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| Titel |
Definition of scarcity-based water pricing policies through hydro-economic stochastic programming |
| VerfasserIn |
Hector Macian-Sorribes, Manuel Pulido-Velazquez, Amaury Tilmant |
| Konferenz |
EGU General Assembly 2014
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| Medientyp |
Artikel
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| Sprache |
Englisch
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| Digitales Dokument |
PDF |
| Erschienen |
In: GRA - Volume 16 (2014) |
| Datensatznummer |
250086873
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| Publikation (Nr.) |
 EGU/EGU2014-814.pdf |
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| Zusammenfassung |
| One of the greatest current issues in integrated water resources management is to find and
apply efficient and flexible management policies. Efficient management is needed to deal
with increased water scarcity and river basin closure. Flexible policies are required to handle
the stochastic nature of the water cycle. Scarcity-based pricing policies are one of the most
promising alternatives, which deal not only with the supply costs, but also consider the
opportunity costs associated with the allocation of water. The opportunity cost of water,
which varies dynamically with space and time according to the imbalances between supply
and demand, can be assessed using hydro-economic models. This contribution presents
a procedure to design a pricing policy based on hydro-economic modelling and
on the assessment of the Marginal Resource Opportunity Cost (MROC). Firstly,
MROC time series associated to the optimal operation of the system are derived from
a stochastic hydro-economic model. Secondly, these MROC time series must be
post-processed in order to combine the different space-and-time MROC values into a
single generalized indicator of the marginal opportunity cost of water. Finally, step
scarcity-based pricing policies are determined after establishing a relationship between the
MROC and the corresponding state of the system at the beginning of the time period
(month).
The case study of the Mijares river basin (Spain) is used to illustrate the method. It
consists in two reservoirs in series and four agricultural demand sites currently managed
using historical (XIVth century) rights. A hydro-economic model of the system has been built
using stochastic dynamic programming. A reoptimization procedure is then implemented
using SDP-derived benefit-to-go functions and historical flows to produce the time series of
MROC values. MROC values are then aggregated and a statistical analysis is carried out to
define (i) pricing policies and (ii) the relationship between MROC and status of the system.
Finally, the effectiveness and flexibility of those pricing policies are analyzed using a
hydro-economic simulation model. The results show that the use of scarcity-based pricing
policies improves the current management practices, yielding almost as much economic
benefits as SDP-derived policies. The fluctuations in the system state are quickly reflected in
the supplies, giving the pricing policies enough flexibility to adapt to the stochastic nature
of water resources. This work demonstrates that the adequate design and use of
pricing policies can improve the efficiency and flexibility of water resources systems
management.
This study has been partially funded by the European Union’s Seventh Framework
Program (FP7) ENHANCE (number 308.438) |
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