Where a dam serves multiple purposes, a hydroelectric plant may be added with relatively low construction cost, providing a useful revenue stream to offset the costs of dam operation. It has been calculated that the sale of electricity from the Three Gorges Dam will cover the construction costs after 5 to 8 years of full generation.

Since hydroelectric dams do not burn fossil fuels, they do not directly produce carbon dioxide (a greenhouse gas). While some carbon dioxide is produced during manufacture and construction of the project, this is a tiny fraction of the operating emissions of equivalent fossil-fuel electricity generation.