1 optimizing flexibility and value in california’s water system jay r. lund richard e. howitt...
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Optimizing Flexibility and Value in California’s Water
SystemJay R. Lund
Richard E. Howitt
Marion W. Jenkins
Stacy K. TanakaCivil and Environmental Engineering
Agricultural and Resource Economics
University of California, Davis
http://cee.engr.ucdavis.edu/faculty/lund/CALVIN/
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Real work done byDr. Andrew J. Draper Dr. Kenneth W. Kirby
Matthew D. Davis Kristen B. Ward
Brad D. Newlin Stacy Tanaka
Brian J. Van Lienden Randy Ritzema
Siwa M. Msangi Guilherme Marques
Pia M. Grimes Dr. Arnaud Reynaud
Jennifer L. Cordua Mark Leu
Matthew Ellis Tingju Zhu
Inês Ferreira Sarah Null
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Funded by• CALFED Bay Delta Program
• State of California Resources Agency
• National Science Foundation
• US Environmental Protection Agency
• California Energy Commission
• US Bureau of Reclamation
• Lawrence Livermore National Laboratory
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Thanks for many things
We had a lot of help.
• Advisory Committee of ten, Chaired by Anthony Saracino
• Diverse staff of DWR, USBR, MWDSC, SKS Inc., USACE HEC, EBMUD, CCWD, USACE, SDCWA, SCWA, SWC, and others.
• Varied providers of ideas, data, and support.
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OverviewPart I – Assembling the Water Puzzle
• Motivation
• What is the CALVIN model?
• Approach and Data
Part II - CALVIN Results
4) Policy Alternatives
5) Results
6) Conclusions, Implications and Future
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Motivation for Project
• California’s water system is huge and complex
• Supplies, demands, return flows, and reuse
• Surface water and groundwater
• Controversial and economically important
• Major changes are being considered
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Motivation for Project
• Can we better understand this system?
• How could system management be improved?
• How much would changes benefit users?
• How much would users be willing to pay for:
– more water
– changes in facilities & policies?
These are not “back of the envelope” calculations.
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Themes1. Economic “scarcity” is a useful indicator of
good water management performance.
2. Integrated management of water resources, facilities, and demands can improve performance, esp. at regional scales.
3. The entire range of hydrologic events is important, not just “average” and “drought” years.
4. Optimization, databases, and newer methods, data, and software support more transparent and efficient management.
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What is Scarcity?
0
100
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0 2 4 6 8 10
Delivery
Total Value
0
Scarcity
D M
ScarcityCost
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What is CALVIN?
• Economic-engineering optimization model
– Economic Values for Agricultural & Urban Uses
– Flow Constraints for Environmental Uses
• Prescribes monthly system operation over the historical hydrology
• Entire inter-tied California water system
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What is Optimization?
Finding the “best” decisions within constraints.
• “Best” based on estimated performance.
• Decision options are limited by physical and policy constraints.
• Software searches available decisions for the “best” ones.
Optimization can identify promising solutions.
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Decisions: Water operations and allocations
Find “best” performance: Maximize net benefits over historic hydrology
(Minimize economic losses & costs)
Limited by: (1) Water balance (2) Flow and storage capacities (3) Minimum flows
CALVIN Optimization – In Words
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Approacha) Develop schematic of sources, facilities, &
demands.
b) Develop economic values for agricultural & urban water use for 2020 land use and population.
c) Identify minimum environmental flows.
d) Reconcile estimates of 1922-1993 historical inflows.
e) Develop documentation and databases for more transparent and flexible statewide analysis.
f) Combine this information in an optimization model.
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Approach (continued)g) Three policy alternatives:
1) Base Case
– current operation and allocation policies
2) Five Regional Optimizations/Water Markets
– current import and export levels
– economically driven decisions
3) Statewide Optimization/Water Market
h) Interpret results.
