Investment is often associated with various facts about the investor. These factors can be asking yourself question like whether or no you support the idea behind the creation of the asset , or whatever activity makes the asset available in the market. A good example of a suitable asset is energy companies that deal in the production of hydroelectricity. When dealing with this particular field , you should know the following advantages and disadvantages that are associated with the production of hydroelectric energy.
Amongst the pros of the use of hydroelectric energy is its nature of being both renewable and reliable. Being renewable means that the energy cannot be used up. On the other hand, the process of energy production can only be stopped due to extreme and rare cases such as the occurrence of serious droughts that cause a drop of water levels. Due to its unfailing availability, this source of energy is now preferred for the large scale production of electricity.
The production of hydroelectric energy is environment friendly and is not hazardous. There are no contaminants released into the environment when the energy is being produced; the only pollution is possible only during the construction of the power plant. Moreover, the production of hydroelectric energy does not involve any fuels or dangerous chemical reactions. If you compare and contrast this method of energy production to other forms such as the use of fossil fuels, it is significantly safer.
The rate of energy production is affected by the level of water that is present in the magazines. The amount of water that is in the magazines can be changed according to preference and hence the rate of energy production. With reference to demand, the energy production can be manipulated.
However, this form of production of energy also comes with a few of its setbacks. When the power plant is being established, there will be a lot of negative changes that have to be implemented. First, there will be damming of rivers that leads to the death of the animals living in them such as fish. There are also some issues that are associated with the development of new roads and installation of power lines.
There is a lot of expenditure that is associated with the establishment of a power plant. On the other hand, the amount of workers who will be need to keep the plant up and running is small and the maintenance costs are low.
The production of energy and the prices of energy in the market are directly proportional to the amount of water that is available. This means that droughts can have very negative effects to this form of energy production.