Economics of Optimal Reservoir Capacity Determination, Sediment Management, and Dam Decommissioning

• Published in: Water resources research Vol. 57; no. 7
• Main Authors: Niu, Yuan, Shah, Farhed A.
• Format: Journal Article
• Language: English
• Published: 01.07.2021
• Subjects: dam removal; economics of dams; optimal reservoir capacity; sedimentation management
• ISSN: 0043-1397; 1944-7973
• DOI: 10.1029/2020WR028198

The lifetime net economic contribution of a dam that is subject to sedimentation is likely to depend on the storage capacity of its reservoir, how fast the capacity is lost to sedimentation, and the cost of ultimate decommissioning of the dam. A model is developed for determining the size of initial reservoir capacity of a dam to maximize lifetime net benefits, while allowing for the possibility of sediment management to extend its useful life, and accounting for dam decommissioning costs incurred when this life ends. The model is applied to a proposed hydropower dam. Baseline results are compared with those obtained from building the dam at its designed reservoir capacity. Sensitivity analysis with respect to key economic and technical parameters is also carried out to characterize differences in solutions to the cases with and without sediment management. The overall goal is to improve our understanding of optimal dam sizing under different circumstances. Key Points A model is developed for determining the economically efficient initial reservoir capacity of a dam that is subject to sedimentation Possibility of sediment removal may reduce optimal initial reservoir capacity, extend lifetime of dam, and reduce dam decommissioning costs An illustrative application of the model suggests conditions under which alternative dam sizes should be built to serve economic objectives