Risk management of hydropower development in China

• Largely attributed to unforeseen geology conditions, safety is critical in hydropower development.
• Resettlement of migrants is the principal risk to clients, whereas quality of works is the first concern to contractors.
• One group's risks are typically related to others', needing collaborative risk management by participants.
• Three Gorges Project plays a key role on producing renewable energy, and providing social/economical benefits.
• Hydropower development should emphasize the interactions between project delivery, environmental, and social processes.

There is a rapidly increasing demand for hydropower in China. However, little research has been conducted to systematically investigate the overall aspects of hydropower development risks. With support of the data collected from a fieldwork survey, this study reports the multiple facets of hydropower development risks in China as perceived by main project participants. All groups have a common view on the criticality of safety, and the groups also have their own priorities, i.e., resettlement of migrants, incompetence of subcontractors, project delay, inadequate or incorrect design, premature failure of facilities and ecological and environmental impacts are the key risks to clients, whereas quality of work, financial related risks, reputation, and claims and disputes are the main concerns to contractors. A case study of Three Gorges Project further demonstrates that, hydropower development risks can be effectively managed by encouraging joint efforts of all participants to achieve the goals on producing renewable energy, reducing emissions of CO2, and providing important social/economical benefits. Future hydropower development should emphasize the interactions between project delivery, environmental, and economical processes to reach appropriate trade-offs among involving stakeholders, by adequately considering the inter-relations between project participants' risks as well as hydropower project's externalities on a broad view.