Study reveals hidden costs of hydropower

KARACHI: A new study, released on Tuesday, highlights the staggering true cost of hydropower in Pakistan, including previously overlooked environmental and social impacts. Experts argue that this hidden price tag makes renewable energy a more viable option.

At the launch event of the report ‘The True Cost of Hydropower’, experts argued that Pakistan should shift towards renewable energy sources rather than investing in new dam projects. They pointed out that developed countries are increasingly dismantling large dams due to their detrimental effects.

The report, jointly published by the Pakistan Research Institute for Equitable Development (PRIED) and ZiZAK consultancy, examines the financial and social repercussions of key hydropower projects in Pakistan, including Tarbela and Neelum-Jhelum. Experts such as Abrar Qazi, Dr Hassan Abbas, and Badar Alam discussed the significant environmental and social costs associated with these projects.

The report also highlighted the negative impact on the Indus Delta, which has suffered from sea intrusion due to dam construction in northern Pakistan. Unlike developed nations where delta regions are flourishing, the Indus Delta has become arid.

According to the findings, the actual cost of generating electricity from hydropower exceeds Rs50 per unit when considering externalities. Specifically, the cost is Rs53.61 per unit at Tarbela and Rs50.55 at Neelum-Jhelum when accounting for the full impacts.

The report features two case studies. The first evaluates Tarbela Dam, which was designed as a multipurpose project. The second focuses on the Neelum-Jhelum Hydropower facility, a run-of-the-river project.

For Tarbela, the study identifies major costs from carbon emissions associated with the reservoir lake and the loss of ecological services. Silt trapping from the dam contributes to the erosion of the Indus Delta. Despite its primary role in water storage and irrigation, the study reveals that Tarbela has caused more harm than benefit to water resources, a factor not yet included in electricity cost calculations.

In the case of Neelum-Jhelum, cost overruns, financing expenses, and social impacts are major contributors to high generation costs. Seismic risks pose a significant threat, with inadequate public awareness and emergency preparedness for potential breaches.

The report emphasizes that its goal was not to provide precise dollar values but to outline the general costs of hydropower in Pakistan. The estimates are intended as a starting point for further detailed research, which could refine these figures and explore additional externalities.Further studies are recommended to enhance the accuracy of these estimates and address any overlooked externalities.