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Model Schematic - North
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Model Schematic - South
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CALVIN’s Demand Coverage
ReservoirsNot in CALVINUpper Sacramento ValleyLower Sacramento Valley & DeltaSan Joaquin and Bay AreaTulare BasinSouthern California
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Economic Values for Water
• Agricultural: Production model SWAP
• Urban: Based on price elasticities of demand
• Operating Costs
• Environmental: Use constraints instead of economic values
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4
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911
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1013
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1518
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Coachella Valley
SACRAMENTO VALLEY REGIONS
SOUTHERN CALIFORNIA REGIONS
SAN JOAQUIN VALLEY REGIONS
Imperial Valley
Palo Verde
SWAP Model Regions
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Agricultural Crop Descriptions
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Tomato Production-Yolo County
WaterLand
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0
20
40
60
80
100
120
140
160
1 1.5 2 2.5
AW/ETAW
$/A
cre
/Ye
ar
Efficiency-Cost Trade-offs: Orchards Sacramento Valley
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Agricultural Water Use Values
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
0 50 100 150 200 250 300 350 400
Deliveries (taf)
Be
nef
its
($
00
0)
March
AugustJune
July
May
April
September
October0
1,000
2,000
3,000
5 10 15
OctoberFebruary
January
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Urban Water Use Values
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
20 25 30 35 40 45 50 55 60
Deliveries (taf)
Pen
alty
($0
00)
Winter
SummerSpring
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Operating Costs
• Fixed head pumping– Energy costs– Maintenance costs
• Groundwater recharge basins
• Wastewater reuse treatment
• Fixed head hydropower
• Urban water quality costs
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Environmental Constraints
• Minimum instream flows
• Rivers (e.g., Trinity, Sacramento, American, Feather, San Joaquin, San Joaquin tributaries)
• Lakes (Mono Lake, Owens Lake)
• Delta outflows
• Wildlife refuge deliveries in Central Valley
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Hydrology Surface & Groundwater
1921 - 1993 historical inflows
• Monthly flows
• Represents the wide range of water availability over 72 years.
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Data Flow for the CALVIN Model
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Database and Interface• Tsunami of data for a controversial system
– Political need for transparent analysis
– Practical need for efficient data management
• Databases central for modeling & management
• Metadata and documentation
• Database & study management software
Systematic data management is needed for transparency and informed decision-making.
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CALVIN’s Innovations
1) Statewide model
2) Groundwater and Surface Water
3) Supply and Demand integration
4) Optimization model
5) Economic perspective and values
6) Data - model management
7) Supply & demand data checking
8) Integrated management options
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Part IICALVIN Results & Policy Conclusions
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Policy Alternatives1) Base Case
• Current operating and allocation policies
2) Regional Optimization Case (5 regions)• Current inter-regional flows• Flexible operations within each region• 5 Regional water markets
3) Statewide Optimization Case• Statewide water market
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Some Results
• Water Scarcity & Economic Performance
• Willingness to pay and Import Values
• Costs of Environmental Flows
• Economic Value of Facility Changes
• Conjunctive Use
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Total Costs by RegionAverage Total Cost ($M/yr)
BC RWM SWM Upper Sacramento Valley 35 34 29
Lower Sacramento & Delta
212 166 166
San Joaquin and Bay Area
394 358 333
Tulare Lake Basin 453 424 417 Southern California 3074 1855 1838
TOTAL 4169 2838 2783
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Scarcity by Region Average Scarcity (taf/yr) Average Scarcity Cost ($M/yr)
Region BC* RWM* SWM* BC RWM SWM Upper Sacramento Valley 144 157 0 7 5 0 Lower Sacramento & Delta 27 1 1 36 1 1 San Joaquin and Bay Area 16 0 0 15 0 0
Tulare Lake Basin 274 322 33 37 19 2 Southern California 1132 929 857 1501 255 197
TOTAL 1594 1409 890 1596 279 200 Agriculture Only
Upper Sacramento Valley 144 157 0 7 5 0 Lower Sacramento & Delta 8 0 0 0 0 0 San Joaquin and Bay Area 0 0 0 0 0 0
Tulare Lake Basin 232 322 30 19 18 1 Southern California 309 703 703 6 28 28 Total Agriculture 693 1182 733 32 51 29
Urban Only Upper Sacramento Valley 0 0 0 0 0 0 Lower Sacramento & Delta 19 1 1 36 1 1 San Joaquin and Bay Area 16 0 0 15 0 0
Tulare Lake Basin 42 0 2 18 0 1 Southern California 823 227 154 1495 227 169
Total Urban 901 227 157 1564 227 170
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Agricultural Scarcity Cost Changes by Region - SWM
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Urban Scarcity Cost Changes - SWM
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Willingness-to-Pay Average WTP ($/af) BC RWM SWM
CVPM 2 42 15 0 CVPM 8 0 0 0
CVPM 15 40 26 14 CVPM 17 0 18 11 CVPM 18 162 40 0 Imperial 24 68 68
Napa-Solano 694 0 0 East Bay MUD 351 28 28 San Francisco 291 0 0
Fresno 472 0 42 Castaic Lake 10,495 645 519
Coachella 1,520 1,358 1,358 E & W MWD 831 219 2
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Value of Additional Imports to Southern California
917
628486
1891
739
105 105
2849
0
500
1000
1500
2000
2500
3000
BC RWM SWM BC RWM SWM BC RWM SWM
Ma
rgin
al
Va
lue
($
/AF
)
Mono-Owens SWP Colorado R.
