Project Description:

This presents a bundle of three small-scale grid connected run of river hydro plants that will undergo rehabilitation to restore the generation capacity. The three rehabilitation projects include Machakhela, Misaktsieli and Ritseula. Rehabilitation is expected to begin in mid 2007 and the plants are likely to commence operation in 2008.

The USAID funded Rural Energy Program (REP) is supporting the rehabilitation of the small hydro projects (SHP) in Georgia. Georgia has a large number of rural communities with poor energy supply. Many rural businesses and households depend on expensive and environmentally unfriendly generators for electricity, and illegally harvested fuel wood for heat. The Rural Energy Program (REP) in Georgia aims at developing in-country capacity to increase the utilization of small hydropower resources and realization of energy efficiency potential in rural Georgia. The primary objectives of the REP includes: 1) increased supply of energy to rural areas; 2) improved management of local energy production; 3) improve in-country capacity to develop and deploy renewable energy applications in rural communities; and 4) improve capacity to more efficiently utilize and protect the local energy resource base.

The three projects considered under the REP in this PDD are described separately below:

Plant Name: Machakhela Small Hydro Project (SHP)

Machakhela SHP owned by Bakuri Ltd. is located on Machakhela River and commenced operation in 1956. It consists of 50 m long weir, 15 x 57.5 m silt basin, 21.4 m head, with water discharge rate 9 m3/sec. The power house is equipped with 2 Francis-type turbines totaling 1,480 kW (740 kW each). Both the units of the SHP are currently operating with low efficiency 760 kW (380 kW each). The units were originally 740 kW. The annual average generation over the last six years (2000-2006), for which generation data is currently available, was 1.5 million kWh. The plant failed to generate at all between 2000 and 2004.

Due to poor maintenance and recent floods the plant is operating with relatively low efficiency (760 kW) and needs refurbishment. The rehabilitation will not only increase the installed capacity but also prevent the SHP from collapse in the coming few years. The weir, powerhouse silt basin, penstock all are in poor technical condition and needs minor repairs and replacements. After rehabilitation the total capacity of the SHP will be 1,480 kW, adding 720 kW, with total expected annual generation of 9.4 million kWh annually. The rehabilitation of the plant will not affect the overall weir height of the plant or change the original physical characteristics of the plant.

The SHP is connected to the grid. The main buyer of the plant’s electricity at present is Adjara Electricity Distribution Company (AEDC), the distribution company in the Khelvachauri district. After rehabilitation, AEDC is expected to off-take the entire electricity production for distribution to end-users.

Plant Name: Misaktsieli SHP

Misaktsieli SHP owned by Ento Ltd. is located on Aragvi River and commenced operation in 1964 with the primary purpose of supplying electricity to the nearby village. The SHP is fed by the Lami-Misaktsieli irrigation canal and has a total length of 24.7 km, with water discharge rate 6.85 m3/sec. The power house is equipped with two Francis-type turbines totaling 2,600 kW (Unit 1: 1,600 kW, Unit 2: 1,000 kW). One generating unit (Unit 2) is currently operating with low efficiency 700 kW. The unit was originally 1,000 kW. The annual average generation over the last six years (2000-2006), for which generation data is available, was 1.8 million kWh. The plant failed to generate at all in 2001 and 2002.

Due to age, poor maintenance and deterioration, one generating unit is operating with low efficiency (700 kW) while the other generating unit (Unit 1) has broken down. Both the turbines need refurbishment to increase the capacity of the plant. The canal, headworks, intake and power house are damaged and needs minor repairs and reconstruction. After rehabilitation the total capacity of the SHP will be 2,600 kW, adding 1,900 kW from the current capacity. After rehabilitation, the total annual generation is expected to be 11.81 million kWh. The rehabilitation of the plant will not affect the overall weir height of the plant or change the original physical characteristics of the plant.

