Uprating Austria

14 November 2006

Limberg II pumped storage plant will more than double capacity at the Kaprun hydro scheme in Austria upon its completion in 2012. Simon Jones takes a look at the features of this project, and offers an insight into the future of hydro power in the country

The Kaprun hydroelectric plant played a pivotal role in Austria’s post-war economic revival. Construction began in the late 1930s, continuing under the Nazi regime with slave labour and in conditions so harsh that Verbund, the owner, has recently paid war reparations. US funding under the Marshall Plan allowed work to recommence in 1947. Completion of the 100m high dam walls on the Mooserboden reservoir in September 1955 helped end years of chronic power shortages across eastern Austria – the huge project was even celebrated in a famous film ‘White Gold.’ Plans to expand Austria’s oldest large-scale hydro plant were first drawn up in the early 1970s, and an earlier version of the current project was already licensed in 1994.


Construction is currently underway at Limberg II, the Euro 365M (US$467M) peak-load pumped storage project that, upon completion in 2012, will increase capacity at Kaprun from 353MW to 833MW. It will operate on the existing Mooserboden and Wasserfallboden reservoirs in the lower Kaprun valley. The reservoirs have a live storage of 81.2 and 84.9Mm3 respectively, and a mean level difference of 366m for pumped storage. The power conduit between Mooserboden and Wasserfallboden will have a maximum flow of 140cm/sec The project includes 7.5km of road tunnel and escape tunnel; a cavern measuring 62m x 25m x 44m; a 4km-long, 7m-diameter headrace tunnel; a 750m-long, 5.5m-diameter inclined shaft; a 600m-long, 8m-diameter tailrace tunnel; two valve chambers; and a surge tank.

The underground extension to Kaprun is the second-biggest power plant development underway in Austria, and one of several new investments in the country’s profitable hydro sector by Verbund unit Austrian Hydro Power (AHP). Along with other planned pump storage and run of river plants, Limberg II is central to Verbund’s drive to cut power imports and market clean hydro supplies in Germany and other EU markets.

Getting started

AHP’s supervisory board approved construction of Limberg II at the 50-year-old site in February this year, and work got underway five months later. An initial phase will complete all preparatory measures for plant construction. These include installation of the required access tunnels – two new tunnels will be built and one existing tunnel extended. In the main construction phase due to start in May 2007, all plants will access the cavern site at Limberg through this tunnel system extending over 5km.

Two reversible Francis turbines with a nominal capacity totalling 480MW will be installed in the completed cavern. The units will be commissioned in 2011 and full operation should start in March 2012, with 1.3GWh annual average production from pumped storage mode – the current plant averages 670MkWh/yr. The fully automated plant will be monitored from Kaprun’s main control room.

A Euro 13M (US$16.65M) detail design and site supervision contract was awarded to Pöyry Energy last March – the engineering unit of Verbund and the Pöyry group of Finland has over 40 years experience installing hydro facilities within the Austrian Alps. ‘Euro 230M (US$294.56M) worth of contracts have already been signed, almost all of them with Austrian firms and half with businesses in and around Salzburg,’ says AHP spokesman Michael Amerer.

Only the access buildings and storage areas for tunnel excavation material will be above ground. ‘The special feature of this power plant is the fact that it blends in almost entirely with the existing landscape – i.e. it is completely subterranean in caverns,’ says AHP head Herbert Schröfelbauer. ‘After completion, only an access gate to the machinery caverns will be visible from the outside.’

AHP has cooperated on all environmental aspects of the project with the Salzburg Institute of Ecology. In particular the firm is using techniques for rapid soil regeneration and replanting developed at the institute. Blocks of turf and other vegetation will be removed from site prior to excavation, put into storage and returned once work is completed. Environmental experts from SIE will also be involved with the project on a day-to-day basis until completion.

As a result, AHP’s so-called ‘invisible plant’ faces none of the protests often triggered by such major projects. In contrast environmental groups across Tyrol are already mobilising against four new hydro investments announced by the state government in July. ‘Power supply is a business with great traditions in Kaprun, it generates many jobs and forms the basis for our prosperity,’ says town mayor Norbert Karlsböck. Even the local locksmith has won a contract from AHP, part of the 500 man/years employment secured for the local economy under Limberg II. By December 2008 around 250 workers will be on site at peak times.

