Economic Sustainability of Small-Scale Hydroelectric Plants on National Scale – The Italian Case Study

Abstract

The feasibility of hydroelectric plants depends on a variety of factors: water resource regime, geo-graphical, geological and environmental context, available technology, construction cost and eco-nomic value of produced energy. Choices about the building or renewal of hydroelectric plants should be based on the forecast of the future trend of these factors at least during the project life of the system. Focusing on the economic value of the produced energy this paper examines its influ-ence on the feasibility of hydroelectric plants. Analysis, referred to Italian case, were based on three different phases: i) the economic sustainability of small-scale hydroelectric plants under a minimum price guaranteed to the hydroelectric operator; ii) the estimate of the incentives to reach the thresholds of "acceptability" and "bankability" of the investment; iii) the analysis of results ob-tained in the previous phases using a model of the evolution of the electricity price in the period 2014-2100.