Multipurpose Reservoir Operation: a Multi-Scale Tradeoff Analysis between Hydropower Generation and Irrigated Agriculture

Reservoir operations often require balancing among several water uses. Despite the non-consumptive nature of hydropower, conflicts exist between irrigation and hydropower due to a demand seasonality mismatch. Hydropower operations are scheduled as part of a large-scale power grid, whereas irrigation decisions takes place at a smaller scale, most often the river basin. Balancing these water uses should involve a co-optimization at the power grid level, integrating all basins contributing hydropower to the grid. However, grid-wide co-optimization is not always possible due, for instance, to separate regulatory settings between water uses. For those cases, we propose a basin-wide co-optimization approach that integrates two decision scales—power grid and river basin— into a hydro-economic model. Water for irrigation is usually allocated by water rights or binding contracts, represented as constraints on grid-wide power operation models. We propose a water allocation scheme that integrates monthly marginal benefits of water for irrigation and hydropower at the basin level. Monthly water demand functions for irrigation are developed using an agricultural economic model, and marginal benefits of hydropower production are derived from a cost-minimization, grid-wide power scheduling model. Results for 50 inflow scenarios show that the proposed basin-wide co-optimization provides an economically sound operation. Total benefits from water use in the basin are on average 2.5% higher than those obtained under mandatory irrigation. Moreover, expected benefits under co-optimization are 5.4% and 1.8% higher for irrigated agriculture and hydropower, respectively, alleviating the conflicts between water uses in the basin.