Abstract
Hydropower development brings a very large number of external benefits which are enjoyed by the beneficiaries for free. These external benefits are defined and the beneficiaries are identified. Models to measure the external benefits are established to reflect their dynamic changes at different periods. To improve the benefit sharing mechanism, a model to internalize these external benefits is established to further compensate those adversely affected. The Z hydropower project in China is taken as the example to calculate its external benefits and their internalization. The external benefits enjoyed by beneficiaries in the surrounding and downstream areas gradually increase from 18 million US dollars in 2006 to 114 million US dollars in 2065, and their compensation standards increase from 4 million US dollars in 2006 to 97 million US dollars in 2065. The external benefits enjoyed by beneficiaries in the power receiving areas increase from 125 million US dollars in 2015 to the maximum of 133 million in 2026, and their compensation standards increase from 38 million US dollars in 2015 to the maximum of 133 million US dollars in 2033. Sharing of external benefits can improve the benefit-sharing mechanism, and properly redistribute the external benefits of hydropower development.
Highlights
The installed capacity of hydropower in China has exceeded 350 GW and the annual hydropower generation has exceeded 120 TWh, and both of which are ranking the first in the world [1]
The beneficiaries in the surrounding and downstream areas enjoy the external benefits of regional economy stimulation, shipping performance upgrading, local climate regulation and water environmental capacity improvement. After enjoying these external benefits in 2006, the beneficiaries in the surrounding and downstream areas shall take out part of the external benefits they enjoyed and compensate those adversely affected by the project development
The governments, enterprises and residents in the surrounding areas and downstream areas of the dam enjoy the external benefits of regional economy stimulation, shipping performance upgrading, local climate regulation and water environmental capacity improvement since the beginning of the hydropower development
Summary
The installed capacity of hydropower in China has exceeded 350 GW and the annual hydropower generation has exceeded 120 TWh, and both of which are ranking the first in the world [1]. With the rising difficulty of resettlement, the increasing pressure on ecological protection, and the declining economic efficiency of hydropower development, the competitive advantage of hydropower in the energy market is getting smaller and smaller. As a clean and renewable energy, the preferential access of hydropower to the grid has not been guaranteed by national laws and systems, and the abandonment of hydropower is a serious problem in China [2]. Scholars around the world have tried to solve these problems. Costanza (1997) estimated the economic value of 17 ecosystem services for biomes [3], and based on these values, other scholars used the payment for ecosystem services (PES) [4,5] or the ecological compensation [6,7,8] to internalize the external impacts on the environment by hydropower development.
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
