Study: Large dams are uneconomical
Published: Apr 22, 2014 9:11 AM | Updated: Apr 22, 2014 9:14 AM
A new research paper by Oxford University has suggested that mega-dams are uneconomical worldwide, despite policy makers often suggesting otherwise.
A new research paper by Oxford University has suggested that mega-dams are uneconomical worldwide, despite policy makers often suggesting otherwise.
The paper - published in Volume 69 of Energy Policy, a journal by the university - suggested that large dams on average cost 96 percent more than initially estimated and take 44 percent longer to build than scheduled.
This study was based on a sample of 245 large hydropower dams in 65 countries built between 1935 and 2007.
"We find that even before accounting for negative impacts on human society and environment, the actual construction costs of large dams are too high to yield a positive return," reads the paper.
The findings have triggered the interest of Basel-based NGO Bruno Manser Fund (BMF), which pointed out that the authors had also probed Sarawak's Bakun Dam.
"The Bakun Dam was meant to cost RM2.5 billion. While the official expenditure figures have risen to RM7.4 billion, the two scientists, Sovacool and Bulan, put the total cost of the Bakun Dam at RM15.325 billion,” it said in a statement.
"When construction work commenced in 1994, the dam was meant to be operational in 2003. It was actually completed in 2011 but, even today, not all eight turbines are operational.”
In essence, BMF said the Oxford University study shows that planners and policy makers often under-estimate the costs and time required to implement large dam projects.
BMF said that, based on its calculations, the time over-run for the Bakun Dam was almost 90 percent and cost over-run in the range of 200-500 percent.
"As the Bakun Dam was financed by the federal government - mainly through the Employees Provident Fund and the Pensions Fund - Malaysia's citizens are having to pay the price for the over-optimistic forecasts of the Bakun Dam promoters," it said.
With more similar projects coming in under the RM341 billion Sarawak Corridor of Renewable Energy project, BMF warned that taxpayers can expect to foot a large bill if there are cost over-runs.
BMF said the release of the paper was timely as Asean ministers are currently attending the Asean Renewable Energy Week 2014 in Kuala Lumpur.
"The ministers’ meeting in Kuala Lumpur ought to take these findings seriously,” it added.
"The time is ripe for turning the focus away from mega-projects that involve great financial risks and moving towards small-scale energy sources that incur lower environmental and social costs.”
The paper - published in Volume 69 of Energy Policy, a journal by the university - suggested that large dams on average cost 96 percent more than initially estimated and take 44 percent longer to build than scheduled.
This study was based on a sample of 245 large hydropower dams in 65 countries built between 1935 and 2007.
"We find that even before accounting for negative impacts on human society and environment, the actual construction costs of large dams are too high to yield a positive return," reads the paper.
The findings have triggered the interest of Basel-based NGO Bruno Manser Fund (BMF), which pointed out that the authors had also probed Sarawak's Bakun Dam.
"The Bakun Dam was meant to cost RM2.5 billion. While the official expenditure figures have risen to RM7.4 billion, the two scientists, Sovacool and Bulan, put the total cost of the Bakun Dam at RM15.325 billion,” it said in a statement."When construction work commenced in 1994, the dam was meant to be operational in 2003. It was actually completed in 2011 but, even today, not all eight turbines are operational.”
In essence, BMF said the Oxford University study shows that planners and policy makers often under-estimate the costs and time required to implement large dam projects.
BMF said that, based on its calculations, the time over-run for the Bakun Dam was almost 90 percent and cost over-run in the range of 200-500 percent.
"As the Bakun Dam was financed by the federal government - mainly through the Employees Provident Fund and the Pensions Fund - Malaysia's citizens are having to pay the price for the over-optimistic forecasts of the Bakun Dam promoters," it said.
With more similar projects coming in under the RM341 billion Sarawak Corridor of Renewable Energy project, BMF warned that taxpayers can expect to foot a large bill if there are cost over-runs.
BMF said the release of the paper was timely as Asean ministers are currently attending the Asean Renewable Energy Week 2014 in Kuala Lumpur.
"The ministers’ meeting in Kuala Lumpur ought to take these findings seriously,” it added.
"The time is ripe for turning the focus away from mega-projects that involve great financial risks and moving towards small-scale energy sources that incur lower environmental and social costs.”
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