SUSTAINABLE, JUST & PRODUCTIVE

WATER RESOURCES DEVELOPMENT IN WESTERN NEPAL

UNDER CURRENT & FUTURE CONDITIONS

(DIGO JAL BIKAS – DJB)

Hydro-economic modeling for more efficient water resources management

March Jeuland—Duke University

(marc.jeuland@duke.edu)

1st August 2017

Overview

1.Brief overview of hydro-economic modeling

• What is it and why is it useful?

• Traditional approach

• Brief overview of more recent conceptual advances

2.Examples

3.Basic overview of model structure for Western Nepal

2

What is hydro-economic modeling?

“Hydroeconomic models represent regional scale

hydrologic, engineering, environmental and

economic aspects of water resources systems within

a coherent framework” (Harou et al., 2009)

• Solution-oriented tools for discovering strategies to

advance efficiency in water use

• Shift away from quantity-based, or physical, “targets”

• Reliance on a single metric to guide decisions –

economic value (rather than multiple objectives)

3

Why is hydro-economic modeling useful?

Can answer questions about the value of new

development (which hydropower, irrigation projects

generate highest value, relative to costs?)

Can be used to improve basin coordination (should dam

storage be increased during some periods to better allow

dry season irrigation?)

Can help identify tradeoffs between uses (do we lose

irrigation potential if we increase hydropower production?)

Can help expand solution set (can changes in water

management solve shortages?)

Can help quantify economic losses or gains due to

changes in other factors (how does climate or land use

change affect economic outcomes?)

4

Common applications of these models

From a recent review (Bekchanov et al. 2017), much work

on:

• Economic sensitivities (to climate change, value of energy, etc.)

• Tradeoffs between uses, especially irrigation vs. hydropower

• Water efficiency investments (drip irrigation, lining of canals, etc.)

• Water pricing (which makes water use more efficient)

• Water trade (where users can trade water rights to those willing to

pay)

Relatively less on:

• Ecosystem values

• Complex feedbacks (water-energy-food nexus)

5

EnvironmentalSystem

Our ambition: Better capturing this complexity

6

ON- Preparing land- Growing crops- Raising livestock- Harvesting produce- Drying, processing- Storing food products- Transport, distribution- Preparing food

Food/Land Use System

Energy System

- Extracting resources- Harnessing hydro, wind,

solar, biomass energy- Generating and

transmitting electricity- Production, refinement

and distribution of transport fuels

- Storing, buffering

Water System

- Manage renewable surface-and groundwater resources

- Distribute water supply for human consumption

- Collect sewage- Treat wastewater to protect

human and ecological health- Transfer between basins- Desalination

Hydropower, power plant

cooling, extraction, (bio)fuels

Water pumping, delivery, water

treatment, energy for desalination

Traditional hydro-economic approach

Optimization model that helps planner choose “best”

infrastructure (e.g. where, how big)

• Economics enter the objective function, which is in $

• Typical objectives include maximizing the value of market outputs

and/or minimizing penalty functions for undesirable impacts (like

floods)

Reliance on historical flows (stationarity)

Exploration of future changes by:

• Specifying changes as decision variables controlled by planner; or

• Creating scenarios of development for factors outside planner’s

control (e.g., assumed changes in hydrology, or population)

Typical misconception: Hydro-economic modeling is

usually for planning purposes, not for operations

7

Problems with the traditional apprach

Planners do not have perfect foresight

• Models that solve for “optimal” allocation are perhaps unconvincing

• Operations may be quite different

Water planners are risk averse

• They may not care much about average results, but want to reduce risk

• They tend to think in terms of ‘satisficing’, not maximizing $

Water planning challenges optimization

• Many-dimensional uncertainty, ‘deep’ uncertainty

• Near optimality (flatness of objective), or non-dominance of solutions

• Political economy of water

• Valuation difficulties

But various methodological advances allow improvements over

the traditional approach (stochastic, robust optimization, fuzzy

mathematical programming)

8

Basic design choices in hydro-economic models

9

Options Description Comments

Model type: Optimization

Simulation

-What strategy is best?-How does strategy perform if…?