At certain times the SHP feeds an isolated electrical network of customers around the facility while at other times the SHP is connected to the central grid, which is not reliable and disconnections are frequent and unscheduled. At present the main buyers of the electricity are United Electricity Distribution Company (UEDC), Georgia Wholesale Energy Market (GWEM) and Georgian Electrokavshiri (the local land line telephone company). After rehabilitation Natakhtari brewery will be an additional purchaser of the electricity. The local distribution company (UEDC) will facilitate the transaction as the plant must utilize the electricity grid.

Plant Name: Ritseula SHP

Ritseula SHP owned by Ritseulahesi, Ltd. is located on Ritseula River and commenced operation in 1937 for supplying electricity to the surrounding villages and to support agricultural activities in the district. It consists of low height dam structure 5 m at the left bank and a canal 1.5 m long and 1.9 m high, with water discharge rate 3 m3/sec. The power house building is equipped with 3 horizontal hydro units, double nozzle Pelton-type turbines totaling 6,056 kW (Unit 1: 4080 kW; Unit 2: 988 kW; Unit 3: 988 kW). One generating unit (Unit 1) is currently operating with low efficiency 3,500 kW. The unit was originally 4080 kW. The annual average generation over the last six years (2000-2006), for which generation data is available, was 23.7 million kWh.

Due to age, poor maintenance and deterioration, Unit 1 is operating with low efficiency (3,500 kW) while generating Unit 2 and Unit 3 never operated. The SHP was previously rehabilitated in 1959 and under-went major maintenance again in 1995. The current rehabilitation plan requires refurbishment of Unit 1. Unit 2 and Unit 3 need to be dismantled for detailed inspection and rehabilitation work. Other minor repairs and reconstruction work needs to be done on the SHP. After rehabilitation the total capacity of the SHP will be 6,056 kW, adding 2556 kW, with total expected annual generation 32.77 million kWh. The rehabilitation of the plant will not affect the overall weir height of the plant or change the original physical characteristics of the plant.

The SHP is the only hydro plant operating in the Ambrolauri district and currently has a PPA agreement with a silicomanganese factory and the JSC “Rustavcementi” which are valid for one year and will be prolonged on an annual basis. After the rehabilitation a large part of this will be utilized by the JSC “Rustavcementi” (67%) and the remainder will be supplied to silicomanganese factory (33%). The local distribution company will facilitate the transaction as the plant must utilize the electricity grid for supply to the end-user.

Objectives:
The objectives of the three project activities are:

• Operation of small hydro plants that are currently operating with low efficiency.
• Increase the operating capacity from 4.9 MW to 10.1 MW adding 5.2 MW after rehabilitation, with expected supply of 53.98 million kWh of electricity annually to the Georgian grid.

The proposed CDM project activity will allow the SHPs to produce electrical energy through sustainable means using hydropower resources, to sell the generated output to the grid and to contribute to the global climate change mitigation efforts. This renewable energy will displace electricity produced by thermal power plants and reduce Georgia’s dependency on fossil fuel electricity sources. The overall reduction of GHG during the crediting period is estimated at an average of 9,033 tonnes of CO2 equivalent (CO2e) per year or 90,330 tonnes of CO2e over a ten year crediting period by offsetting more carbon-intensive electricity production from the Georgian electric grid.

Contribution to Sustainable Development:
According to the project participants, this project contributes to sustainable development in Georgia. Specifically, the project contributes as follows to the three aspects of sustainable development: economic, environmental and social aspects:

Economic aspects

• Effect on the region: The project is implemented in relatively rural and economically disadvantaged regions of Georgia. The investments that the projects bring will have a positive impact on the local economy.
• Employment generation: New employment is created during construction works at different project sites of the SHP. The operation of these plants also creates new employment opportunities for the region.
• Project’s impact on other ongoing sectoral programs and plans: The project is a part of the government’s larger program aiming to reduce Georgia’s dependency on primary sources of energy by rehabilitating and constructing at least 15 MW of installed mini hydro electricity generation to help Georgia achieve the target set by the Georgian Ministry of Energy of “ensuring energy security through the re-equipment of existing power capacity and construction of new facilities” (Main Directions of the State Power Sector of Georgia). The project diversifies the sources of electricity generation and decreases dependence on imported natural gas from Russia. Considering that Georgia’s energy sector is heavily dependent on importing gas to supplement hydro-power during electricity shortfalls (which constitutes the largest item in the country’s import bill), reduction of gas imports will have a significant positive effect on the weak Balance of Payments of Georgia.

