Pitch

The project is a run-of-river hydroelectric system with a novel new approach that fundamentally differs from the standard hydro methodology

Description

Summary


The provisionally patented technology uses the river flow forward motion combined with a 3-10m stepped  fall. This is novel in that the combined forces are much greater than just a fall as in standard hydro systems. It is a staircase based system capable of managing a wide range water flow variance (1/2 m3/s-100 m3/s). We plan to use this capability in our stand-alone (1/2 m3/s-14 m3/s) & multi-stage (15-100 m3/s) power plants. This is unheard of in hydro circles. The first station (15-45m3/s) will be installed on the Fish River in South Africa. Thereafter a further 100 stations will be installed one after another every 5-10m fall in river elevation using the same water to repeatedly generate power on its way down to the ocean.

The low cost of the turbine technology (simplicity), less than normal standard hydro civil works & cost makes the speed of installation quick. The combination makes a huge contribution to containing costs & therefore the ultimate cost of power. The sequential installations downstream enables power to be distributed to local communities or connected to the grid. Power is supplied at an affordable rate of R0.51/$0.05 compared to Eskoms rate to municipalities which can be seen here (more detail on this later).  Maintenance & monitoring costs are low and can be performed by semi-skilled people.

It can also be easily retrofitted to new/existing hydroelectric dams & because of the approach used it tends to increase the power of the dam to a multiple of 2-4 or more, depending on the dam water flow & the elevation fall in the staircase design. 

It is unique in that standard hydro systems need a steady stable flow to work correctly whereas our system manages variable water flows as shown above. This fact limits wastage & losses when compared to other hydro systems. Using the flow variance of our demo plant (15–45 m3/s) as an e.g. standard hydro systems would only focus on a 15m3/s flow and ignore the rest, wasting energy and water. 

Category of the action

Decarbonizing energy supply

What actions do you propose?

Gaia Power has been improving the performance of the turbine to be use in our staircase-based system. In this regard many smaller scale turbines have been built & tested to date. It is now ready to be tested on a larger scaled basis in order to evaluate big water flows of 45 m3/s. Until now 45 m3/s of water was not readily available in local testing environments. The University of Stellenbosch in South Africa, who gracefully adjusted their facilities to accommodate testing of such huge water flows, has now been contracted to test the turbine in the next few weeks. The up scaled turbine has been built & a few minor additions are being added to facilitate the testing. Amongst the many tests done on previous models that enabled the evolvement of the turbine, it was tested on a scale of 1:100 with 3cm variable water flow (representing 3m) using a perspex construction with a toy scale electric motor (designed to operate at 25 000 rpm) attached. Links to download videos showing results of this test are https://www.yousendit.com/download/TEhYRE9wMGtubVdGa2RVag & https://www.yousendit.com/download/TEhYRE9peFU1aWJWUThUQw. All in all, the test proved that the underlying approach being pursued & on which the system operates is valid & achieves the desired function. This has evolved to a full-scale model (1:6) that will manage a 3m3/s waterflow with a fall of 1m generating a theoretical 14 kw. Images of this model can be downloaded at https://www.yousendit.com/download/WFJYaXRFMVhZY1RtcXRVag.

The testing to be done by University of Stellenbosch is a 1:6 scaled up test to ensure that all issues pertaining to scaling the turbine to full commercial size has been addressed prior to commencing commissioning of the demo plant. The test will achieve three very important aspects namely:

  • A scaled test at a high water flow volume of 45m3/s
  • An actual test of a low water flow volume low head turbine (a 3m3/s water flow with just a 1m fall)
  • A validation from a respected external source other than Gaia Power

This would cover all aspects of the Technical Feasibility & Proof of Concept questions from a respected source external to Gaia Power. The report from the University will be made available once received. 

Once the final testing is complete we will raise further funding to place one demonstration station generating 1,06 to 3,45MW of renewable electricity on the Fish River, South Africa. Electricity will be supplied at the Eskom WEPS active energy charge (R0,51 2013 or USD 0.05/Kwh). 