-Flexible solution space, but may be unconvincing or challenge solvers-Computational advantages, realistic rule representation, but may underperform

Flows: Historic

Stochastic

-Measured series

-Sampling from stochastic series’

-Intuitive comparisons for managers / decision makers, but future may not be like the past-More thorough incorporation of variability, but less intuitive, may still misrepresent future

Uncertainty: ScenariosRisk-based

Other

-Best-worst / ranges-Well-specifiedprob. distributions-No or partial prob. distributions

-Deterministic and simple, but limited-Amenable to standard methods in decision analysis, assume away “deep” uncertainty-Perhaps most relevant, but challenge for decision-making

Integration: Modular

Holistic

-Linked models run separately-Single integrated platform

-Well adapted to limited expertise, but can be clunky to use-Allow modeling of feedbacks; but may be difficult to run

Choosing a particular architecture

Need to know objective: Inform policy, promote uptake, or

work at the cutting edge of methods?

Tension between promoting uptake and maintaining

objectivity:

• Users often impose assumptions to improve realism

• These assumptions may reduce transparency

10

11

II. Brief overview and discussion of

examples from the Nile (Why the

Nile?)

Hydro-economic examples from the Nile

12

Author(s) Year Model type Flows Uncertainty Integration

Wu et al. (NEOM)2005; 2006; 2016; 2017

Optimization DeterministicFlow, dams, energy value

Holistic (Full basin)

Strzepek et al. 2007Optimization (CGE)

Deterministic Capital shocks Holistic (Egypt)

Block (IMPEND) 2010 Optimization DeterministicClimate scenarios

Holistic (Eastern Nile)

Jeuland (3 linked models)

2010a, b; 2014 Simulation StochasticFlow; development

Modular (Full basin)

Halleux; Goor; Arjoon et al. (Nile SDDP)

2009; 2010; 2014

Optimization Stochastic Infrastructure Holistic (East. Nile)

Dinar 2013; 2015 Optimization Deterministic Initial rights Holistic (East. Nile)

Geressu et al. 2015 Optimization DeterministicWeights for decision vars.

Holistic (East. Nile)

Satti et al. (SHOM)

2015 Optimization DeterministicFlow; prices; development

Holistic (Nile in Sudan)

Irrigation; Hydropower

Irrigation; Hydropower; Flood control

Irrigation; Hydropower; Siltation

Economy-wide

13

III. Interdependence and tradeoffs:

Example from the Ganges

Standard narrative in water resources development

To achieve optimal outcomes, one needs to consider the

complete water resource system

Several reasons: dependencies across…

• Space; e.g. spillovers/externalities not considered by agents

located upstream

• Time; e.g. depleting water storage (in soils, surface or

groundwater) could lead to permanent changes in land cover

and hydrology

• Outcomes; e.g. markets for goods and services, nonmarket

values, environmental quality

The need to consider the system resonates with ecologists

/ engineers / economists

14

Where do we see these ideas reflected?

Two examples (among others):

• Wide inclusion in national policy of Integrated Water

Resource Management (IWRM) : “A process which

promotes the coordinated development and management of

water, land & related resources in order to maximize the

resultant economic and social welfare in an equitable

manner without compromising the sustainability of vital

ecosystems”

• Hydro-economic optimization models: How should one

choose where to build infrastructure, how to allocate water,

etc., to maximize economic benefit?

15

Ganges Basin: One of very first international case studies for hydro-economic

optimization

16

Source: Rogers (1969). “A game theory approach to the problems of

international river basins.” Water Resources Research 5(4): 749-760.

Objective: Maximize economic benefits (Hydropower + irrigation – flood damages)

More recent Ganges model

17

RAJASTHAN

MADHYA PRADESH

CHHATTISGARH

JHARKHAND

WEST BENGAL

BIHAR

UTTAR PRADESH

BANGLADESH

NEPAL

UTTARKHAND

HIM

AC

HA

L

PR

AD

ES

H

IRR101_8

Kota Dam

DAM101_5

Gandhisagar Dam

DAM101_3

Ranapratapsagar

DAM101_4

Chambal right bank

IRR101_6

Chambal River

Chambal left bank

IRR101_5

Dhaolpur municipal area

WS101_3

Rangwan Dam

DAM101_11

Daudhan Dam

DAM101_10

Ken River

Tons River

Karmanasa River

Naugarh Dam

DAM104_1

Musakhand Dam

DAM104_2

Adhuara Municipal area

WS104_1

IRR102_2

Ganges River

Son Right Bank

IRR106_2

Son left

IRR106_1

Nort

h K

ael

Riv

er

Mayurakshi RiverMassanjore Dam

DAM111_1Maithan

DAM111_2

Panchet Resevoir

DAM111_3

Damodar River

Kangshabati

DAM111_4

Haldia River

Farakka

Ganges River

Ganges Barrage

(planned)

