Mega-Dams Don't Even Make Economic Sense, Say Researchers

We’re not shy about the fact that we’re against big hydro because it is so environmentally destructive. New research confirms that a focus on small hydro instead makes much more sense.

The rash of enormous dams being built in the Amazon against the wishes of the people who live there, and which are laying waste to its rivers, plants and animals, are just that – a waste.

They aren’t even economically viable, says the research, published in the journal, Energy Policy. To get governments to approve them, agencies systematically underestimate the cost to build mega-dams. 

The purpose of mega-dams is to provide inexpensive, "clean" electricity (after they destroy everything around them).

It turns out they tend to run 96% over budget, according to a University of Oxford Saïd Business School study, which examined 245 megadam projects in 65 countries, including Brazil and China. And they take 44% longer to build than they are budgeted for. Their conclusion: the high price tag and time it takes to build these projects don’t add up to a "positive, risk-adjusted return."

They point to these examples: The Belo Monte Dam being built in Brazil’s Amazon, with indigenous groups fighting it every step of the way, had an initial price tag of $14.5 billion; it’s now expected to cost twice that. China’s infamous Three Gorges Dam will cost $26 billion over the next 10 years, and Pakistan’s Tarbela Dam increased the country’s debt by 23%. 

Brazil’s Belo Monte dam will divert nearly the entire flow of the Xingu River along 62-miles and its reservoirs will flood more than 100,000 acres of rainforest and local settlements. Over 40,000 people have to move. And that’s just one of the 20 hydropower plants Brazil plans to spend $93 billion on. In total, they threaten 2500 square miles of Amazon rainforest and the lives of thousands of people who live there.

Indigenous people face Brazil’s army, which is necessary to get the dam built in the face of utter despair and protest:

Amazon Belo Monte dam

But there’s a megadam renaissance now, with emerging nations across the world planning a new round of hydro projects to deliver "clean" inexpensive electricity. As rainfall becomes more erratic due to climate change, they are also viewed as an important way to control the availability of water.

The
problem is, as we’ve been seeing in California and Texas, is that severe drought means there’s little water available for big hydro, and plants could end up being shut down. Last year in California, hydro plants generated less power than in the past 21 years, says National Geographic, supplying just 9% of the state’s power, down from 14% over the past 30 years.

And in the Amazon, where the Belo Monte Dam is under construction it is already affecting the very rainwater it would supposedly be storing. Because of forest clearing to build the dam, rainfall has dropped 10% – the presence of forests is what causes the rainfall in the first place.

Like nuclear, mega-dams are always paid for by taxpayers (accruing heavy government debt) – not by the private sector. That should tell you something about the risk they perceive in these hugely expensive projects.

This "most thorough independent evaluation of large dams ever," is a "damning indictment" of the industry, Peter Bosshard, policy director of International Rivers, told Thomson Reuters Foundation. "Even after following large dam projects for the past 20 years, I was stunned by its findings." 

Read our article, World is on Massive Hydroelectric Building Spree.

Small Hydro Preferred

On the other hand, smaller dams do make economic sense, they say. They are much more efficient and start delivering electricity quickly, in contrast to mega-dams, which can take decades to complete. And they don’t displace entire communities, the way China’s Three Gorges Dam has done and Brazil’s Belo Monte dam is doing. A dam being fought in Patagonia would destroy one of the last truly wild places on Earth.

There’s even a new film out on the subject, DamNation, which explores changing attitudes toward big hydro from being in awe of engineering feats to the realization that big dams destroy big watersheds.

"When obsolete dams come down, rivers bound back to life, giving salmon and other wild fish the right of return to primeval spawning grounds, after decades without access," say the filmmakers. " 

A new website, Small Hydropower World, shows where projects are installed around the world and where the potential is. Developed by the United Nations Industrial Development Organization (UNIDO) and the International Centre on Small Hydro Power, it shows that North America, for example, has tapped 86% of its small hydro capacity compared to under 4% in  some regions in Asia.  

Worldwide, about 75 GW of small hydropower is installed, nowhere near its 173 GW potential, they say.

Visit Small Hydropower World:

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