Environmental aspects

• Substitution of fossil fuels: The project will substitute the power plants on the margin of the electricity system in Georgia. These are thermal power plants running on natural gas.
• Air quality: The project can reduce over 9,033 tCO2 annually. In addition, the project will reduce local pollutant emissions (NOx, SO2, VOCs) associated with electricity generation in Georgia and provide positive health impacts for the local population.
• Contribution to environmental conventions: The project will contribute to meeting the Kyoto Protocol goals by helping to reduce GHG emissions.

Social aspects

• Stakeholders contributions:
• Availability of better living conditions: The project generally contributes to increased energy security in the country, particularly in the region because the plants will improve reliability of power supply.
• Development of intellectual capacity: The training and capacity building of local employees through the Rural Energy Program, under which these plants are being rehabilitated, will contribute to Georgian intellectual capacity.
  

Small Hydro Rehabilitation Project. Number 2:

Project Description:
This presents a bundle of six small-scale grid-connected run of river hydro plants. Five of the plants are rehabilitations to restore the generation capacity. These five rehabilitation projects include Kabali, Kakhareti, Nergeti (Khani-2), Okami and Lopota. The sixth plant, Pshaveli, is a new construction on an existing irrigation system. Rehabilitation and construction work is expected to begin in mid 2007 and the plants are likely to commence operation in 2008.

The USAID funded Rural Energy Program (REP) is supporting the rehabilitation of the small hydro projects (SHP), in Georgia. Georgia has a large number of rural communities with poor energy supply. Many rural businesses and households depend on expensive and environmentally unfriendly generators for electricity, and illegally harvested fuel wood for heat. The REP in Georgia aims at developing in-country capacity to increase the utilization of small hydropower resources and realization of energy efficiency potential in rural Georgia. The primary objectives of the REP includes: 1) increased supply of energy to rural areas; 2) improved management of local energy production; 3) improve in-country capacity to develop and deploy renewable energy applications in rural communities; and 4) improve capacity to more efficiently utilize and protect the local energy resource base.

The six projects considered under the REP in this PDD are described separately below:

Plant Name: Kabali Small Hydro Project (SHP)

Kabali SHP owned by Kabalihesi 2006 Ltd. is located on Kabali River and commenced operation in 1953 with the primary purpose of supplying electricity to the surrounding villages as well as support agricultural activities in the district. It consists of low height diversion weir 5.4 m high and 66.4 m long with water discharge rate 2.5 m3/sec. The power house is currently equipped with 3 horizontal Francis-type turbines totalling 1,500 kW (500 kW each).

One unit (Unit 1) of the SHP was operating with full capacity of 500 kW till May 2006. The average annual electricity generation for last 6 years (Jan 2000-May 2006) is 2.58 million kWh. Remaining 2 units (Unit 2 & Unit 3) were shutdown in 2001. Due to age, poor maintenance and deterioration the SHP is currently not operating. Major rehabilitation of the SHP is required. The weir is heavily damaged, 85% apron is washed out, penstock and power house all need renovation and repair. The 2 turbines (shafts, runners and governors) need refurbishment and repair. After rehabilitation the total capacity of the SHP will be 1,500 kW with expected average annual generation of 9.77 million kWh. The rehabilitation of the plant will not affect the overall weir height of the plant or change the original physical characteristics of the plant.

