| Summary: | Although hydropower does not directly consume water, its generation frequently conflicts with other uses, notably irrigation, because its release schedule does not always correspond to the timing of water use by other activities. This article analyses a case from the Walawe river basin, Sri Lanka, where economic efficiency can be raised by reducing releases from the dam for irrigation for the benefit of hydropower generation. The tradeoff is analysed in financial and managerial terms and different options for reducing irrigation diversions are reviewed. Although the high level of current diversions for irrigation warrants the possibility of improvement in management, it is shown that finding ways to reduce supply faces technical and socio-political constraints that make the realization of economic benefits costly and difficult.
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