Small Hydro - Policy, Regulation and Planning

Assessment Tools and Methodologies

The assessment of sites available for small-hydro development represents a relatively high proportion of overall project costs. A high level of experience and expertise is required to accurately complete the assessment. During the past few decades numerous methodologies and software assessment packages have been developed in an attempt to reduce the time and cost required for comprehensive assessments. During Phase I several of these assessment tools were examined by the Task Force and evaluated to define their strengths and weaknesses. The findings were published in a report  Small-Hydro Assessment Tools & Methodologies (IEA Hydro Annex II, 2008). 


NRCAN Data Analysis Software and Modelling Tools

Punys et al. Tools for Small Hydropower Plant Resource Planning and Development: A Review of Technology and Applications EnergiesAugust 2011, 4, 1258-1277.  The paper includes:

           - IMP (Integrated Method for Power Analysis) - Natural Resources Canada NRCAN and POWEL
           - RETScreen® - Natural Resources Canada (NRCAN)
           - PEACH - ISL Bureau d’Inge╠ünieurs Conseils, France 
           - HES (Hydropower Evaluation Software) - Department of Energy, Idaho Engineering and Environmental Laboratory, USA 
           - SMART Mini Idro - ERSE SpA, Italy
           - Hydrohelp - JL Gordon & OEL-Hydrosys, Canada

Qin et al., May 2014  Method for Assessing and Selecting New Small Hydro Technology 

United States Geological Survey Stream Stats: a Web application that incorporates a Geographic Information System (GIS) to provide users with access to an assortment of analytical tools that are useful for a variety of water-resources planning and management purposes, and for engineering and design purposes.

United States Geological Survey.  Surface Water Information Page

If you wish to contribute by submitting information on new small hydro assessment software and other tools not covered above, please contact us.

Planning, Developing and Operating Small Scale Hydropower

SMHImage1Planning small scale hydropower projects requires many stages of technical and financial study to determine if a site is technically and economically feasible. The viability of each potential project is very site specific. Power output depends on the flow of water and the height of the drop of available water. The amount of energy that can be generated depends on the quantity of water available and the variability of flow throughout the year. The economics of a site depends on the power (capacity) and energy a project can produce, if the power can be sold, and the price paid for the power sold. In a remote community the value of power generated for consumption is generally significantly more than for systems that are connected to a central grid. However, remote communities may not be able to use all the available energy from the small hydro plant or, may be unable to use the energy when it is available because of seasonal variations in water flow and energy consumption. Although most small-hydro projects are different, the following steps provide a good outline of the main stages in the development and operation of a project:

Reconnaissance surveys and hydraulic studies

This first phase of work frequently covers numerous sites and includes: map studies; delineation of the drainage basins; preliminary estimates of flow and floods; and a one day site visit to each site (by a design engineer and geologist or geotechnical engineer); preliminary layout; cost estimates (based on formulae or computer data); a final ranking of sites based on power potential; and an index of cost.

Pre-feasibility study

Work on the selected site or sites would include: site mapping and geological investigations (with drilling confined to areas where foundation uncertainty would have a major effect on costs); a reconnaissance for suitable borrow areas (e.g. for sand and gravel); a preliminary layout based on materials known to be available; preliminary selection of the main project characteristics (installed capacity, type of development, etc.); a cost estimate based on major quantities; the identification of possible environmental impacts; and production of a single volume report on each site.

Feasibility study

Work would continue on the selected site with a major foundation investigation program; delineation and testing of all borrow areas; estimation of diversion, design and probable maximum floods; determination of power potential for a range of dam heights and installed capacities for project optimisation; determination of the project design earthquake and the maximum credible earthquake; design of all structures in sufficient detail to obtain quantities for all items contributing more than about 10 per cent to the cost of individual structures; determination of the dewatering sequence and project schedule; optimisation of the project layout, water levels and components; production of a detailed cost estimate; and finally, an economic and financial evaluation of the project including an assessment of the impact on the existing electrical grid along with a multi-volume comprehensive feasibility report.

System planning and project engineering

This work would include studies and final design of the transmission system; integration of the transmission system; integration of the project into the power network to determine precise operating mode; production of tender drawings and specifications; analysis of bids and detailed design of the project; production of detailed construction drawings and review of manufacturer's equipment drawings. However, the scope of this phase would not include site supervision nor project management, since this work would form part of the project execution costs.


The process of arranging financing for small-hydro projects is often difficult. The developer has to complete two steps to realize their development plans. The first is to obtain a contract with a utility or organisation which will purchase the produced electricity. With this contract in place the next step is to negotiate a bank loan or other source of financing. However, many banks lack knowledge of small-hydro projects and have no experience with this type of loan. In recent years some banks have acquired the necessary experience and now routinely provide loans for small-hydro projects.

Ownership and Maintenance

Key factors for sucess include:

Financing of Small Scale Hydropower

Click on Financing of Small Scale Hydropower for downloading the document. This report describes issues that should be considered during the financing stage of the project and offers suggestions and alternatives to aid in securing financing for your small scale hydropower project. Five main topics are covered:

Other resources on this topic are included in the Small Hydro Resources listings in the Publications section of this site. 

Economic Risk and Sensitivity Analysis

The following resources were developed by the Small Scale Hydro Task Force to help developers, owners or investors in assessing, planning, or operating their small hydro projects: Economic Risk and Sensitivity Analysis for Small Hydro (PDF Format).

This report is divided into ten major chapters:

Other resources on this topic are included in the Small Hydro Resources listings in the Publications section of this site.