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Hydropower Advantages And Disadvantages

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4.10 Hydro-Specific Advantages and Disadvantages
Locher & Scanlo (2012) classify hydropower’s advantages and disadvantages on the basis of economic, social and environmental aspects:
a) Economic Aspects
The economic advantages of hydropower are that it provides low operating and maintenance costs, long life span, higher energy efficiency rate (payback ratio and conversion process) and fuel saving. It can also instigate and foster regional development and provide energy independence by exploiting national resources. The economic disadvantages include high upfront investment, dependent on precipitation, require long term planning and long term agreements and require foreign contractors and funding (Locher, Scanlo 2012).
b) Social Aspects …show more content…

Conversely, it can inundate terrestrial habitat, modify hydrological regimes and aquatic habitats. Moreover, water quality, sediment composition and transport, as well as species activities and populations, need to be monitored/ managed (Locher, Scanlo 2012).
Furthermore, according to Head (2000), all private infrastructure development carries certain common risks such as political, currency exposure, force majeure which are beyond the control of the project sponsor. But, hydropower is perceived as posing certain difficulties in a number of areas relating to project definition, risk, financing and regulation, as follows (Head …show more content…

The policy helped open the door for the private sector for the development in BOOT (Build, Own, Operate, and Transfer) model (Ghimire 2012). The policy presented four investment models: a) Sole or joint venture of one or more private national investor, b) Joint venture of the government and one or more national or foreign investor, c) Hundred percent investment of one or more than one foreign investors, d) Joint venture of the national or foreign investors (Ministry of Energy, Government of Nepal

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