessibility, topology, geology, river morphology, construction
ease, technical, economic and socio-environmental conditions
Prepare conceptual layout – project layout of most promising schemes with its major structure in appropriate
scale using available maps and conduct preliminary cost benefit analysis

Recommend areas to be covered by topographical surveys for feasibility study

Identify the shortest and most economical transmission route; select nearest sub-station for power evacuation

Expert consultation and verification of project layout and structures

Optimization- Installed capacity to be fixed tentatively – generating sets to be determined to maximize

utilization of dry season flows
Transportation aspects to be studied and constraints identified
 Planning Phase – Feasibility Study

Review of pre-feasibility study

Scope of the study

Topological surveys – topological surveys and maps, access road maps, contour maps for project components,
transmission route map

Hydrology study – collect, compile, verify rainfall data, river flow data, mean flow data, establish gauging
station, water quality analysis, catastrophic even data, river high flood data, design floods, flood frequencies.
GLOF possibilities

Sediment – collect sample and carry our laboratory analysis, estimate sediment loads

Geological and Geotechnical Investigations – Assess the regional and project specific geology and prepare
geological models

Seismic study – tectonic setting, seismic zoning, deduce acceleration of the ground motion

Construction material surveys – Identify borrow area and possible quarries and estimate quantities available

Selection of project components and project layout – Conceptual layout of most promising alternate schemes
(generally two), preliminary design and drawings of all alternatives, quantity and cost estimation, calculate
revenue from the project using saleable energy and prevailing energy prices and SELECT THE OPTIMUM
ALTERNATIVE
 Planning Phase – Feasibility Study - Continued

Prepare general layout drawings of the best alternative showing its components – Head works, water ways,
penstock, powerhouse, switchyard, transmission line route and access roads to major components
Scope of the study

Optimization – Fix installed capacity of units based on financial analysis

Basic design of – Civil structure, HM equipment, EM equipment, and transmission line & evacuation equipment

Detailed energy computation based on units selected, daily flows, net head, design discharge, turbine,
generator and transformer efficiencies

Detailed cost estimates of Civil works, HM works, EM works, Transmission line and evacuation facilities, land
acquisition, access roads, camp, communication and other infrastructure, social development (stakeholder
management costs), resettlement and rehabilitation, community support programmes – BASE COST
ADD: Engineering cost, Owner’s cost, Insurance cost, Contingencies and IDC – the TOTAL COST OF THE
PROJECT

Financial arrangements: Debt equity ration, possible sources of fund, cash disbursement schedule

Optimizing financial arrangements to maximize return of equity and maintaining loan serviceability
 Planning Phase – Feasibility Study - Continued

Construction planning– River diversion sequence, pre-construction activities: Camps (Owner’s and
Contractors’), telecommunication facilities, access roads – upgrading and construction, construction power
Scope of the study

Clearances/ approval/ permissions - Forest, local authorities, factory inspector, labour licence etc.

Land acquisition, resettlement, rehabilitation, local stake holder management, community development
program
Construction schedule – individual schedules of Civil, HM, EM and TL works and an integrated schedule of all
the project work showing milestones and interfaces among important activities

Construction methodology, major plant and tools (eg, crusher, concrete production plant, concrete
transportation vehicles, material handling equipment, etc.) to ensure that construction duration planned is
achievable
Environmental impact mitigation plan

Economic and financial assessment of the project and carrying of sensitivity analysis
Presentation of various aspects of the study in form of a Detailed Project Report (DPR) with
recommendations

The Owner Management make decision whether to go ahead with EXECUTION OF THE PROJECT OR
NOT
This marks the end of planning phase. If the decision is to go ahead with the project the next stage
EXECUTION STARTS
 Project stakeholders

• Seeking a good mix of various of • Business rationale is different from

Power Utilities

Power Producers
Independent
type of generating plants in their the government utilities.
portfolios. • These are business groups seeking
• Hydro power plant is chosen for its diversification and a steady stream
capability of quick start and stop of income over a long period of time.
which is useful in meeting peaking
power demand. • Hydropower plant is a good business
• Usually they set up large power case for steady income for the
plants and have decent time and developer and is a relatively low risk
cost reserves. business during operations.

