Nexus vs. Silo Investment Planning Under Uncertainty

Abstract

Water, energy, and agricultural infrastructure investments have important inter-relations fulfilling potentially competing objectives. When shaping investment plans, decision makers need to evaluate those interactions and the associated uncertainties. We compare planning infrastructure under uncertainty with an integrated water-energy-food nexus framework and with sector-centered (silo) frameworks. We use WHAT-IF, an open-source hydroeconomic decision support tool with a holistic representation of the power and agriculture sectors. The tool is applied to an illustrative synthetic case and to a complex planning problem in the Zambezi River Basin involving reservoirs, hydropower, irrigation, transmission lines and power plant investments. In the synthetic case, the nexus framework selects investments that generate more synergies across sectors. In sector-centered frameworks, the value of investments that impact multiple sectors (like hydropower, bioenergy, and desalinization) are under- or overestimated. Furthermore, the nexus framework identifies risks related to uncertainties that are not linked to the investments respective sectors. In the Zambezi river case, we find that most investments are mainly sensitive to parameters related to their respective sectors, and that financial parameters like discount rate, capital costs or carbon taxes are driving the feasibility of investments. However, trade-offs between water for irrigation and water for hydropower are important; ignoring trade-offs in silo frameworks increases the irrigation expansion that is perceived as beneficial by 22% compared to a nexus framework that considers irrigation and hydropower jointly. Planning in a nexus framework is expected to be particularly important when projects and uncertainties can considerably affect the current equilibrium.

Sustainable irrigation technologies: a water-energy-food (WEF) nexus perspective towards achieving more crop per drop per joule per hectare

“…As irrigation systems use energy to apply and distribute water to plants that produce the crop yield, considering water, energy, and food jointly in assessing the performance of irrigation systems leads to a better picture and characterization of the productive use of irrigation systems than considering the silos individually. Similar misrepresentations of WEF systems by silo-based frameworks were discovered in the Zambezi River Basin by Payet-Burin et al ( 2021 ), where silo-based frameworks under- or overestimated values on investments for irrigated agriculture expansion, hydropower capacity and thermal capacity by +22%, +7%, and −5% than the nexus framework, respectively.…”

Emerging Themes and Future Directions of Multi-Sector Nexus Research and Implementation

“…While several studies continue to show the benefits of integrated planning (Mirzabaev et al, 2015;Pittock et al, 2015;Rasul and Sharma, 2016;Dhaubanjar et al, 2017;Kurian, 2017;Stoy et al, 2018;Munoz Castillo et al, 2019;Payet-Burin et al, 2021;Wu et al, 2021), explicit implementation of nexus considerations at a decision-making level-and particularly across multiple scales-has been limited (Cremades et al, 2019;Johnson et al, 2019;Simpson and Jewitt, 2019;van Gevelt, 2020). The few examples of operational nexus implementation seem to be a response to shared resource conflicts rather than a result of long-term nexus foresight (Abbott et al, 2017;de Amorim et al, 2018;Kalair et al, 2019;Olawuyi, 2020;Weinthal and Sowers, 2020).…”

“…International literature clearly shows the benefits of integrated management of resources across sectors to capitalize on synergies and avoid conflicts (Lazaro et al, 2021;van den Heuvel et al, 2020;Imasiku and Ntagwirumugara, 2020;Elagib and Al-Saidi, 2020;Bakhshianlamouki et al, 2020;Sušnik, 2018;Karabulut et al, 2018;de Strasser et al, 2016;Payet-Burin et al, 2021). This concept of the interconnected nature of the water, energy, food, and other related systems is categorized in the literature as "nexus" research.…”

“…Decisions to meet one goal in one sector can have serious implications for the attainment of other goals in other sectors. Examples include how choices between different power generation mixes to lower emissions can affect water withdrawals and consumption (Parkinson et al, 2016;Liu et al, 2017a;Larsen et al, 2019;Liu et al, 2019); how expansion of biofuels and BECCS (Bio-Energy with Carbon Capture and Storage) competes with food production and other land uses (Rulli et al, 2016;Stoy et al, 2018); how the choice between rainfed or irrigated crops impacts both water and energy needs (FAO, 2014;El-Gafy, 2017;Khan et al, 2021); and how the choice between pumping groundwater, using streamflow, or transferring water from other regions affects both energy needs and agricultural productivity (Bakhshianlamouki et al, 2020;Payet-Burin et al, 2021;Wu et al, 2021). While the theoretical benefits of the nexus have been demonstrated in several modeling exercises and example case-studies, there remain several challenges and hurdles in implementation of these ideas in real policy and governance mechanisms which require securing strategic and financial support from leadership to modify long-established single-sector institutional and administrative structures.…”

The Implications of Global Change for the Co‐Evolution of Argentina's Integrated Energy‐Water‐Land Systems

“…To better contextualize these findings, it is important to note that in evaluating the relative importance of the human and earth systems through mid-century, we focused on long-term, relatively smooth trends and changes. This approach can miss important dynamics, because climate change is expected to worsen extreme events (e.g., droughts, heatwaves, and wildfires) that have the potential to dramatically transform the coupled human-earth system and the interactions among its components (Pachauri et al, 2014). Integrated toolkits that explore coupled human-earth system interactions, such as GCAM, are increasingly being used in climate impacts, adaptation, and vulnerability settings to provide higher spatiotemporal resolution insight into the multi-sector dynamic implications of climate-induced extreme events and variability (Fisher-Vanden & Weyant, 2020).…”