With regards to Eskoms WEPS (wholesale electricity pricing system) tariff. It is the standard pricing that Eskom uses to cost its power to all the different stakeholders in the country. It is a sort of averaging system of costing across all of its power generating system, the largest being coal. Eskoms average costing system is currently the second cheapest in the world beaten only by Canada due to its extensive hydroelectric systems. Eskom has prided itself on the pricing it has been able to achieve which made a huge contribution to the growth of the country. However its pricing structures have changed due to increase in maintenance and capacity & it is forced to increase its pricing in line with those increases.

The rate that we use is one component of Eskom's WEPS tariff i.e. "active energy charge" & is cheaper than the rate that Eskom supplies electricity to municipalities & local authorities due to network, distance and other charges that are added on over & above this charge. For more detail on the other charges added see Eskoms WEPS tariff sheet here. With reference the the aforementioned Eskom WEPS tarriff Gaia Power would supply at the > 900km transmission zone & at < 500V price range. The average of these prices over peak, standard, high and low demand seasons is R0,51 for 2013 or USD 0.05/Kwh. All the “extra” charges that Eskom bills their client over an above the active energy charge significantly increases the price that Eskom’s customers pay. With Gaia Power, municipalities would only pay the active energy (R0,51/$0,05) & the transmission network charge (R0,10/$01). The other charges they would have paid Eskom fall away. Municipalities with their own network in place only pay the “active energy charge”.  This is a significant cost saving to the municipalities. For this reason the Cradock municipality, the Fish River irrigation scheme & the city of Cape Town have already expressed verbally & in writing their intention to buy whatever power we generate.

Once our generation license is fully approved, we can also sell power to Eskom & a PPA will be signed with them then. Our power generation license is currently provisionally approved. We will supply Eskom at the same rate (2013 - R0,51/$0,05) & we do not require any subsidies/feed-in tariffs/incentive programs.

Gaia Power using its Stream Dragon technology is thus able to produce renewable energy power profitably at the current Eskom WEPS "active energy charge" which as you have seen is only one component of the total Eskom WEPS tariff. This is a first for any renewable energy company in south Africa & to be able to achieve this is a major feat when compared to other countries around the world. It is therefore a reasonable statement that we can produce renewable energy at the second cheapest rate in the world. 

The demo plant will take 8 months to commission & breaks even in its first quarter of operation. Funding will be repaid within 4 years. The location of the demonstration plant was chosen for several reasons namely:

1.    Gaia can operate and monitor the effects of the first installation of the turbine and methodology in a semi-controlled environment. There is very little chance of flooding & the canal is blocked every year for maintenance. This will enable Gaia to do detailed analysis of the station during this period in complete safety & convenience. Lessons learned will be carried forward to subsequent stations.

2.    The variance in water flow at the site will confirm & demonstrate the effectiveness of the turbine over a wide range of water flows. This will give it acceptability in the market place.

3.    It will demonstrate that further stations can be installed downstream in a river, on a cumulative basis

4.    It will demonstrate that the system can provide power to local as well as national grids on an affrodable and reliable basis.

5.    It will enable local production to occur on a power cost advantage basis to regions and therefore stimulate local business growth and job creation.

Once the demonstration plant is operational we will expand the demo into a commercial enterprise by adding a further 100 stations along the Fish River generating 106-345MW of renewable electricity. The variation in power output is due to the rivers water flow fluctuation. The technology can be used on other rivers in South Africa & on most rivers around the world, see below.

Environmental impact

1.    GHG reduction – The CO2 reduction of our 345 MW system will be 1 937 237 tons per annum.

2.    Air quality – air quality is not affected

3.    Energy efficiency over other processes – the system is much more efficient in harnessing the full power potential in a river than the conventional hydroelectric dam.  For example, the current output of the Orange River in South Africa can be increased 6,9 times with the use of the Stream Dragon™.

