Demonstrating the need for a project is of primary relevance to proposed new power projects.  This is best done by governments, at a strategic level where a range of development options can be considered. 

If a proposal for a hydropower project is assessed outside the context of alternatives, it could be approved and constructed even though it is a sub-optimal development.

Failure to thoroughly investigate and demonstrate the need for a new dam project can be politically, socially and economically costly in both the short- and long-term.  Unexpected economic issues arising from lack of demonstrated need have included failure to recover investment costs, low profitability, and poor utilisation rates.