Padma River

Ban

ghir

athi

/

Hoogly

Low

er M

eghna

Riv

er

Upper

Meg

hna

Riv

er

Jam

una

Riv

er

Mohan

anda

Riv

er

(Ban

gla

des

h)

Mohan

anda

Riv

er

(India

)

Mec

hi

Riv

er

Ghag

ara

Riv

er

Ban

gan

ga

Riv

er

Rap

ti R

iver

Gan

dhak

Riv

er

Bag

mat

i R

iver

Kosi

Riv

er

Kam

ala

Riv

er

Tam

ur

DA

M2

09

_6

Kal

igan

dhak

i ii

DA

M2

07

_2

Kal

igan

ghak

i I

DA

M2

07

_1

Set

i

DA

M2

07

_4

Mar

syan

di

DA

M2

07

_5

Bu

rhi

Gan

gak

i

DA

M2

07

_6

Tri

suli

Res

ervoir

DA

M2

07

_7

Su

nk

osi

II

DA

M2

09

_2

S

apta

kosi

Riv

er Upper

Aru

n

DA

M2

09

_3

Aru

n I

II

DA

M2

09

_

4L

ow

er A

run

DA

M2

09

_5

Kosi High Dam

DAM209_7

Kosi western canal

IRR109_3Kosi Eastern canal

IRR109_4

Kamala Dam

DAM209_1

Sapta Ganghaki Dam

DAM207_8

Kulekhani

DAM208_1

Eastern Gandhak

IRR107_3

Western Gandhak

IRR107_2

Rapti B

IRR105_6

Andhi Khola Dam

DAM207_3

Rapti Dam

DAM205_9

Surya B

IRR105_4

Chisapani (kamali) Dam

DAM205_8

Girija B

Lucknow City Supply

WS103_1

Sarda Sahayak

IRR105_2

Gomti river

Banbhasa Headworks

DAM205_3

Purnagiri dam

DAM205_2

Pancheswar dam

DAM205_1

Mah

akal

i

(Sar

ada)

Riv

er

Kar

nal

i (G

hag

ra)

river

Bab

ai (

Su

rya)

