Economic Value of Storage in Multireservoir Systems

Tilmant, Amaury; Arjoon, Diane; Marques, Guilherme Fernandes

doi:10.1061/(asce)wr.1943-5452.0000335

Cited by 31 publications

(17 citation statements)

References 16 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…In Tilmant et al . [], a methodology is presented to calculate the economic value of surface reservoir storage services, and to help evaluate the individual benefits provided by current, and future storage infrastructure.…”

Section: Introductionmentioning

confidence: 99%

“…Hedging rules to reduce the probability of more severe future water shortage at the expense of present small deficits are analyzed and extended in the work of You and Cai [2008] and combined with reservoir rule curves in a mixed integer linear programming optimization model in Tu et al [2003]. In Tilmant et al [2012], a methodology is presented to calculate the economic value of surface reservoir storage services, and to help evaluate the individual benefits provided by current, and future storage infrastructure.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

The economic value of coordination in large‐scale multireservoir systems: The Parana River case

Marques

Tilmant

2013

Water Resources Research

Self Cite

View full text Add to dashboard Cite

[1] The coordination of reservoir operation is critical for water systems' efficiency. Improved coordination requires sharing information, demanding a clear understanding of the potential gains and its distribution among the users to motivate engagement in coordinated operations and bearing of transaction costs. In a multiuser, multireservoir system, the evaluation of the potential coordination gains is not trivial because it requires the simultaneous evaluation of numerous trade offs. This paper presents a methodology to identify the likely upper and lower bounds in multireservoir system benefits, providing a reference framework for analyzing the economic value of coordination. The methodology is applied to a large-scale multireservoir system in Brazil. The methods rely on the comparison between two management scenarios. The first one mimics typical system operation based on individually designed rule curves, which are likely to perform on the lower bound. This is compared with fullscale system-wide optimization through an Stochastic Dual Dynamic Programming algorithm to represent fully coordinated reservoir operation (upper bound). For our case study, results indicate that better coordination reduced spills and improved releases timing according to reservoirs characteristics and location, allowing overall gains between 3% and 8% in energy and 7.9% in revenues, with revenues mostly improved by coordination in dry years. Larger reservoirs presented the highest gains in absolute terms, while the smaller ones presented the highest relative increases. By indicating individual gains at each reservoir, valuable information is produced to support future negotiations and benefit sharing among different agents, being water agencies or power companies.

show abstract

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

The economic value of coordination in large‐scale multireservoir systems: The Parana River case

Marques

Tilmant

2013

Water Resources Research

Self Cite

View full text Add to dashboard Cite

show abstract

“…Kirby and Mainuddin (2006) address this issue and propose a dynamic, seasonal, water accounting approach in which the major water uses are considered.Those efforts are useful but the linkage to the economic data is often implicit due to the mismatch between the spatial and temporal scales of the hydrologic and economic variables. Moreover, storage services are also ignored despite the fact that storage infrastructures contribute to basin-wide benefits and/or costs (Tilmant et al, 2012).…”

Section: Introductionmentioning

confidence: 99%

A dynamic water accounting framework based on marginal resource opportunity cost

Tilmant

Marques

Mohamed

2015

Hydrol. Earth Syst. Sci.

View full text Add to dashboard Cite

Abstract. Many river basins throughout the world are increasingly under pressure as water demands keep rising due to population growth, industrialization, urbanization and rising living standards. In the past, the typical answer to meet those demands focused on the supply side and involved the construction of hydraulic infrastructures to capture more water from surface water bodies and from aquifers. As river basins have become more and more developed, downstream water users and ecosystems have become increasingly dependent on the management actions taken by upstream users. The increased interconnectedness between water users, aquatic ecosystems and the built environment is further compounded by climate change and its impact on the water cycle. Those pressures mean that it has become increasingly important to measure and account for changes in water fluxes and their corresponding economic value as they progress throughout the river system. Such basin water accounting should provide policy makers with important information regarding the relative contribution of each water user, infrastructure and management decision to the overall economic value of the river basin. This paper presents a dynamic water accounting approach whereby the entire river basin is considered as a value chain with multiple services including production and storage. Water users and reservoir operators are considered as economic agents who can exchange water with their hydraulic neighbors at a price corresponding to the marginal value of water. Effective water accounting is made possible by keeping track of all water fluxes and their corresponding hypothetical transactions using the results of a hydro-economic model. The proposed approach is illustrated with the Eastern Nile River basin in Africa.

show abstract

“…Our model contributes to this rich literature by considering how allocation and management institutions interact with the physical characteristics of a storage system in influencing the value generated from water stored in public infrastructure. Because changes in reservoir capacity affect value and storage decisions [ Tilmant et al ., ], we also investigate how reservoir sizing interacts with allocation institutions and management objectives. The model developed herein also incorporates the novel feature of separable stochastic weather shocks at the source (where inflows accrue) and at the point of use (where water is demanded).…”

Section: Introductionmentioning

confidence: 99%

Water storage in a changing environment: The impact of allocation institutions on value

Maas

Dozier

Manning

et al. 2017

Water Resources Research

View full text Add to dashboard Cite

As populations increase in arid regions of the world, investment in water infrastructure improves resource management by increasing control over the location and timing of water allocation. Many studies have explored freer trade as a substitute for additional infrastructure investment. We instead quantify how water allocation institutions, reservoir management objectives, and storage capacity influence the value derived from a reservoir system. We develop a stochastic dynamic programming model of a reservoir system that faces within‐year variation in weather‐dependent water demand as well as stochastic semiannual inflows. We parameterize the model using the Colorado‐Big Thompson system, which transports stored water from the West Slope of the Rocky Mountains to the East Slope. We then evaluate the performance of the system under five institutional settings. Our results suggest that rigid allocation mechanisms and inefficient management objectives result in a decrease of up to 13% in the value generated from stored water when compared to a free trade scenario, an impact on par with predicted losses associated with climate‐change‐induced inflow reductions. We also find that under biased management objectives, increasing storage capacity can decrease the social value obtained from stored water.

show abstract

Economic Value of Storage in Multireservoir Systems

Cited by 31 publications

References 16 publications

The economic value of coordination in large‐scale multireservoir systems: The Parana River case

The economic value of coordination in large‐scale multireservoir systems: The Parana River case

A dynamic water accounting framework based on marginal resource opportunity cost

Water storage in a changing environment: The impact of allocation institutions on value

Contact Info

Product

Resources

About