- 2072 Chaitra · 5 marks
Managing three hydropower project risks
Short answer
Risk is managed by identification, analysis, response planning, and monitoring. Geological risk is reduced by extra drilling, flexible support, and experienced contractors; flood risk is transferred by insurance and reduced by dry-season river works; land/licence/transmission delay is avoided by early acquisition, consultation, and parallel transmission construction.
How can risk be managed? Explain how you manage three risks in the hydropower project you identified above.
Risk is managed by identification, analysis, response planning and monitoring. For a hydropower project, three main risks are managed as follows.
| Risk | Analysis | Response (strategy) |
|---|---|---|
| 1. Geological risk (poor rock, tunnel collapse) | High probability, high impact | Reduce: extra drilling and geophysical survey, rock classification (Q-system), flexible support design; contingency reserve; experienced tunnelling contractor |
| 2. Flood and natural hazards | Low probability, very high impact | Transfer: Contractor's All Risk insurance; Reduce: design the headworks and diversion works for the design flood; schedule river works in the dry season |
| 3. Delay in land, licence and transmission line | Medium probability, high impact | Avoid / reduce: early land acquisition and compensation, community consultation, PPA and licence secured before financial close, parallel construction of the transmission line; liquidated damages in the contract |
Each risk gets a risk owner, a trigger (e.g. unexpected rock fall, rising river level) and a budget in the contingency reserve, and it is reviewed in monthly meetings.
✓ Answer checked by Claude Opus 5.5 (high effort)
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