How Do Hydroelectric Dams Work: Facts & Costs

hydroelctric dam

Hydroelectric dams are a source of clean, renewable energy. Currently, hydropower accounts for 16 percent of the world’s energy. Of the world’s renewable energy, hydroelectricity constitutes an impressive 71 percent.

While there are some environmental concerns regarding hydroelectric dams, hydropower advantages are significant and usually outweigh its limitations. Especially when comparing hydroelectric energy vs. solar energy costs and sustainability, hydropower holds a definite lead. Here’s what you need to know about hydroelectric dams and the costs to build one.

What is a Hydroelectric Dam?

A hydroelectric dam is a component in a hydroelectric power plant. A dam is a massive human-made structure that is designed to contain a body of water in a reservoir. Its primary purpose is to produce hydroelectric power. However, it also functions to control river flow and regulate flooding.

Hydroelectric dams are usually built on top of riverbeds to withhold water, resulting in higher water levels and the possible flooding of surrounding areas. They can be made of rock, concrete, or a combination of both.

Although there are several types of hydroelectric power plants, a hydroelectric dam plays a vital role in an impoundment facility and a pumped storage facility.

Impoundment Plant

A hydroelectric impoundment facility is the most common form of hydroelectric power plants. This type of plant’s system design is composed of four primary parts: a dam, a turbine, a generator, and transmission lines.

The central and most visible part of the plant is the hydroelectric dam. The dam creates a reservoir by withholding a natural body of water. The hydroelectric power plant relies on the kinetic energy or power of flowing water to turn the blades of a turbine, producing mechanical energy. The water is systematically released from the hydroelectric dam and flows through the turbine. In turn, the turbine spins a series of magnets inside a generator. As the magnets rotate past copper coils, it generates electric energy that powers our homes and businesses.

Pumped Storage Plant

In a hydroelectric pumped storage plant, there are two reservoirs at different elevations. The dam creates a lower reservoir, which pumps water to the upper reservoir to store electricity, also known as potential energy, until it is needed. When electrical demand is high, the water is released back to the lower reservoir, turning the turbine, thereby generating electricity.

A pumped storage plant follows all the basic principles of an impoundment facility. However, it has a useful feature of storing energy, similar to a battery. As a result, hydroelectric pumped storage plants are extremely valuable to meet the varying demands for electricity.

hydroelectric dam

How Does a Hydroelectric Dam Work?

The dam is the most crucial component of a hydroelectric power plant. The intake is located on the side of the reservoir. Water is drawn through the intake when the dam’s control gate opens. The force of gravity pulls the water into a penstock or a pipeline that leads to the turbine.

The amount of electricity that can be produced depends on the water flow and the amount of hydraulic head, or the distance between the water surface and the turbines. In general, the farther the water falls or the amount of hydraulic head, the more speed and power it has because of the pressure of the water above. Additionally, the more water that falls through the turbine or water flow, the more the turbine will spin, generating more energy. As a result, a hydroelectric dam’s power output is proportionate to the hydraulic head times the flow rate.

Famous Hydroelectric Dams

While some dams are famous for their energy output, others are famous for their engineering marvels.

Contra Dam, Switzerland

The Contra Dam is a concrete arch dam that used considerably less concrete because of its unique slender design, reducing the cost of construction and infrastructure.

This dam utilizes Francis turbines and generates approximately 234 GWh per year.

Largest Hydroelectric Dam in the World: Three Gorges Dam, China

The Three Gorges Dam is currently the largest hydropower dam in the world. It spans 2.3 kilometers and impounds the Yangtze River. Its energy output is approximately 87 TWh per annum, while energy production is not its only purpose. The dam also serves to increase the shipping capacity of the Yangtze River and prevent flooding downstream.

World Record in Energy Production 2016: Itaipu Dam, Brazil

While the Three Gorges Dam is the largest hydropower dam in the world and held the title for the world record of annual hydroelectric power production in 2014, the Itaipu Dam beat it in 2016. It currently has a power output of 89.5 TWh and is composed of four dams: a main concrete dam, a concrete wing dam, an earth-fill dam, and a rock-fill dam.