4.    Water quality – water quality is not affected as generators, gearboxes & cabling are all out of the water

5.    Waste management & treatment – the project produces zero waste

Social & developmental impact

1.    Job creation & Skills - The Fish River project (demo & commercial) will create 370 direct jobs broken down as follows:

                                  Construction    Operations     Maintenance

Short Term                         20         

Medium/Long term                                      330                    20

Total                                    20                    330                    20

 

Low Skill                               7                    300

Medium Skill                       10                      15

High Skill                            13                      20                       5

Total                                   30                    335                       5

 

Training                               15                    300                     20

2.    Sustainability – The equipment & therefore the project, is estimated to have a life span of 100 years. Jobs indicated as medium to long term will continue for the duration of the project. The short-term jobs (mainly construction) will also provide medium to long-term jobs intermittently as the company expands its operations to other rivers in South Africa (Orange, Vaal, etc.), neighboring countries, Africa & the rest of the world. Direct manufacturing & all indirect jobs are excluded.

3.    Cross-country technology transfer – our technologies can be utilized in many places in the world as already indicated above.

4.    Poverty reduction – It is the intention of Gaia Power to focus on the larger installations and to allow SME & SMME’s to take advantage of building & managing their own small plant/s using our methodology & turbine. This will create jobs, local enterprises & local communities will be supported going a long way towards alleviating poverty at grass root level. South Africa currently has about five million SMMEs. Imagine if each one of them employs one extra person – due to our technology & providing opportunities, a new growth path would rapidly ensue. By supporting SMMEs in this way, South Africa’s & any other economy would grow exponentially.

5.    Rural electrification – The system design facilitates either a national grid connection &/or a local grid connection. The provision of affordable power on a local basis will provide rural communities with access to power, purified water and jobs

6.    Enterprise and community development- It is our intention to utilize 1% of the EBITDA of the project (± R11.9/$1,1 million per annum of the commercial project) to support the Cradock community and local enterprise development. A Joint Venture (JV) partnership structure, consisting of Gaia Power Group, funders, key members of the local community & select individuals from the business community will be utilized, to evaluate projects & allocate funds to sustainable enterprises & community projects.

Adaptive impacts in relation to the project rationale / motivation

The 1st plant will be housed within the irrigation scheme of the Fish River valley. The greater system (i.e. the additional 100 stations) would more than supply the needs of the Fish River irrigation scheme as it currently stands. High-level discussions with the local community have expressed desires to manufacture their products locally but the unreliable, unstable current electricity supply & network has held this back. It is hoped that a more reliable source of power at a cheaper rate would encourage local producers to consider manufacture of local produce. There is also a large rural community of workers housed near to Cradock & it is envisaged that power would also be supplied to this community in an upliftment project in a joint venture between Gaia Power and the community as stated above. The rural community uses fossil fuels for cooking & heating & we would target this area to convert to renewable & carbon free electricity consumption based on cost factors. The local consumption of power produced locally creates a different culture of independence & cost advantage. This will lead to better trade opportunities being created all around the country. For example the fish river irrigation scheme supports mostly citrus farming. The farms could support the canning of citrus fruit for sale to cities in exchange for other supplies that they would need such as farming equipment & transport. This trade creates many wealth & job creation opportunities. 

Who will take these actions?

Gaia Power is a small startup company, as a result have engaged world class companies that will construct & commission various components of the run of river based stations.

Gaia Power Group is the project co-coordinator of the projects together with its appointed main specialist’s contractors who comprises the project team. The envisaged main specialist’s project contractors would ideally include WSP (project management), SA Five (engineering), Dura Soletanche Bachy (construction), ABB (transmission, switchgear and generators), African Cables & Eskom (transmission lines/grid connection), CSIR & Universities (testing), SRK Consulting (EIA) if needed. More details of these companies & Gaia Power Group can be found in our company profile, which can be downloaded https://www.yousendit.com/download/WFJYaXRBT01tUUg0WjhUQw.

The suppliers will be contracted to train Gaia Power staff in the functioning, monitoring and minor repairs of the system as part of the installation process. Once the system is finally commissioned Gaia Power staff will be fully capable to manage & maintain the station & onngoing training will be provided. 

