Drought Management: The Functions of Hydropower

Droughts pose significant challenges to water resource management and societal well-being. This piece explores the role of the hydropower industry in drought management and mitigation.  

Analysing existing literature, case studies and a proposed methodology for assessing the socio-economic value of drought management functions of hydropower infrastructure, the potential benefits and challenges associated with their implementation are highlighted.  

Although recent projections show increased risks in the sector as the world gets warmer​, hydropower infrastructure, while exposed to drought impacts, holds the capacity for drought risk mitigation; ensuring basin resilience and socio-economic benefits during dry conditions.

The future impacts of droughts

One study estimated the global exposure to different extents of drought over the next 50 years. The findings show that up to 5% of the global GDP will be exposed to severe and extreme droughts in the next 30 years, from up to 4.7 billion USD in the 2030s to 10 billion USD (in 2005 prices) in the 2050s. (See Figure 1 below).

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Figure 1 - Global GDP exposure to droughts for the historical period and the 2030s and 2050s under different climate scenarios. Taken from Sun et al. (2022) 

Another study intimates that up to 25-35% of the global GDP, as well as 1.5 billion people, are already affected by these extremes. This study suggests that up to an additional 20 trillion USD (in 2015 prices) and 1.7 billion people will become affected by droughts and heat waves by the end of the century, as demonstrated in Figure 2 below.

Global exposure to compounded drought and heatwaves. Taken from Yin et al. (2023)

Figure 2 - Global exposure to compound drought and heatwave impacts. Taken from Yin et al. (2023) 

The role of hydropower

In existing literature, there are many references to the multifaceted role of the hydropower industry in drought management. Multiple studies have highlighted the significance of multipurpose dams in water storage and release for mitigating water scarcity during dry periods.  

These structures act as strategic reservoirs, capturing water during periods of high precipitation and releasing it during droughts to sustain water supply for various sectors – including agriculture, industry and domestic use.  

Many multi-purpose dams initially built for hydropower generation also contribute to regulating river flows, which helps in balancing water availability throughout the year. By controlling the release of water, dams can mitigate the impacts of extreme low-flow periods during droughts and prevent excessive flooding during periods of heavy rainfall.

Hydropower infrastructure is estimated to store 2225 - 2430 km3 of water globally – up to 30% of the world’s artificial storage.  

The storage function of hydropower reservoirs has a multiplier effect on water-intensive economic activities, such as household water provision, irrigation and other agricultural purposes. In addition, there are recreational benefits generated by the reservoir. In some cases, these seemingly secondary uses of a hydropower plant generate more economic value than the power plant itself, as illustrated in Figure 3 below.

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Figure 3 - Economic benefit of hydropower plants by installed capacity. Taken from ​Bonnet et al. (2015)​

Dams associated with the hydropower industry also provide a unique advantage in drought management through their energy generation capabilities. Hydropower plants, often integrated with dams, can produce electricity by harnessing the power of flowing water. During droughts, when other energy sources may be limited, hydropower can provide a reliable and renewable source of electricity, contributing to the stability of the energy supply.

Sustainable implementation

Social equity and community participation are key considerations highlighted in the literature. Drought management strategies should ensure that the benefits and costs of hydropower projects are distributed equitably among different societal groups. Engaging local communities, indigenous populations and other stakeholders in the decision-making processes is critical. This helps to foster inclusivity, promote sustainable development and minimise conflicts arising from water allocation and dam-related activities.

Alteration of river ecosystems, including changes in flow patterns, sediment transport, and fish migration routes, have been a concern associated with large-scale dam construction. These ecological changes can disrupt aquatic habitats, affect biodiversity, and impact the livelihoods of communities dependent on river ecosystems. Another consideration in the literature is the potential displacement of communities due to dam construction.

Large hydropower projects often require the inundation of large areas, leading to the relocation of communities residing in the affected regions. Such displacement can have socio-economic implications, including the loss of traditional livelihoods, cultural disruption, and challenges in resettlement and compensation. Therefore, sustainable hydropower solutions are required, with due consideration to social and environmental risk management and mitigation.

Overall, it is widely demonstrated that hydropower infrastructure has the capacity to contribute significantly to drought management and mitigation efforts. By providing water storage, regulation and hydropower generation capabilities, dams can enhance water supply resilience and support socio-economic development. However, careful planning, environmental impact assessment, stakeholder engagement and the integration of sustainable practices are essential for maximising the benefits of hydropower dams while minimising adverse consequences.  


The hydropower drought management potential evaluation is based on the recognition of the multi-purpose nature of each hydropower dam and upstream reservoir, as well as the economic benefits they provide.  

Several studies showed that even in extreme drought, hydropower generation can be sustained at 80% of normal values. In addition, there is a high reliability of water storage during drought, associated with water supply and irrigation.

Estimations show that as of 2021, the hydropower industry accounts for more than 43 billion USD worth of benefits from drought management services provision through irrigation, water supply and water storage annually.  

By 2100, with drought impacting a greater share of the global GDP, the role of hydropower as a multi-purpose dam operator and water manager will increase considerably, with over 80-400 billion USD worth of drought management benefits.


The hydropower industry has a crucial role to play in drought management and mitigation. It has the capacity to provide essential functions such as water storage, regulation and energy generation. This can provide socio-economic benefits crucial for withstanding droughts, such as irrigation, navigation and municipal water supply worth up to 218.88 billion USD annually, a conservative estimation reaches 43.78 billion USD annually.  

With an earlier assessment done by IHA on hydropower’s role in flood protection, the cumulative annual economic benefits of hydropower’s flood and drought control functions are estimated to account for 314.88 billion USD globally – 0.35% of the world GDP.  

The hydropower industry stands as a key player in drought response, holding the key to unlocking a multitude of socio-economic benefits, while providing vital water management functions.  

To fully harness this potential, strategic planning of water use and storage must take centre stage. Collaborative efforts involving multiple stakeholders and careful environmental considerations are imperative, as the complexities of drought management transcend sectoral boundaries and require a holistic approach.

Please get in contact if you would like to request the methodology used in this article.


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