THOUGHT LEADERSHIP

Understanding the business risks of small dams and weirs

Small dams may pose significant business risks that are often under-appreciated, even if these dams don’t pose a safety risk to the community. Managing risk is a key part of running any sustainable business and understanding how to mitigate risks requires that they are properly identified, analysed and evaluated.

The Guidelines on Risk Assessment prepared by ANCOLD (Australian National Committee on Large Dams) provides a detailed process for quantitative analysis of dam safety risks for large high-consequence dams, but adopting this process for small dams and weirs can be costly and may not be clearly justifiable.

For owners of small dams, ANCOLD has a number of other guidelines that can be useful for managing these dams, including Guidelines on the Consequence Categories for Dams and Guidelines on Dam Safety Management. Assigning a consequence category for a small dam can be a useful first step in understanding the risks – and will consider the impacts on community safety, on the environment, on the dam owner’s business, and on other social factors including impacts on health, community and business dislocation, loss of employment and damage to recreational facilities and heritage.

The consequence categories are graded from ‘Low’ to ‘Extreme’. These categories are used for a number of purposes including:

  • regulatory requirements (depending on which state the dam is in)
  • recommended surveillance and monitoring activities
  • maintenance and operational requirements
  • spillway flood capacity
  • dam design standards.

The focus of ANCOLD’s consequence category guidelines is on wider community safety and impacts, but not on the dam owner’s business. This potentially leaves the dam owner exposed to significant unidentified business risks. Ideally, these should be managed consistently alongside all the other business risks.

A structured approach to assessing the business risks of small dams

ANCOLD’s Guidelines on Risk Assessment is a useful starting point for undertaking a business-focused risk assessment of small dam assets. As with all risk assessments, it is useful to follow a structured approach, including the following steps:

  1. identify the hazards
  2. brainstorm the failure modes
  3. estimate the likelihood of the failure
  4. estimate the consequences of failure
  5. evaluate the risks
  6. develop risk mitigation measures.

Such a risk assessment approach is ideally completed with a dam engineer working closely with the business owner to capture both the dam engineering and the business-specific knowledge. 

1. Hazards

Dams need to be properly designed, constructed and maintained to continue to perform their function safely. It is essential to avoid becoming complacent. Floods are a significant hazard to all dams and cause around 50% of all failures in large, well-engineered embankment dams. Small dams are often constructed with no or minimal engineering input into the design or construction and as a result may have inherent defects that may not manifest themselves until years later.

Dams in general do not require a lot of maintenance; however, a lack of suitable maintenance can lead to failures. A key maintenance activity is management of vegetation so that trees do not establish themselves in the embankment. Tree roots can create leakage paths that could lead to piping or internal erosion, and ultimately to a failure.

2. Failure modes

A key part of the expertise of a dams engineer is understanding how different types of dams can fail, which is crucial for identifying potential failure modes. The ANCOLD guidelines on risk assessment recommend completing a site inspection of the dam to help identify the key ways in which the dam could fail. The inspection should be conducted with the dam owner to look for evidence of failure modes, such as:

  • deformation or cracking, which may indicate issues with the stability of the dam
  • wet areas or flows through the dam, which may indicate a piping failure
  • spillways where the original crest is filled in or raised to increase storage in the reservoir, which can often be an area of concern
  • erosion close to the dam from operation of the spillway, which could lead to undermining and instability of the dam wall.

Typically, failure modes are identified in a workshop setting and then prioritised by criticality. The full list of failure modes is then reduced to a shortlist of those that are most critical.

3. Likelihood of failure

ANCOLD’s Guidelines on Risk Assessment provides an approach that can be used for detailed quantitative risk assessments; however, such approaches require significant effort to apply and can be costly. For small dams, it can be more appropriate to use a risk matrix approach, similar to that outlined in the Australian standard AS ISO 31000 Risk Management.

Typically, most businesses have a standard risk assessment procedure that can be adapted to give a qualitative or semi-qualitative assessment of likelihood. An experienced dams engineer will be able to assign a likelihood for each of the credible failure modes based on engineering judgement and some simple calculations (e.g. using regional flood estimates and estimates of the spillway discharge capacity). Failure modes for dams that are well designed and constructed will often have a likelihood rating of ‘Rare’ or ‘Unlikely’. The likelihood may be higher for dams in poor condition or with identified deficiencies.

4. Consequences of failure

A business risk assessment focuses on the consequences to the business, rather than the wider community, if the small dam were to fail. This will be unique to each business and will need input from the owner. It can be assessed by working through a series of questions about the need for the dam and its purpose – for example:

  • What is the water in the dam used for? Can the business function without the water or the storage space in the dam?
  • Are there alternative sources for the water that can be quickly accessed, and will these be sufficient for normal operations or would it be necessary to reduce operation?
  • Is there business infrastructure downstream of the dam, and could a failure of the dam cause failure of these assets (e.g. pumping stations, water treatment plants or other dams) that would impact business operations? Can the business operate without these assets?
  • How will customers be affected and what are the reputational consequences of not being able to supply or only partially supply?
  • What are the financial implications for the business, and is there insurance that would cover the cost of the event, including consequential losses?
  • How long would it take to replace the dam (including refilling) and the other assets?

5. Evaluation of risks

Using the business’s standard risk assessment tool enables comparison of the small dam risks against other business risks on a consistent basis (e.g. safety risks to employees). The level of risk will indicate the urgency of addressing the risk. This process allows a clearly articulated justification to be presented to the business for putting in place any required mitigations. It also enables the owner to focus on the key business risks rather than become distracted by issues with lower risk.

6. Risk mitigation

Mitigations can address either likelihood or consequences and will need to be tailored to the specific risks and the business needs. Addressing the risks by reducing the likelihood will typically involve physical works to the dam – for example, increasing the size of the spillway to reduce the likelihood of an overtopping failure, or managing vegetation to reduce the likelihood of a piping failure.

Where reducing the likelihood is not practical or not sufficient, addressing the consequences may be an effective approach. Addressing the consequences may involve options such as securing alternative water supplies, contingency planning to reduce impacts on customers, or insurance to cover the financial losses.

Bringing it all together for better business insights

Entura has undertaken qualitative and semi-qualitative small dam risk assessments for a number of clients in a cooperative environment to bring together our dams engineering expertise with the owner’s knowledge of their business. This is a cost-effective approach that has provided clarity on the specific business risks related to small dams, allowing targeted risk mitigation measures to be put in place. The process has provided important insights enabling owners to justify business decisions and reduce their overall business risk exposure.

If you have small dams and would like to talk with us about assessing your business risks, contact Phillip Ellerton or Richard Herweynen.

About the author

Paul Southcott is Entura’s Senior Principal – Dams and Headworks. Paul has an outstanding depth of knowledge and skill developed over more than 3 decades in the fields of civil and dam engineering. He is a highly respected dams specialist and was recognised as Tasmania’s Professional Engineer of the Year in Engineers Australia’s 2021 Engineering Excellence Awards. Paul has contributed to many major dam and hydropower projects in Australia and abroad, including Tasmania’s ‘Battery of the Nation’, the Tarraleah hydropower scheme, Snowy Hydro, and numerous programs of work for water utilities including SeqWater, Sun Water and SAWater. His expertise is a crucial part of Entura’s ongoing support for upgrade and safety works for Hydro Tasmania’s and TasWater’s extensive dams portfolios. Paul is passionate about furthering the engineering profession through knowledge sharing, and has supported many young and emerging engineers through training and mentoring.

September 20, 2024