Gaia Power would eventually act as a renewable energy company as well as license the technology & sell standalone stations to small businesses.This system fulfils a unique place in the power generation market. There are many rivers in South Africa, Africa and the world that have permanent water flowing. These vary according to season. The system being modular & adaptive can accommodate varying water flows with ease within a singular turbine. It is modular meaning, that when water flow is high multiple parallel systems can be used & when water flow low less stations are used. Because of it modular nature it is easily scalable and replicable. The long-term vision is to expand to the SADC region, rest of Africa, Europe, America, South America, India, China, Asia, Australia, Russia & Indonesia.

Where will these actions be taken?

Project location is on the Fish River at the exit of the irrigation tunnel that is fed from the Gariep Dam & close to Cradock, Eastern Cape, South Africa (31°25'22.53"S 25°38'13.53"E).

From this point the project will be expanded along the Fish River. About 100 stations generating 106 to 345 MW will be placed downstream along the river.

All material, machinery & equipment will be sourced locally either through direct purchase or manufacturing. The team of contracted companies, who all have offices in South Africa, will do construction & commissioning.

The system will first be placed along the Fish River as already mentioned. Once this system is operating it will repay its investment in just over 3 years. Thereafter all expansion will pay for itself and we will extend the system as follows:

In South Africa:
Orange River – 13 333 GWh annually
Other – In process of investigation 

In Zambia, Namibia, Zimbabwe:
Kafue – 39 420 GWh annually
Kunene - In process of investigation
Zambezi – In process of investigation
 
The total of the Fish river & Orange River output amounts to between 5 696-15 062 GWh per annum. This accounts for 56.96%-150.62% of the SA's 2013 renewable energy consumption target of 10 000 GWh per annum. The reduction in CO2 being 3% (±16m tons) of the countries total emissions (506m tons 2010). It does not include major rivers in SA like the Tongaat, Umgeni, Oliphant, etc. There are 284 rivers in South Africa, many perenial & the country has an average elevation difference from the Highveld to the ocean of 2100m so there are significant opportunities. 

Taking the above into account & the map of a study done by the CSIR, Eskom & Dept. of Minerals & Energy, which can be downloaded here, the potential for Gaia Power & entrepreneurs to build their own small power plantis clear. Also bearing in mind that the grading of this map was created with standard hydro systems in mind & with the Stream Dragon 2-4/more times the power output could be attained. 

What are other key benefits?

In South Africa the national government has a target of generating 10 000 GWh per annum of renewable energy, by 2013. Currently only 1% of this figure is being fulfilled. Our first commercial plant on the Fish river will generate 1 728,8GWh per annum fulfilling 17,29% of this target.

Benefits of the Proposed Technological Idea

1.    Reduction of ±1,7m tons of CO2 emissions/annum

2.    Pricing is competitive to coal

3.    Profitable with quick payback 

4.    Silent

5.    Does not dam water but uses weirs along the river so the river flow is maintained and never interfered with and therefore ecologically friendly.

6.    Scalable (1m to 10m elevation fall)

7.    Easy and low maintenance

8.    Long life (100 years)

9.    Highly efficient (projected at 80%)

10.   A new station can be placed at every 4-10 meter fall in a river

11.   Environmentally safe and friendly

12.   Once proved as a system, many possibilities for use all over the world becomes possible to benefit millions

What are the proposal’s costs?

The cost of the project is as follows:

.  Final Testing - R200K approx.   USD 25K

.  Phase I - R27.4 million approx.  USD 3.1m

.  Phase II - R1.7 billion approx.    USD 189m

The project has one negative side effect and that is that over time there will be some silting up of sand around the weir. We will mitigate this by regularly pumping sand build out with sand pumps.