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Marginal Cost of Trinity River Flows
0
10
20
30
40
50
1921 1931 1941 1951 1961 1971 1981 1991
Ma
rgin
al C
os
t ($
/af)
Regional
Statewide
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Environmental Flow Costs Avg Opportunity Cost ($/af)
Environmental Requirement RWM SWM Trinity River 46 1
American River 0 0 Stanislaus River 4 1
Merced River 3 2 Mono Lake Inflows 963 818
Owens Lake Dust Mitigation 750 611 Sacramento West Refuge 42 ~0
Kern Refuge 43 34 Delta Outflow 0 0
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Economic Value of Facility ChangesAnnual Expansion Value ($/af)
RWM SWM Surface Reservoirs
Pardee 15 15 Kaweah 56 32 Success 48 26
S. Cal. SWP Storage 12 3 Conveyance
EBMUD/CCWD Cross Canal 146 145 East Bay/South Bay Connector 237 253
Hetch Hetchy Aqueduct 268 280 Colorado River Aqueduct 351 209
Other Facilities Coachella Artificial Recharge 2,654 2,796 SCV Groundwater Pumping 230 178
SFPUC Recycling 55 71 SCV Recycling Facility 30 46
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580
585
590
595
600
605
610
615
620
625
630
635
640
1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988
Tota
l Sto
rage
(M
AF
)
Base Case
Statewide Unconstrained
Statewide Groundwater Storage
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Conjunctive Use
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
60%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Annual Exceedence Probability
An
nu
al S
up
ply
- %
Gro
un
dw
ater
BASE CASE
REGIONAL WATER MARKET
STATEWIDE WATER MARKET
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Policy Conclusions
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Markets, Transfers, & Exchanges
a) Regional & statewide markets can reduce water scarcity and scarcity costs. Most benefits occur with regional markets.
b) Flexibility of markets allow environmental flows to be more easily accommodated.
c) Markets never reduced deliveries to any major user more than 15%.
d) Exchanges and transfers improve operational efficiency and increase overall deliveries.
e) If ~20% of water is allocated by markets, most scarcity disappears statewide.
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Infrastructure Capacity
a) Additional infrastructure is very valuable economically at some locations and times.
b) Select inter-ties, recharge, and other conveyance expansions show the greatest benefits – by far.
c) Surface storage expansion has much less value, assuming conjunctive use is available.
d) Water reuse can have significant water supply value.
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Conjunctive Usea) Statewide: surface storage ~40 MAF
groundwater storage 140+ MAF CALVIN uses ~73 MAF Base Case uses ~58 MAF
b) Regional and statewide optimization employs more conjunctive use.
c) Conjunctive use of ground and surface waters has large economic and operational benefits for every region.
d) Most benefits are within regions, but substantial statewide benefits also exist.
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Water Demands
a) Water use efficiency measures are useful, but do not have unlimited potential.
b) Most water demands can be satisfied. Most unsatisfied demands could be well compensated with markets.
c) Satisfying all demands is not always economically worthwhile. Some scarcity is optimal.
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Environmental Flows
a) Consumptive environmental flows impose greater costs to agricultural and urban water users than instream flows.
b) With flexible operations and markets, most environmental flows impose little cost on other water users.
c) A statewide water market greatly reduces environmental costs to other water users.
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Regional vs. Statewide Management
a) The vast majority of potential economic improvement in California’s water system is from local and regional changes.
b) Local and regional improvements greatly reduce demands for additional imported water, often by 70-90%.
c) Statewide management has some additional benefits, especially for mitigating economic impacts of environmental requirements.
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Uses for CALVIN
1) Integrated long-term regional and statewide planning
2) Integrated supply & demand data management
3) Preliminary economic evaluation
4) Planning & operations studies:
Facility expansion, Joint operations, Conjunctive use, Catastrophe response, Climate change, Water transfers, ...
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Future of CALVIN
1) Continuing University development (climate change, flood control, hydropower, …).
2) Discussions with DWR, USBR, and LLNL regarding adoption, improvement, and use of the model and related ideas.
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Concluding Thought
Purposes of Computer Models:
- Make better sense of complex systems
- Suggest promising infrastructure & operations
- Develop ideas for better management
http://cee.engr.ucdavis.edu/faculty/lund/CALVIN/