river

Kotti Behl Reservoir

DAM100_6East Ganga Canal

IRR100_2

Madhya East Ganga

IRR100_4

Kanpur city Supply

WS100_1

Lower Ganga Canal

IRR100_5

Upper Ganga Canal

IRR100_1

Madhya West Ganga

IRR100_3

Vyasi Dam

DAM101_2

Yamuna East Canal

IRR101_2

Yamuna River

Lakhwar Dam

DAM101_1

Yamuna West Canal

IRR101_1

Hinden R.Agra Canal

IRR101_3

Agra City Supply

WS101_2

INF101_1

INF101_2

INF101_3

INF101_4

INF101_5

INF101_6

INF101_7

INF101_8

INF101_9

INF101_10

INF101_11

INF101_12

INF101_13

INF101_14

INF101_15

INF101_16

INF101_17

INF101_18

INF100_1

INF100_2

INF100_3

INF100_4

INF100_5

INF100_6

INF100_8

INF100_9

INF100_10 INF100_11INF100_12

INF100_13

INF100_14

INF100_15 INF100_16

INF100_17

INF102_1

INF102_2

INF103_1

INF104_1

INF205_1

INF205_2

INF205_3

INF205_4

INF205_5

INF205_6

INF205_7

INF205_8

INF105_9

INF105_10

INF105_11

INF106_1INF106_2

INF106_3

INF106_4

INF207_1

INF207_2

INF207_3

INF207_4

INF207_5

INF207_6INF208_1

INF208_2

INF209_1

INF209_2

INF209_3

INF209_4

INF209_5

INF209_6

INF210_1

INF110_2

INF111_1

INF111_2

INF111_4

INF312_1

INF313_1

INF314_1

IT01_1

IT01_2

IT01_3

IT01_4

IT01_6

IT01_5

IT01_7

IT01_9

IT01_10

IT01_11

IT01_12

IT00_1

IT00_2

IT00_3

IT00_4

IT00_5

IT00_6

IT00_7

IT00_8

IT00_9 IT00_10 IT00_11 IT00_12 IT00_13IT00_14 IT00_15

IT02_1

IT02_2

IT03_1IT05_3

IT04_1

IT05_1

IT05_8

IT07_1

IT09_1

IT09_3

IT06_1

IT06_2

IT10_1

IT11_1

IT11_3

IT11_4

IT11_2

IT05_2

Rapti Nepal

IRR205_5

IRR209_2

Delhi Water Supply

WS101_1

Parwan Irrigation

IRR101_4

Pardkh

IRR101_9

IT01_8

INF100_7

IRR205_1IRR205_3

IT05_4 IT05_5

IT05_6

IT05_7

IRR207_1

IT08_1

IT09_2

IRR209_1

IT06_3

IRR106_3

INF111_3

END1

END2

IT00_16

IT00_17IT00_18

END3

IT05_9

IT07_2

Keolari

IRR101_7

IT01_13

IT01_14

IRR101_10

IRR101_11IT01_15

IRR101_12IT01_16

FL1

FL2

FL3FL4

FL5

FL6

FL7

FL8

IT00_19

IRR300_6

GWR00_1

GWR00_2

GWR00_3

GWR101_1

GWR101_2

GWR101_8

GWR101_7

GWR101_6

GWR101_14

GWR101_13

GWR101_10

GWR101_16

GWR102_2

GWR105_2

GWR105_7

GWR106_2GWR106_2

GWR106_1

Insights from these models

The largest dams in the Himalaya do not provide

much storage compared to annual flow of Ganges

Tributary flows can be reduced somewhat with

storage, but ability to control floods is limited

Dams would provide low flow augmentation, but

these induce tradeoffs between:

Irrigation (mostly in India) and

Ecosystem and water quality benefits (mostly in

Bangladesh)

Few other tradeoffs, at least at large scale

What about at smaller scale (in Western Nepal?)

18

More recent Ganges model

19

RAJASTHAN

MADHYA PRADESH

CHHATTISGARH

JHARKHAND

WEST BENGAL

BIHAR

UTTAR PRADESH

BANGLADESH

NEPAL

UTTARKHAND

HIM

AC

HA

L

PR

AD

ES

H

IRR101_8

Kota Dam

DAM101_5

Gandhisagar Dam

DAM101_3

Ranapratapsagar

DAM101_4

Chambal right bank

IRR101_6

Chambal River

Chambal left bank

IRR101_5

Dhaolpur municipal area

WS101_3

Rangwan Dam

DAM101_11

Daudhan Dam

DAM101_10

Ken River

Tons River

Karmanasa River

Naugarh Dam

DAM104_1

Musakhand Dam

DAM104_2

Adhuara Municipal area

WS104_1

IRR102_2

Ganges River

Son Right Bank

IRR106_2

Son left

IRR106_1

Nort

h K

ael

Riv

er

Mayurakshi RiverMassanjore Dam

DAM111_1Maithan

DAM111_2

Panchet Resevoir

DAM111_3

Damodar River

Kangshabati

DAM111_4

Haldia River

Farakka

Ganges River

Ganges Barrage

(planned)

Padma River

Ban

ghir

athi

/

Hoogly

Low

er M

eghna

Riv

er

Upper

Meg

hna

Riv

er

Jam

una

Riv

er

Mohan

anda

Riv

er

(Ban

gla

des

h)

Mohan

anda

Riv

er

(India

)