The SHP is the only hydro plant operating in the Lagodekhi district and is leased for 5 years to Georgian Railway Ltd. beginning October 2005. After completion of the rehabilitation and installation works, the electricity would be utilized by Georgian Railway Ltd. (49%) with the remainder to be supplied to the Kazbegi brewery (13%), SaqAeronavigacia (30%), the Santee Dairy (8%), or other buyers through the distribution company Kakheti Electricity Distribution Company (KEDC).

Plant Name: Nergeti (Khani-2) SHP

Nergeti (Khani-2) SHP owned by community based organization (CBO) “Ubani-2004” is located on Khanstskhali River and commenced operation in 1952 with the primary purpose of supplying electricity to the surrounding villages as well as support agricultural activities in the district. It consists of low head concrete dam 46 m long with the water discharge rate 4.3 m3/sec. The power house building is currently equipped with 1 turbines of 10 kW for manufacturing ice and ice-cream.
The SHP operated till 1964. In 1996, a limited Liability Company Nergeti (Khani-2) SHP took over the Nergeti (Khani-2) SHP. In 2000, it opened as an ice production factory with 1 tone capacity per day. Due to age and lack of proper maintenance, the dam, canal and water intake were seriously damaged. Portions of the plants were previously rehabilitated in XXXX. Currently the head work cannot supply sufficient water needed for proper operation of the SHP and there is real threat of collapse. As a result, the headwork needs major rehabilitation and reconstruction. New Francis-type turbine of 300 kW needs to be installed and the existing ice factory will be dismantled. After rehabilitation the total capacity of the SHP will be 300 kW with total expected average annual generation of 2.1 million kWh. The rehabilitation of the plant will not affect the overall weir height of the plant or change the original physical characteristics of the plant.

After rehabilitation the electricity generated by the SHP will be utilized by the local electricity distribution company, UEDC.

Plant Name: Okami SHP

Okami SHP owned by Ama Ltd. is located on Ksani River started construction in 2003. Construction could not be completed due to lack of finances. The plant has never produced electricity. The primary purpose for the SHP was to supply electricity to the surrounding villages and business activities in the district. The SHP is constructed on Tezi-Okami irrigation system with the water discharge rate 2 m3/sec and the following components have been fully or partially constructed: forebay tank with flashing chamber and emergency spillway, penstock, and powerhouse with two Francis-type turbines. The power house is currently equipped with 2 horizontal hydro units, Francis-type turbines totaling 1,600 kW (800 kW each).

The SHP was never operational but is not heavily damaged. The facility needs minor construction and repair works. At present, two synchronous motors are installed which cannot serve as generators without speed run away controls and excitation systems. Two hydro generators of 800 kW each with exciters need to be purchased and installed. After rehabilitation the total capacity of the SHP will be 1,600 kW with total annual average expected generation 8.74 million kWh. The rehabilitation of the plant will not affect the overall weir height of the plant or change the original physical characteristics of the plant.

After rehabilitation the electricity generated by the SHP will be utilized by the village Okami (2000 households) and wine factory, cement factory and asphalt factory through the local distribution company Kaspi Energosistene, a branch of UEDC.

Plant Name: Lopota SHP

Lopota SHP owned by Energia Ltd. is located on Lopota River started construction in 2003. Construction could not be completed due to lack of finances. The SHP is a diversion type hydro plant consists of a settling basin 6.4 meters wide, 5 meters long and 4 meters high, a silt tank which is 6 m high, 6 m wide, and 36 m long, with water discharge rate is 4.1 m3/sec. The power house building is equipped with 2 horizontal hydro units, Francis-type turbines totaling 2,000 kW (1,000 kW each).
The SHP is yet to be operational but is not heavily damaged. The facility needs minor construction and repair works. Construction of dam and designing of electrical equipments are required. After rehabilitation total capacity of the SHP will be 1,600 kW with average annual expected generation of 12.823 million kWh. The rehabilitation of the plant will not affect the overall weir height of the plant or change the original physical characteristics of the plant.

