I would not bother with dams at the moment. They are either broken or more likely just bugged. You can get a working dam (although almost certainly not worth it for the $, tens or even hundred+ of MWs is terrible) but it is very counterintuitive most of the time. When you expect a dam to function it often will not and you will have no idea why. The water spawners might need some tinkering with (when the height of water is not sufficient for the dam to work but enough to turn off the spawner you are screwed) or even the dam mechanic itself before they become useful. At least this is what I think atm.
Edit:
You can try how they work with the unlocked all and unlimited money mods, try Islands map. There you can pop down a 1600 MW one (which is extremely OP

). Experiment with the height a bit, etc. IRL you would build a dam, and wait for the reservoir to fill up, so it can produce electricity. You would have to pick a location though, so that it can accept that amount of water and not flood around. This currently doesn't work very well if at all.
DAMned DAMS!
Edit2:
Given their cost, you have to make at least 300-350 MW for it to be worthwile somehow, and double that for it to be great (they are great and kinda cheap source for electricity irl, although they cost a lot to build). They might need changing so that you pay upkeep from their length and/or height and not static one. Currently you can pay 3200 for a small dam making 16 MWs, and same for a huge one doing 1600MWs. First one is not even worth considering, second is godsend.
Edit3:
Screw it! Dams are certainly very fun mechanic, coupled with the dynamic water they offer a lot of fun even as a single part of the game! There would be more if you could set up walls, etc to redirect rivers, seal parts of land, or modify land to suit your new dam (this is almost aways the case irl, why not in game?!).
Why is there no terrain tool (even costly!) for us to play with? Sad, very sad story!