• The implication for Project Designers and Contractors: The IPPs would want an minimum cost no frills power
plant in a timebound manner which enables Loan Serviceability and an early pay back of their investment
• Utilities tend to value additional features and may be willing to experiment new technology
• Therefore the Equipment Manufacturers may like to tailor their value chain for both type of clients
differently for sustained competitive advantage
 Project stakeholders - Continued

The Main stakeholders (list is not exhaustive & the project management should make their own assessment)

The Government agencies giving approval/ licenses/ PPAs/ forest clearance

Scope of the

Financers: the equity and debt providers; LC and Bank Guarantee providers

The contractors executing the project

study

Employees of the Owner and the Contractors and sub-contractors

The local population affected by the project

NGOs who see the project as a means of furthering their objectives

Labour unions active in the area

The local strong arm men who want their pound of flesh

• Stakeholder management should taken seriously. Right at the pre-feasibility phase stakeholder
register should be prepared and updated continually; strategies for dealing with them made and
implemented; stakeholders be monitored and status and their disposition be reviewed on a regular
basis. this is the job of the top management.
• A serious lapse in not managing stakeholder means delay and more expenses and in an extreme
scenario abandoning the project.
 Peculiarities of Hydropower
Project
Among all types of power plants hydropower projects have long gestation period.

The planning phase is longer than the execution phase – typically there is a period of 7-10 years
before a project comes to the EXECUTION PHASE. Many assumptions made during the planning
phase no longer hold true during the execution phase .

Because the planning phase is long there is some disconnect between planning team and the
execution team. The DPR which is the guiding spirit of the execution phase is not shared or many
of the assumptions relating to construction planning are not valid. Many times there is a major
change in the construction methodology with due implications for schedule and cost.

If there is significant change in the macro environment factors impinging on the project or if
there are serious lapses in studies carried out during feasibility study, projects may have to be
abandoned after making sizable investment

Stakeholder management and keeping provision of funds for the same is very important for
success of the project..
 Risks in a Hydropower Project
Geological Risks – major difference in the feasibility report and the findings at site during construction
stage

Local stakeholders turning hostile, resorting to extortion, blockades etc.

Unavailability of construction material as envisaged in planning stages

Long lines of communication at the risk of disruptions and delays

Severe transport constraints – involves making temporary bypass roads on rivers en route and carrying
out road modifications when moving ODC cargo – much cost is expended than envisaged in the
planning stage

Good professional unwilling to come to work at the remote site

Cost overruns not getting financed on time delaying the project and increasing IDC and in turn project
cost

High interface among Civil works, EM works and HM works requiring high level of coordination among
contractors – This is at times overlooked there is a tendency to take parochial view which is not healthy
 A Typical Milestone (Level-1) schedule of a large
hydropower project

Time---
Activity >>
Start of Execution

Setting up project organization

Financial closure
Approvals/ licenses/PPA
Clearances/ permission to construct
Land acquisition
Detailed Engineering
Bidding and award of contract
NTP to contractors
Pre-construction activities by Owner
Pre-construction activities by
Contractors
Construction of civil works
Installation of hydro mechanical
equipment
Installation of electro mechanical
equipment
Construction of transmission line
Commissioning of powerplant
Trial operation and take over of the
plant
Operation and maintenance of the
plant
 Typical Project organization
CHART
Head Of
Project

Land
HR &
Civil works EM Works TL Works HM Works Acquisitio
Admin In-
In-charge In-charge In-charge In-charge n In-
charge
charge

Owner’s Owner’s Owner’s Owner’s

engineers engineers engineers engineers

Contractor Contractor Contractor Contractor

’s ’s ’s ’s
organizati organizati organizati Organizati
on on on on
 Project Organization Type