After rehabilitation the electricity generated would be utilized by the locally operating businesses GWS Wine Factory, Telavi Wine Factory, Marble quarry, Teliani Wine factory through the local distribution company KEDC.

Plant Name: Pshaveli SHP

Construction of Pshaveli HPP is planned on the existing Naurdali irrigation system located on river Stori. Naurdali irrigation system is used for irrigation of 6.3 thousands hectare in Telavi district (I stage of construction). The irrigation system consists of the following buildings: outlet dam with flushing gate on the left side inlet, sluicing outlet with one gallery and fish-passing and left embankment wall. Currently the system is used by the department of irrigation system management. Rated conductivity of Naurdali main canal is 11 m3/sec and the maximum water requirements of existing irrigation system is 4.2 m3/sec.

The SHP has to be constructed and the power house will be equipped with 1 Francis-type turbine of 500 kW. After rehabilitation total capacity of the SHP will be 500 kW with total average annual potential annual generation 2.82 million kWh. The rehabilitation of the plant will not affect the overall weir height of the plant or change the original physical characteristics of the plant. After rehabilitation the electricity generated will be utilized by local electricity distribution company, KEDC.

• Operation of small hydro plants that are not in operation or new hydropower plants that never completed construction.
• Addition of 7.98 MW after rehabilitation from six SHPs, with expected supply of 46.8 million kWh of electricity annually to the Georgian grid.

The proposed CDM project activity will allow the SHPs to produce electrical energy through sustainable means using hydropower resources, to sell the generated output to the grid and to contribute to the global climate change mitigation efforts. This renewable energy will displace electricity produced by thermal power plants and reduce Georgia’s dependency on fossil fuel electricity sources. The overall reduction of GHG during the crediting period is estimated at an average of 14,905 tonnes of CO2 equivalent (CO2e) per year or 149,050 tonnes of CO2e over a ten year crediting period by offsetting more carbon-intensive electricity production from the Georgian electric grid.

Contribution to Sustainable Development:
According to the project participants, this project contributes to sustainable development in Georgia. Specifically, the project contributes as follows to the three aspects of sustainable development: economic, environmental and social aspects:

Economic aspects

• Effect on the region: The project is implemented in relatively rural and economically disadvantaged regions of Georgia. The investments that the projects bring will have a positive impact on the local economy.
• Employment generation: New employment is created during construction works at different project sites of the SHP. The operation of these plants also creates new employment opportunities for the region.
• Project’s impact on other ongoing sectoral programs and plans: The project is a part of the government’s larger program aiming to reduce Georgia’s dependency on primary sources of energy by rehabilitating and constructing at least 15 MW of installed mini hydro electricity generation to help Georgia achieve the target set by the Georgian Ministry of Energy of “ensuring energy security through the re-equipment of existing power capacity and construction of new facilities” (Main Directions of the State Power Sector of Georgia). The project diversifies the sources of electricity generation and decreases dependence on imported natural gas from Russia. Considering that Georgia’s energy sector is heavily dependent on importing gas to supplement hydro-power during electricity shortfalls (which constitutes the largest item in the country’s import bill), reduction of gas imports will have a significant positive effect on the weak Balance of Payments of Georgia.

Environmental aspects

• Substitution of fossil fuels: The project will substitute the power plants on the margin of the electricity system in Georgia. These are thermal power plants running on natural gas.
• Air quality: The project can reduce over 14,905 tCO2 annually. In addition, the project will reduce local pollutant emissions (NOx, SO2, VOCs) associated with electricity generation in Georgia and provide positive health impacts for the local population
• Contribution to environmental conventions: The project will contribute to meeting the Kyoto Protocol goals by helping to reduce GHG emissions.

Social aspects

• Stakeholders contributions:
• Availability of better living conditions: The project generally contributes to increased energy security in the country, particularly in the region because the plants will improve reliability of power supply.
• Development of intellectual capacity: The training and capacity building of local employees through the Rural Energy Program, under which these plants are being rehabilitated, will contribute to Georgian intellectual capacity.