Risk Analysis of the Hydroelectric Development and Irrigation Scheme Projects
Risk Analysis of the Hydroelectric Development and Irrigation Scheme Projects
Hydroelectricity refers to electricity harnessed through hydropower. “Hydropower uses the energy of moving water to produce electricity. Also known as hydroelectric power, it's been used to generate electricity for over 100 years and currently provides about 10 percent of the country's electricity.” (FERC, 2010) Irrigation is the artificial watering of land. It allows countries or regions who normally do not get enough rainfall to still successfully grow crops. The similarity between the two case studies is that both revolve around water, using technology to harness its powers
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The hydroelectric project used histogram distributions to assess each individual risks, this may be more accurate but it is very time consuming, also considering that whatever result they get is based on the stipulation that a catastrophe will not occur. Should one occur, it would throw off all the assessments made. The irrigation project used a simpler approach, focusing on the “combined effects of all the risks that might affect an element either indirectly in terms of distributions of percentage changes or directly in terms of costs expressed in dollars.” (Cooper, Grey, Raymond, & Walker, Page 271, 2005)
Risk Assessment
Risk Assessment for the irrigation project was easier to follow because the steps made sense. Appropriate risk assessments were taken into account and did not discount catastrophes, which to me makes it more realistic. Both projects deal with water, which is a natural resource and is not always predictable. After reading both analyses, it didn’t feel like the assessment for the hydroelectric project was well thought out in the contingency area.
Due to this, the irrigation project seems to have a more compelling risk assessment. Perhaps due to it being a much smaller scale project, they are better able to represent possible risk scenarios and plan for them.
Reference
What is hydropower? (n.d.) Retrieved from
The final factor that led to the great success of the PWP dealt with risk management. The team used early risk identification and mitigation to minimize the effects of any possible risks. The risk management process also provided assurance to Aurora Water that risks were properly evaluated and could be contained from a financial standpoint. A formal risk management plan was developed in early 2007, with a focus on controlling the project cost. The risk analysis process provided an extra benefit to the PMT by highlighting the need to manage project risks such as environmental mishaps to avoid actions that would trigger regulatory enforcement action. A proper risk analysis reduced cost increases due to change orders and avoided permitting and land acquisition delays.
Irrigation - The supply of water to land or crops to help growth, typically by means of channels.
Therefore, the risk process places a high emphasis on risk workshops, initial risks, and how risks are identified throughout the course of the project. The next two sections describe different methods of identifying risks.
Because the two projects are significantly different in size, the coefficient of variation (a relative measure of risk) is more
Assess the likelihood of occurrence and the impact of the assigned hazard to where you live. Tell us your assigned hazard, the vulnerability of your area to that hazard, then the likelihood that the hazard will occur. Rate the risk assessment on a scale of 1 to 10, with 1 being low risk and low vulnerability and 10 being high risk and high
TB2’s operating profile is slightly better than the Met Atrium’s operating profile given TB2 has lower volume and demand volatility risk than Met Atrium. The other operating risk factors are similar for both the projects. In terms of the Financial & Structuring risk factors, TB2 has a reasonable PPA Tail compared
As we all understand, the Earth has many landmarks and it is these physical features that create an abundant and organized system within which we thrive. One of the most abundant natural resources on the planet is water and the importance of this element is as crucial as any other. For the fortunate few who get to utilize it, this amazing reserve provides us with our necessity for daily consumption as well as our ability to grow just about anything we please. Common irrigation practices are essential for gathering water into a contained area to grow crops that would not typically survive in areas without heavy rainfall. As a matter of fact, “irrigation is an ancient practice that originated along the Tigris and Euphrates Rivers in what is now Iraq” and is now the result of an estimated 40 percent of all crops grown around the world (Water Encyclopedia). This tactic has provided many different cultures with numerous varieties of crops as well as growth in crop yield which in turn dramatically advances human civilization. As we develop into a more progressive society, the tools and systems used to grow our crops also become more intelligent as well as sustainable
The two risks will be illustrated using a Fault Tree diagram. Fault tree analysis was first developed by Bell Laboratories in 19621. It provides a structured format for “estimating the likelihood of the top even by tracing back the causes until it has identified simple events or component states for which the likelihood can be estimated2. In the process you continue to look for underlying causes until you have a clear idea of the failure and what may be done to manage or mitigate the failure. When developing the fault tree it is helpful to ask “why” to uncover an underlying cause. These causes are linked in the tree as “and” (where both items are necessary for the tree component to occur) and “or” (where either tree component can occur and contribute to the failure). An illustration presented by the authors of our text can be found on page 217. The top failure is the water is cold. Components that can contribute to this are either “there is no
What aspects of the project might invalidate the ranking you just derived? How should we correct for each investment’s time value of money, unequal lifetimes, riskiness and size?
Hydropower is a renewable resource that is clean, affordable and durable. This resource is clean due to the way you gather the energy from it. hydroelectric and coal-fired power plants produce electricity in a similar way. In both cases a power source is used to turn a propeller piece called a turbine, which then turns a metal shaft in an electric generator (the motor that produces electricity). A coal-fired power plant uses steam to turn the turbine blades; whereas a hydroelectric
A more advanced version of hydropower is hydroelectric power. It is the electricity created by water. For example, when the waterwheel receives water pressure, it begins to turn. Connected to a motor, the wheel begins to generate energy. Eventually, the power is dished out and distributed
Project 1 embedded risk can be assessed by evaluating the market risk, success/failure rate of the project.
First, the use of hydro energy resource, which is still debatable if it’s renewable or nonrenewable, cannot always be suitable for flat or dry regions and in areas where natural disasters occur. So counties with natural disasters or regions that are not suited is most likely not going to have a hydropower, as mentioned in (Marmulla, 2001, p. 55), dams are unnatural effecting species like fish causing migrations because of habitat loss. This can lead to extinction of species, affecting many ecosystems, since the fish starts to migrate to different areas changing the population balance. For example, Nicola, Elvira,
Hydroelectric power plant is one of the major power plants all over the world in order to create electricity. It is also one of the best renewable energy sources on the planet earth. In ranking, Canada is the third largest country to produce hydroelectricity power. The efficiency of this power source is 90% and this is very impressive as the percentage of efficiency is very high. Hydro power plants generate 24% of the world’s electricity. More than 1 billion people are associated with hydro power plants as they use the power supply from hydro power plants.
Project finance is best understood in terms of a risk allocation which reconciles the potentially conflicting objectives of borrowers and lenders by utilizing the long-term economic and commercial linkages between the sponsors, lenders and third party participants involved with a project. (Howcroft &Fadhley, 1998).