Owners Project • Project specific – lines of authority are scalar – every position reports to one
organization position up

• Matrix organization mostly – Headed by a project manager for the contract – one
position reports to the project manager administratively and for technical purpose
Contractor’s to the home office manager
organization • Home office managers assign resources to the project who go back to their
department once the project is closed – they may be posted to any other project
depending on the priority of projects within the contractor’s organization

Contractor’s • PSU follow departmental approach to the project management – Main contact for
organization the project is a and executive from the sales department

• It is important for the Project developer’s executives to understand the different

types of project organizations the contractors have to know who the key people
Implication are and where to interact with what intensity for corrective actions (This is taken
for granted mostly)
 Project Constraints and
Implication
Project aspects • Define upfront and monitor regularly

Scope • Define validation documents and sign offs

• Protocols, Test and inspection plans, Factor acceptance tests, Field acceptance
Quality tests, customer hold points

• Overall integrated schedule defining interfaces between contractors – define

Schedule critical paths and constraints for commissioning the plant and subordinate other
activities to the critical path and critical constraints

• Physical and human – Should be listed in the contract and ensure mobilization
Resources • Quality of human resources to be agreed to and ensured

• To be jointly assessed with the contractors and jointly monitored and mitigation
Risks plans developed and implemented
 Some Insights

Quality control required at works

Quality control required at site

Quality of resources at site

Quantity of resources at site

Construction Technology

Product Technology

Value Addition at site

0 1 2 3 4 5 6

Civil EM HM & TL
 Construction aspects

Activities Desirable Actions

1. Kick off Meeting with • This is first official meeting after award of contract.
contractors • Use it for setting of expectations from the contractor, inform
project objectives, define what constitutes project success,
discuss updated project schedule and how the contractor’s
schedule fits into, set ground rules, discuss communication
structure, progress reporting formats, risks identification and
information, progress review meetings – frequency and
attendees
2. Design stage
• Release construction drawings to civil works contractor and
receive drawings from HM, EM and TL contractor for vetting
3. Engineering
coordination • Assign responsibility within the Owner’s organization to ensure
that requirements of EM, HM and TL contractors regarding
embedded parts, cut outs, etc. are incorporated in the civil
drawings. Miss outs or correction in civil works are time
 Construction aspects

Activities Desirable Actions

4. Manufacturing – EM, • Chase the contractors and ensure availability of equipment well in time
HM before scheduled erection of equipment.
and TL • There is tendency with the contractors to send equipment as it suits them and
not as per the requirement of erection schedule.
• Owner should strive to get sequential delivery of equipment.
• However this has to be balanced against transportation requirements of ODC
equipment. Generally ODC transportation requires construction of bypass
bridges bridge fortification and road modifications etc. enroute to site.
Therefore, effort should be made to sequence delivery of ODC components
such that bypass etc. is required to be made the minimum number of times.

• When monitoring progress at the ground zero ensure the 6 pre-requisites –

Availability of front; drawings, methodology/ technical directions; equipment
5. Pre-requisites for to be erected; human resource; tools and plant and consumables
erection of equipment • Unless all six of the requisites are available work cannot proceed
 Commissioning of plant and transition to
O&M phase

Activities Desirable Actions

1. O&M Organization • Design O & M organization

• Induct O&M team at the time of commissioning activities and ensure they get
hands on training in operation of plant
2. Maintenance • Study the O&M manuals of the OEMs and prepare SOP – Standard Operating
Procedure
• Prepare maintenance schedule

3. Operations • Optimize reservoir/ pondage operations to maximize peak energy or as the

PPA terms

• Coordination with contractors for closing punch points of erection period

4. Contractual
• Coordination for carrying out Performance Guarantee Tests by contractor
• Notifying defects to the contractor as they arise during the operation
• Formal take over of the plant and releasing BG/ last payment to contractors
• Closing of contracts
Give me six hours to chap a tree and I’ll spend
first four sharpening the axe.
– Abe Lincoln

THANK YOU