'Fools and liars' - major new report slams mega-dams, as tensions rise over Georgia's Khudoni project

A new report published on March 10 by a team of researchers from the University of Oxford, based on the largest ever study of large hydroelectric dams (245 in 65 countries) has found that in most cases large dams are economically not viable and few, if any, will realise their planned benefits. The study assessed the costs, construction time, and benefits of all large dams built around the world since 1934, and further concluded that the severe cost and construction delays that so often dog large dams (defined in this research as those that exceed 15 metres in height) mean they can be seriously damaging to the economies that attach so much hope to them.

In an interview with the Georgian English language media site The Financial, study researcher, Dr Atif Ansar, Associate Fellow of the Saïd Business School at the University of Oxford, was uncompromising in his assessment of Georgia's plans to realise the massive Khudoni Hydro Power Plant on the Inguri River in the remote Samegrelo-Zemo Svaneti region.

According to Dr Ansar, as cited by The Financial on March 10:

“Khudoni is huge. It is planned to have a 200-metre tall concrete double-arch-gravity dam wall along with 3 turbines with a nominal capacity of 233.3 MW each having a total capacity of 700 MW making it one of the largest dams under construction. As far as I know, the project was planned to be started in the early '80s and it has not yet been started. This is a typical early warning for a dam disaster project – to be delayed and delayed. As a general rule of thumb, many smaller, more flexible projects that can be built and go quicker, and are more easily adapted to social and environmental concerns, are preferable to high-risk dinosaur projects like conventional mega-dams”.

The Khudoni project, on the planners' table for close to forty years now, is one of a trio of large hydropower plants – the others being Namakhvani and Paravani – that the Georgian government is pinning the country's energy future on, with a major emphasis on exporting overseas. These aims have been strengthened by long-standing support from the likes of the World Bank and other international financial institutions, with things now starting to come to a head, as Bankwatch has been reporting on intensively in the last nine months during our on the ground collaboration with local communities facing resettlement to make way for mega-dams.

We have seen shoddy consultations and now – increasingly – intimidation of local communities protesting the construction of these vast projects: on March 8, around 500 villagers staging a road block in the Adjara region were violently dispersed by police and special forces. The villagers had blocked the road to prevent the construction of a tunnel for the 185 MW Shuakhevi hydropower plant that the EBRD is considering to finance with a loan of up to EUR 63.7 million.

And while tensions are rising within Georgian communities, as Bent Flyvbjerg, principal investigator for the Oxford University dam study, reminded in BBC coverage of the new report, dams "are not carbon neutral, and they're not greenhouse neutral". The climate change impact of these vast infrastructure projects, often obscured by the promoters of these supposedly 'clean energy' sources, has much wider reach – just one aspect of mega dam construction involves extensive flooding of vegetation under dam reservoirs produces large volumes of methane, a greenhouse gas recognised to be roughly 20 times more potent than carbon dioxide.

Build and be damned

What is to explain the rationale and thinking behind such economically questionable, precarious investments? Again, as quoted in The Financial this month, Dr Ansar was outspoken as to underlying reasons behind the mega-dam drive still controversially taking place in Georgia and elsewhere in countries such as Brazil and China, and across the developing world generally.

“It is unclear,” notes Ansar, “why the politicians like to build large dams. There are two reasons in my opinion. One – they are optimistic about the idea, which we call being a 'fool', and two – they are strategically misrepresenting the extra costs, which we call being a 'liar'. People optimistically think that large dams will bring them a lot of benefits and they look at such examples as the Hoover Dam in the USA, which is an often-heard argument in favour of building new large dams. Instead of relying on the outcome of just one project, decision-makers should consider evidence for the entire population. In the case of large dams, the probability of failure dominates. If leaders of emerging economies are truly interested in the welfare of their citizens, they are better off laying grand visions of mega-dams aside.”

Georgia and the Energy Community

Georgia is now intent on joining the Energy Community, having applied for membership last year. Its entry later this year (October 2014) is thought to be little more than a formality.

And why not? The Energy Community certainly has as its main goal the widening of the EU energy market, and thus being part of it makes it easier for countries such as Georgia to export electricity to the EU or other Energy Community countries. This would not be a problem – and indeed inter-connection is necessary in principle for a renewables-based system – if all the countries had the same level of environmental and social protection in place, and low levels of corruption, that is, if there was a level playing-field.

However, this is clearly not the case for the Energy Community countries, in part because the Energy Community Treaty does not require them to adopt all of the energy-relevant EU acquis, and furthermore because even for those parts that they are required to adopt, they are not implementing properly. Moreover, local courts don't function adequately, and the Energy Community does not have sufficient capacity nor enforcement mechanisms to change the situation.

All of the Energy Community countries, to varying degrees, have electricity export ambitions, yet at the same time as criticising the lack of implementation of the acquis, the Energy Community is encouraging them to realise bad projects, with initiatives such as the Regional Energy Strategy or the list of Projects of Energy Community Interest. Clearly, bad projects are a problem whether the electricity generation is for domestic use or for export, but it seems particularly unjust that the environment, people's health and their whole way of life have to suffer for projects that don't even produce electricity that will be used locally.

Regretably, as things now stand, Georgia's controversial, one-track mega-dam drive appears very much fit for Energy Community purpose.

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