Unsupported browser

For a better experience, please update your browser to its latest version.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Study says hydropower dams may not be economically viable

New research by Oxford University suggests that in the majority of cases large dam projects are not economically viable due to higher than predicted construction costs.

The study, undertaken by the university’s Saїd Business School, claims that instead of obtaining hoped-for riches, emerging economies risk drowning their fragile economies in debt owing to ill-advised construction of large dams.

The study is based on 245 large dam projects from 65 different countries and found that construction costs of large dams are on average +90% higher than their budgets at the time of approval, in real terms.

The study also found that the magnitude of cost overruns has not declined over time and dam budgets today are as wrong as at any time during the 70 years for which data exist. The researchers behind the report claim that dam planners seem to not learn from the past.

In a statement the researchers have said: “Brazil’s Itaipu dam, built in the 1970s, suffered a +240% cost overrun that impaired the nation’s public finances for three decades. Despite producing much-needed electricity, Itaipu will likely never pay back the costs incurred to build it. Regardless, Brazil is currently building the controversial Belo Monte hydroelectric project, which has proved non-viable even before opening and awaits a fate like Itaipu’s.”

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.