Modeling dynamics and adaptation at operational and structural scales for the ex-ante economic evaluation of large dams in an African context

Abstract

Dams can produce electricity and ensure water security, but at the same time they radically alter the hydrological regime of rivers with significant consequences for the economic and environmental welfare of the region in which they are located. Cost-benefit analysis (CBA) is currently the most frequently used framework for the economic evaluations of dams. Changes at different time scales influence the economic appraisal of dams. However, change and adaptation at both the operational and the structural level are often not included in the CBA evaluation. Not including change and adaptation limits the realistic estimation of cost and benefits, and the appreciation of resilient solutions that offer satisfactory responses for a large set of future scenarios. In this paper we consider the specific features of large dams in an African context, and identify methods for an economic evaluation that takes into account for change and adaptation at both the operational and the structural scales, as well as their interplay. These methods are then applied to the ex-ante evaluation of a system of existing dams on the Senegal River Valley. Results indicate the economic potential of the dams under changing conditions, for both adaptive and non-adaptive reservoir operation strategies.