Some highlights of the projected financials are:                                            

                                                  Demonstration         Commercial                  

                                                  Phase I                       Phase II

.   Investment                            R27 400 000               R1 700 000 000

.   Financial Structure               100% Debt                  100% Debt

.   Interest Cover                      10%                             10%

.   Construction period              8-10 months                18 to 24 months

.   Operations start                   end year 1                    end year 2

.   Breakeven                                1st quarter of operations for both

.   IRR                                       20,01%                    28,86%

.   EBITDA

Year 1                                       R  1 420 685           (R     2 592 000)

Year 2                                       R  5 926 459           R   141 995 374

Year 3                                       R  7 196 831           R1 021 173 338

Year 4                                       R  8 662 055           R1 021 173 338   

Year 5 onwards                        R10 344 764           R1 021 173 338

.   Payback Period                    4 yrs 1 mth              2 yrs 3 mths

.   Other economic benefits

.   GHG Reductions                 17 287 tons              1 937 237 tons

.   CER values etc.                   R1 728 749              R193 723 7003.

.   Above carbon emission revenue (CER) not included in the financial model. Would be additional revenue to the project if included

Time line

The project has been designed as a quick turnaround system in both construction & repayment. Therefore long time horizons as is the norm with projects of this nature will not apply to us. 

Phase I

  • 1 Demonstration station, Fish River, SA generating 1-3.4MW
  • Phase I timeline 8-10 months (2013/2014)

 

Phase II

  • 100 commercial stations along the Fish River
  • Phase II timeline 18 to 24 months (2014/2015)

 

Assumed timings of financing requirements of demo plant

Drawdown of financing is expected to be as soon as possible as this will enable us to start the process of purchase of land/lease, design, building, testing and installing the demonstration model. Below are the withdrawal cycle as projected, indicating timing of drawdowns.

  • Quarter 1 Year 1 – R14 000 000
  • Quarter 2 Year 1 – R11 700 000
  • Quarter 3 Year 1 – R     900 000
  • Quarter 4 Year 1 – R     800 000

 

Repayment ability

Deepending on when finance is secured, the project will be completed sometime in 2014 most likely first half od the year and operations commence in the second half of 2014. Capital and interest repayments are scheduled as follows:

     Year                        Capital                        Interest

2014                        R1 900 000                        R2 114 167

2015                        R2 800 000                        R2 405 000

2016                        R5 300 000                        R1 942 500

2017                        R7 800 000                        R   960 000

2018                        R9 100 000                        R     50 000

2019                        R   500 000                                       

The project has been self-funded to date by Gaia Power Group.

What still needs to be achieved, before the implementation can begin?

For the project to be implemented the following needs to be achieved:

  • Final testing of turbine
  • Financing of demonstration plant
  • Final approval of use & lease of river – Department of Water Affairs
  • Financing for commercial plant (commercial bank funding)

Related proposals

None that we are aware of.

Our approach to this method of power generation is unique and therefore we do not envisage any other links. 

References

The methodology has been developed primarily by Gaia Power. Gaia has used the input from many sources to bring it to this stage. The University of Stellenbosch civil department was used to help and advise us on best methodology to gain the combination of forces to best advantage. The Mech Eng Department was used to help with the actual turbine and ways to capture the forces most efficiently and especially with the math as the methodology does not just involve standard hydro principles. It needed an adaptation. The generator and its application and adaptation to the system came from interaction with various generator companies and interaction with the wind industry. Gaia Power then pieced all of the parts of the jigsaw together to get a wholeistic and workable solution.

In the process there is no paper or any other report that was generated. This is a combination of many faculties merged and fine tuned into one system. The test with the university will issue a report that will give the results of the combination of the faculties in the output and efficiencies of the system. There is also a further complication that we had to be very careful to not let the university do any research on our behalf and also ensuring that whatever work they di on our behalf was paid for by us. If this had not been doen they would be have been entitled to a portion of the IP according to an SA IP ACT. We wanted to avoid dual ownership and its resultant complications and as a result we paid for all consultations as required. At no point was any equipment of theirs used without payment. All development and equipment used was paid for by Gaia.

All of this resulted in no papers, reports or any publication. However the testing report will be an official document that will be available once completed. This document will be external to Gaia Power. 

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Proposal summary
Fish River River Hydro Scheme
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By:  Gaia Power Group
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