Austrian power demand, up 25% in the last decade, continues to grow at 2-3% per year. The country’s WIFO economic research institute predicts this will continue at least until 2010. Austria only began importing power in 2001; imports fell to 2800GWh last year, but reliance on foreign supplies is not welcome in either government or industry circles. Domestic output is also set to fall over the next few years, with several major plants coming to the end of their operating life and tougher EU water directives limiting some hydro output. Limberg II is part of a total Euro 11.5B (US$14.7B) investment in plant and grid capacity agreed by Austria’s power sector until 2015, aiming to meet steady growth in electricity demand while limiting import dependence. ‘The 480MW new capacity at Limberg II will make an important contribution to supply security, covering about 10% of Austria’s peak load demand,’ says Schröfelbauer. ‘We need to develop these new domestic hydro sources in order to cover future energy demand, especially at peak periods, and to hold power imports as low as possible.’

AHP and Salzburg AG have agreed to jointly build and operate a new run-of-river plant on the river Salzach. The Euro 63M (US$80.7B) Werfen plant will supply 76.5MkWh/yr exclusively into the regional grid – covering 10% of the federal state’s household power demand. The new plant, due for completion in March 2009, will also optimise output at four existing hydro units along the river. Here too AHP has cooperated with experts from SIE and Salzburg’s water authorities to minimise environmental impacts. It has also set up a forum to liaise over the project’s impact with local residents and representatives of tourism and other local businesses.

Verbund’s hydro-based expansion strategy is already having a dramatic impact on results. In October the group announced a 49% jump in year-on-year net profits to Euro 410M (US$525M) for the first three-quarters of 2006 – operating profits moved ahead by over 60%. Earnings trends are well above the European utility average, while hydro-based supplies have a low cost base.

Hydro output accounted for 75% of Verbund’s 25,550GWh generation. Vienna-based AHP is by far the country’s largest hydro-producer, operating plants in seven of Austria’s nine provinces – its 88 hydro plants have a combined 6000MW turbine output. Verbund Deputy Chairman Michael Pistauer points to Verbund’s fast-growing international distribution and trading volumes, ‘which enable us to profit fully from rising wholesale prices in the European electricity markets.’ The group has already sold over half its 2007 power production.

Sector growth

Low temperatures last winter caused a significant cut in water supply for hydro generation – 17% below the long-term average, and 13% below the previous winter. The negative effect of this drop in output was more than compensated by rising power prices and strong export sales. An intelligent hedging strategy in Austria and core European markets, above all France and Germany, won Verbund the full benefits of increased wholesale prices.

The government has reacted to current sector growth by putting a new tax on profits from hydro plants. At present each utility with hydro in its supply mix (in practice almost the entire Austrian power sector) pays an annual levy to the government, based on the total size of its hydro plants. The Austrian Finance Ministry has already published a draft law replacing this system, which raises very modest revenues, with a turnover-based tax. Initial estimates suggest this will amount to a 1-2% take on revenues, and Finance Minister Karl-Heinz Grosser insists this should have little impact on profitability or customer bills.

However, Grosser’s plans are strongly opposed by Austria’s federal states, each of which has a majority stake in its own regional utility. State governments have grown used to steadily growing dividends and other income from these holdings in recent years. Upper Austrian Prime Minister Josef Pühringer denounced the plans as ‘a quite unacceptable bid by the national government to snatch money from federal state coffers.’

More helpful is the government’s draft renewables law, designed to increase this segment’s share of the power market from 4 to 10% by 2010. The revised system doubles the output limit for small hydro plant subsidies to 20MW, so bringing another 150MW capacity on-stream to 2011. ‘These changes to the regulatory framework will attract investors back into the hydro sector,’ argues Werner Steinecker, President of Austrian power association VEO. ‘In general this is good news for the many hydro plant builders who were locked out by the old 10MW limits.’

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