Abstract
Feasibility studies on Hydro Power Plants (HPPs) should adequately measure the values of the social, economic and environmental impacts (i.e., its externalities) of HPPs. In this case, the final cost of an energy generation project is lower than the actual value because the impacts are not appropriately assessed. Thus, the objective of this paper is to estimate the total cost of generated energy using a methodology capable of accounting for the cost of the externalities of hydroelectric plants. This study assesses the externality resulting from loss of fishing activity, an economic activity practised by a large part of a population affected by hydroelectric dam construction. To assess this externality, the opportunity cost method and a time series analysis are used to forecast future values. It is demonstrated that when considering only the externality resulting from the loss of fishing activity, the expected cost of energy production could increase significantly. This result indicates the need to calculate all the externalities caused by the implementation of a hydroelectric power plant (HPP) and to incorporate these actual values into the energy production cost, so the enterprise is sustainable and feasible. Our results also facilitate a realistic comparison with other sources of energy generation. Keywords: fishing activity; opportunity cost; forecast; Amazon. JEL Classifications : Q2, Q4. DOI: https://doi.org/10.32479/ijeep.8746
Highlights
Feasibility studies on hydro power plants (HPPs) should adequately measure the values of the social, economic and environmental impacts of hydroelectric power plant (HPP)
The main objective of this study is to present a methodology to incorporate the values of externalities in HPP feasibility studies in a manner that calculates costs as realistically as possible while considering specific economic, social and environmental aspects of each region
It should be noted that the beginning of the generation of the Belo Monte HPP was in April 2016, and that from this date onwards there is a downward trend in productivity with seasonal variation, and, the forecast is from May 2017
Summary
Feasibility studies on hydro power plants (HPPs) should adequately measure the values of the social, economic and environmental impacts (i.e., its externalities) of HPPs. The final cost of an energy generation/production project is lower than the actual value because the impacts are not appropriately or adequately assessed. This failing is demonstrated by numerous and large problems, conflicts and lawsuits involving social, environmental and economic issues caused by HPP implementation (Sousa and Reid, 2010). The externality arises as a result of environmental, social and economic aspects that are not foreseen in the project design. Internalizing externalities means predicting and considering these costs in the initial phase of the project in an economic viability study (Sundqvist, 2004; Tolmasquim et al, 2001)
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