American University of Science and Technology
Faculty of Business and Economics
Approval of the Senior Project
Candidates: Nabil Almawi
Aline Mourad
Degree:
Bachelor of Science in Business Economics
Title:
Hydropower The Value of a Nation
The following professor nominated to serve as the advisor of the above candidates
has approved this work.
Advisor:
Dr. Bassam Hamdar
Signature:
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Dedication
We would like to begin by thanking our beloved university AUST for the constant
support and help as well as the encouragement throughout our Bachelor’s. It has surely
been a blessed and comfortable 3 years.
We would also like to thank our Chairperson Dr. Bassam Hamdar for his time and help
from the beginning of our journey at AUST. He has showed interest in every idea and
thought we shared and was always available to correct and add his special touch to our
work.
Moreover, we extend a note of appreciation to Dr. Waleed Akar, a professor in the
Economics department, for his valuable presence, comments and suggestions throughout
our academic experience.
And finally, we would like to dedicate this senior project to our family and friends who
have shown encouragement and support as well as our fellow classmates and students at
AUST and finally to the new generation hoping this project would leave a mark and
interest them in their future evolving lives.
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Table of Contents
Chapter One Introduction
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1.1 Overview
1.2 Background on Lebanese Electric Situation
1.3 The National Energy Efficiency Action plan for Lebanon (NEEAP)
1.4 Need for the study
1.5 Problem definition
1.6 Scope of the study
Chapter Two Literature Review
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1
2
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2.1 Overview
2.2 Introduction to hydropower
2.2.1 History of Hydropower
2.2.2 Types of Hydropower
2.2.3 Sizes of Hydropower Projects
2.2.4 Stages of a Hydropower Projects
2.3 Introduction to economic development
2.3.1 What do we mean by Economic Development
2.3.2 What is Economics
2.4 Energy, Hydropower & Development
2.4.1 What is Energy
2.4.2 Energy & Economic Growth
2.4.3 Job creation opportunities in Hydropower
2.5 Hydropower & the Environment
2.6 The Economics of Electricity
2.6.1 Electricity Market
2.6.2 Levelized cost of Electricity from Hydropower
Chapter Three Research Methodology
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3.1 Capital Cost Analysis
3.1.1 Overview
3.1.2 Meaning of Costs.
3.1.3 Types of Costs
3.2 Cash flow Analysis
3.2.1 Perspective of the Total Investment
3.2.2 Perspective of the Investor
3.2.3 Perspective of the Dividends
3.3 Capital Budgeting
3.3.1 Net Present Value
3.3.2 Internal Rate of Return
Chapter Four Results and Findings
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4.1 Overview
4.2 Data & the Observed Model
4.2.1 Input Variables
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4.2.2 Cost Sheet
4.3 Results & Findings
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Chapter Five Conclusions and Recommendations
5.1 Overview
5.2 Conclusion
5.3 Recommendation
5.4 Limitations
5.5 Future Research
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References
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List of Figures
Page
Figure 2.1 Four Specific Value Chain Elements
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Figure 2.2 The Minimum To Average Levelized Cost of Electricity For
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Small Hydropower In The European Union
Figure 2.3 Levelized Cost Of Electricity For Hydropower Plants By Country
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and Region
Figure 2.4 LCOE Pf 2,155 Hydropower Projects Plotted Against Their
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Cumulative Capacities That Were Evaluated In The U.S
Figure 2.5 LCOE Of Small Hydropower Projects In Developing Countries,
Broken Down By Source
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List of Tables
Page
Table 1.1 Results of The Evaluation of NEEAP 2011 – 2015
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Table 2.1 Sensitivity of LCOE Of Hydropower To Different Discount Rates
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And Lifetimes
Table 2.2 A Study Shows This Wide Range of Possible Economic Values
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Table 2.3 Economics and Tariffs For New Hydropower Plants In Lebanon
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Table 3.1 The First 5 Discounted Payments
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Table 4.1 Cost Model For Hydro Power Plant 2 MW, Input Variables Sheet
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Table
Table 4.2 Discounted Cashflow Analysis Regarding Income, Expenses
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Table 4.3 Average Cost Per Kwh Over Project Life
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Table 4.4 Summary results of Micro-hydro cost model
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Abstract
Water is the main constituent of Earth's streams, lakes, and oceans, and the fluids of most
living organisms. It is vital for all known forms of life. It plays an important role in the
world economy. Approximately 70% of the freshwater used by humans goes to
agriculture. Large quantities of water, ice, and steam are used for cooling and heating, in
industry and homes. It is also widely used in industrial processes.
Hydropower or hydroelectricity refers to the conversion of energy from flowing water
into electricity. It is considered a renewable energy source because the water cycle is
constantly renewed by the sun. Electricity is produced using turbines and generators,
where mechanical energy is created when moving water spins rotors on a turbine. This
turbine is connected to an electromagnetic generator, which produce electricity when the
turbine spins. It is known as the largest contributor of all renewable energy sources and
accounts for 6.7% of worldwide electricity production. It is an abundant, low cost source
of power and also flexible and reliable source of electricity compared to other renewable
options, as it may be stored for use at a later time.
Keeping in mind the Lebanese economic and electrical state, implementing hydroelectric
power supply would definitely be a solution to the electricity problem and would play a
crucial role in economic growth.
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