Hydroelectric Dams in the US

The Hoover Dam is likely the most iconic dam in the world. Formerly called the Boulder Dam, it impounds Lake Mead, one of the largest lakes in the world. Hoover Dam utilizes various types of turbines, including the Francis turbine and the Pelton turbine, and produces an annual power output of 4.2 TWh.

The Monticello Dam is a 93-meter concrete arch dam in California. Its spillway is called the Glory Hole that in uncontrolled and sits near Lake Berryessa, California’s seventh largest man-made lake. Interestingly, the exit end of the spillway is famous as a full pipe for skateboarders.

Bath County Pumped Storage Plant in Virginia held the title for the world’s largest pumped storage plant for 20 years since 1985. After refurbishing its six turbines, it regained its title in 2009. Bath County Pumped Storage Station currently has a generation capacity of 2,772 MW.

Hydroelectric Dams Costs

Hydropower is one of the least expensive forms of renewable energy in the United States. However, the actual cost can vary because of various engineering difficulty, hydraulic heads, flow rates, power outputs, and types of turbines.

How Much Does It Cost to Build a Hydroelectric Dam?

Hydroelectric power is capital-intensive and requires extensive planning and construction time. Régie de l’énergie, an energy regulator in Québec, Canada estimates that it takes four to seven years to build a hydroelectric power station after all government channels have approved the project. Larger hydroelectric power stations may take about ten years to build.

A large portion of the cost of a hydroelectric dam depends on the existing civil engineering structures. Site-specific variables determine approximately three-quarters of the building cost. However, if a project requires an “average” amount of civil engineering, it is only cost-effective with a minimum power output of 25 kW.  This is defined as some adaptation is needed but is not overly complicated, as well as grid connections and standard quality hardware.

There is a substantial fixed-cost component of a hydroelectric power’s design and construction stage. As the maximum installed power output reaches 25 kW, the hydropower system becomes more economically viable.

A large-scale hydropower project may range from $1,000 to $3,500 per kW. Projects at remote sites without sufficient infrastructure and existing transmission networks can cost significantly more than $3,500 per kW because of the higher transport and logistical costs of development. This estimate seems reasonably accurate since the new 250 MW Pulangi 5 hydropower project, slated for the Philippines, has an estimated cost of USD 800 million, or a cost of $3.2 million per MW.

Be sure to budget in the costs for environmental impact studies and litigation.

Hydroelectric Dams Operating and Repair Costs

Fortunately, the ongoing cost to operate and maintain a hydroelectric dam is low. Hydropower plants require little maintenance but eventually need repairs, rehabilitation, or upgrades. These repairs often serve to boost generating capacity and try to capture more energy yields.

Annual operation and maintenance costs are represented as a percentage of the investment cost per kW per year. The International Energy Agency or IEA estimates a cost of 2.2 percent for large hydropower and 2.2 to 3 percent for smaller operations. Hydropower plants have a global average of approximately 2.5 percent operating costs.


While an oil investing strategy may currently be a top choice for investors, hydroelectric power has a positive future as well. Hydroelectricity now provides nearly seven percent of the nation’s energy from 2,500 hydroelectric dams. The potential for cost reduction comes hand in hand with technological innovations as well as improvements in major civil engineering techniques such as tunneling and construction.

The United States Department of Energy collaborated with over 300 experts to produce the 2018 Hydropower Vision report. This study defines the societal, environmental, and economic advantages of hydroelectric power if the United States increased its hydropower from 101 gigawatts (GW) of capacity in 2015 to 150 GW by 2050. The report also provided a roadmap of hydropower growth.

With the new interest in clean, renewable energy, many more investors can weigh the cost of a new hydroelectric dam as well as upgrades to existing dams to lower our dependence on fossil fuels and exploit the power of water.

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