Is it just a mere coincidence?

In recent time, Rs. 160 million per MW has become a rule of thumb. Any project above Rs. 160 million per MW seems to be less attractive. Thus, Rs. 160 per MW can be regarded as a threshold for the current PPA rates with a design discharge of Q40%.

The threshold suggests us that the project becomes more attractive if it is below Rs. 160 million per MW. In simple term, “the lower the project cost, the better”. 

But, developers have a different idea. Below is a comparison of two new upcoming projects. 

Project Name	Khare	Super Dordi
Location	Dolakha	Lamjung
Type	RoR	RoR
Installed Capacity	24.1 MW	49.6 MW
Net Head	333.77 meters	584 meters
Design Discharge	8.43 m3/sec at Q40%	9.9 m3/sec at Q40%
Total Sellable Energy	139.22 GWh	289.464 GWh
Status	Generation license acquired, PPA signed, Financial Closure done.	Generation license acquired, PPA signed, Financial Closure is ongoing
Length of weir	26.80 m	17 m
Side Intake (W X H)	3.6 m x 1.3 m, 2 Nos.	3.5 m x1.2 m, 3 Nos.
Desanding	61 m x 7 m x 6.02 m; 2 chambers	82m x 10m x 7.57 m; 2 chamber
Tunnel	4796 m	4864 m
Penstock	870 m	1185 m
Powerhouse (LxBxH)	35.70 m x 17.80 m x 25.65 m	45 m x 15 m x 10.2 m
Tailrace Canal	105.5 m	96.0 m
Transmission line	8.81 km	5.2 km
Cost	Rs. 3.922 billion	Rs. 8 billion (approx.)
Cost per MW	Rs. 162.7 million	Rs. 161.3 million

Super Dordi is double in size compared to Khare. It is extremely high head project. High head project has its own advantage. Theoretically, the cost per MW tends to be at lower side in high head projects.  

Now, if we look at the discharge, both the projects have similar design discharges (9.9 and 8.43 cumecs). When you have a similar design discharge, the size of the structures will also be similar. However, the length of the structures might be different which will play a significant role in determining the project cost.

Interestingly, there is no night and day difference between these two projects when it comes to the length of headrace tunnel, penstock pipe, tailrace and transmission line. The structures to be constructed are more or less the same.

The only significant difference in the total project cost will be undoubtedly in the power house and the electro-mechanical heading. However, these headings will either increase proportionately or increase in a decreasing trend due to economies of scale. For instance, the cost per kilowatt for buying 10 MW electro-mechanical equipment will be significantly lower compared to the cost per kilowatt of 1 MW equipment. 

At last, what surprises me is the cost per MW of these projects. Both have similar per MW cost. This, to me, is very weird. 

I totally understand that hydropower project cost is very site specific. Infrastructures like access road play a major role. But I must say that I am fully aware of these parameters and have carefully chosen the ‘similar projects’ for this comparison.

Am I too suspicious or everyone is thinking what I am thinking at the moment?