Hydroelectric energy — also called “hydropower” — refers to electricity provided by running water. When water flows or falls, it creates its own type of energy that can then be translated into power for homes and businesses. But what are the most critical advantages and disadvantages of hydroelectric energy?
Disadvantages of Hydroelectric Energy
We’ll start with the disadvantages of hydroelectric energy because they often surprise people who aren’t familiar with this type of power. It sounds like a great way to generate energy, but it can cause problems.
1. Environmental Consequences
One of the primary disadvantages of hydroelectric energy is its potential to destroy ecosystems. Plant and animal life in rivers and streams depends on certain environmental factors, from the speed at which the water flows, the level of water in the river bed, and the temperature of the water to the exact mix of species within the body of water.
Additionally, many fish migrate. If they’re unable to migrate upstream due to the dams and other infrastructure required for hydropower, they eventually die out. These fish migrate to spawn and to protect themselves from inappropriate temperatures.
In some cases, hydroelectric power systems de-oxygenate the water. Although aeration can help reverse this problem, it can still have an impact on rivers and their inhabitants.
There’s also the problem of encroaching onto other uses for the water and its surrounding area. Certain specifications must be met for a river or other water source to be used for hydropower, and the presence of certain buildings or even chemicals nearby can make it unsuitable. When we build hydropower systems, we sometimes eliminate the potential for other businesses or agriculture to thrive there.
2. Draining Expenses
It’s expensive to both build and maintain a hydropower plant, which is another one of the primary disadvantages of hydroelectric energy. The one benefit is that these plants typically require fewer workers on an ongoing basis, but that also means a reduction in jobs.
We continue to use coal for power because it’s a reliable source of energy with existing infrastructures. Introducing new ways to generate power means fueling money into the project. This can, in turn, influence stock prices and stock indexes, which you can learn more about by subscribing to Energy Advantage.
3. Limited Space
While a hydropower plant might not look big, it actually requires an extremely large plot of land. This includes not just the river itself, but also surrounding land.
To build a hydropower plant, deforestation must take place, which further disrupts the ecosystem and displaces animals. Once the area is designated as a reservoir, we can no longer use that land for other businesses or for human habitation.
4. Potential for Droughts
Perhaps one of the most important disadvantages of hydroelectric power is the potential for droughts. A drought limits the amount of water flowing through a reservoir, which reduces power availability. This negatively impacts consumers and energy companies both.
Consumers have to pay higher prices for their power because of the lack of supply. It’s the same as any other aspect of economics — supply and demand determine prices.
Additionally, cities and towns might have to run rolling brownouts or blackouts to conserve energy because they don’t have enough to go around. This is particularly true during summers in the hottest areas of the world because immense electricity is needed for cooling systems.
5. Time Required to Build New Reservoirs
It can take years to build a new reservoir, which makes such projects prohibitive for economic reasons. The extended time means more money must be spent on labor. Additionally, every reservoir demands the highest quality materials to ensure its safety and security.
You might have noticed a theme by now.
The disadvantages of hydroelectric energy often boil down to money. Municipalities don’t like to spend money unless it’s absolutely necessary, and while instruments like municipal bonds can help raise money, there’s always a cost down the road.
That’s similar to the stock market. The disadvantages of hydroelectric power are the same as investing in new technology or companies on the exchange. When you have little information about a company, or if you need time to research it, you might miss opportunities.
That opportunity cost is what keeps many people from building wealth through strategic Energy Advantage investments.
Advantages of Hydroelectric Energy
While I’ve expounded upon the many disadvantages of hydroelectric energy, there are also several reasons to praise this type of power. Let’s look at some of the ways in which building hydropower plants can prove beneficial.
1. Use of a Renewable Energy Source
Water is a renewable energy source. We can continue tapping it for years and years to come as evaporation and precipitation occur.
This doesn’t mean that there’s always an abundance of water. During times of drought, as described above, water becomes scarce, especially when it comes to fresh water. Additionally, you can’t build a reservoir on every river. Each reservoir has specific requirements that must be met.
2. Reducing Air Pollution and Water Pollution
It’s true that pollution occurs during the construction of hydropower plants. That falls under the disadvantages of hydroelectric energy. However, once the system is up and running, it’s a green source of energy.
By contrast, coal produces a ton of air and water pollution that threatens people, animals, and plant life. Workers who have dug for coal over the centuries have suffered from serious respiratory disease, and the ongoing pollution can impact civilizations for miles around.
Using clean water to generate electricity has the power to reduce air and water pollution overall and to make the world a healthier place to live. That’s part of the reason many investors are putting their money behind this type of project.
3. Relying on Consistent Conductivity
As you probably remember from your high school science class, conductivity is essential when it comes to delivering energy to homes and businesses. When the energy source itself varies on conductivity, the power becomes less reliable.
Hydropower is generally very reliable, which makes it a good source of energy. Turbines and other infrastructure can control its flow rate and other factors to make it as consistent as possible.
4. Safety for Humans and the Environment
Fuel, such as fossil fuels and coal, are not considered clean forms of energy. They’re frequently dangerous to humans, which makes them a less desirable energy source.
A power plant that explodes can cause widespread property damage as well as loss of life. Hydropower plants don’t have those same risks.
There are a few risks for human beings when it comes to reservoirs. For instance, when they’re not properly constructed, dams can break and flood nearby homes and businesses. We’ve seen that happen during hurricanes and other natural disasters.
On the whole, however, water power is far safer to create than power from fossil fuels and coal.
What Does This Mean for Energy Advantage Investors?
If you subscribe to Energy Advantage, you know that I’m always looking for new energy sources and predicting how they’ll impact stocks and other securities. Regardless of the advantages and disadvantages of hydroelectric energy, we still need to consider it as a potential solution to an ongoing problem.
Energy rates have not been stable at any time, which makes them a constant source of frustration for consumers. Additionally, we need to consider solar power as a potentially reasonable solution for energy shortages across the world.
When we look for alternatives to existing processes, we can improve quality of life as well as find new companies in which to invest. Buying stocks in companies that are heavily involved in alternative energy sources can become an excellent way to diversify your portfolio.
When I set out to create Energy Advantage, I wanted to help people understand not just which stocks I pick, but why I pick them. Digging deep into subjects related to energy, from hydropower to solar power and everything in between, allows me to better predict how specific stocks will move in the future.
You might not want to do all that research into topics like the advantages and disadvantages of hydroelectric power. I don’t blame you.
You can learn from me instead by subscribing to my publications. I teach investors like you about the best ways to approach energy investing, oil investing, and more. You can skip the research — or, at least, most of it — and still benefit from the best stock plays available each and every day.