Mec

hi

Riv

er

Ghag

ara

Riv

er

Ban

gan

ga

Riv

er

Rap

ti R

iver

Gan

dhak

Riv

er

Bag

mat

i R

iver

Kosi

Riv

er

Kam

ala

Riv

er

Tam

ur

DA

M2

09

_6

Kal

igan

dhak

i ii

DA

M2

07

_2

Kal

igan

ghak

i I

DA

M2

07

_1

Set

i

DA

M2

07

_4

Mar

syan

di

DA

M2

07

_5

Bu

rhi

Gan

gak

i

DA

M2

07

_6

Tri

suli

Res

ervoir

DA

M2

07

_7

Su

nk

osi

II

DA

M2

09

_2

S

apta

kosi

Riv

er Upper

Aru

n

DA

M2

09

_3

Aru

n I

II

DA

M2

09

_

4L

ow

er A

run

DA

M2

09

_5

Kosi High Dam

DAM209_7

Kosi western canal

IRR109_3Kosi Eastern canal

IRR109_4

Kamala Dam

DAM209_1

Sapta Ganghaki Dam

DAM207_8

Kulekhani

DAM208_1

Eastern Gandhak

IRR107_3

Western Gandhak

IRR107_2

Rapti B

IRR105_6

Andhi Khola Dam

DAM207_3

Rapti Dam

DAM205_9

Surya B

IRR105_4

Chisapani (kamali) Dam

DAM205_8

Girija B

Lucknow City Supply

WS103_1

Sarda Sahayak

IRR105_2

Gomti river

Banbhasa Headworks

DAM205_3

Purnagiri dam

DAM205_2

Pancheswar dam

DAM205_1

Mah

akal

i

(Sar

ada)

Riv

er

Kar

nal

i (G

hag

ra)

river

Bab

ai (

Su

rya)

river

Kotti Behl Reservoir

DAM100_6East Ganga Canal

IRR100_2

Madhya East Ganga

IRR100_4

Kanpur city Supply

WS100_1

Lower Ganga Canal

IRR100_5

Upper Ganga Canal

IRR100_1

Madhya West Ganga

IRR100_3

Vyasi Dam

DAM101_2

Yamuna East Canal

IRR101_2

Yamuna River

Lakhwar Dam

DAM101_1

Yamuna West Canal

IRR101_1

Hinden R.Agra Canal

IRR101_3

Agra City Supply

WS101_2

INF101_1

INF101_2

INF101_3

INF101_4

INF101_5

INF101_6

INF101_7

INF101_8

INF101_9

INF101_10

INF101_11

INF101_12

INF101_13

INF101_14

INF101_15

INF101_16

INF101_17

INF101_18

INF100_1

INF100_2

INF100_3

INF100_4

INF100_5

INF100_6

INF100_8

INF100_9

INF100_10 INF100_11INF100_12

INF100_13

INF100_14

INF100_15 INF100_16

INF100_17

INF102_1

INF102_2

INF103_1

INF104_1

INF205_1

INF205_2

INF205_3

INF205_4

INF205_5

INF205_6

INF205_7

INF205_8

INF105_9

INF105_10

INF105_11

INF106_1INF106_2

INF106_3

INF106_4

INF207_1

INF207_2

INF207_3

INF207_4

INF207_5

INF207_6INF208_1

INF208_2

INF209_1

INF209_2

INF209_3

INF209_4

INF209_5

INF209_6

INF210_1

INF110_2

INF111_1

INF111_2

INF111_4

INF312_1

INF313_1

INF314_1

IT01_1

IT01_2

IT01_3

IT01_4

IT01_6

IT01_5

IT01_7

IT01_9

IT01_10

IT01_11

IT01_12

IT00_1

IT00_2

IT00_3

IT00_4

IT00_5

IT00_6

IT00_7

IT00_8

IT00_9 IT00_10 IT00_11 IT00_12 IT00_13IT00_14 IT00_15

IT02_1

IT02_2

IT03_1IT05_3

IT04_1

IT05_1

IT05_8

IT07_1

IT09_1

IT09_3

IT06_1

IT06_2

IT10_1

IT11_1

IT11_3

IT11_4

IT11_2

IT05_2

Rapti Nepal

IRR205_5

IRR209_2

Delhi Water Supply

WS101_1

Parwan Irrigation

IRR101_4

Pardkh

IRR101_9

IT01_8

INF100_7

IRR205_1IRR205_3

IT05_4 IT05_5

IT05_6

IT05_7

IRR207_1

IT08_1

IT09_2

IRR209_1

IT06_3

IRR106_3

INF111_3

END1

END2

IT00_16

IT00_17IT00_18

END3

IT05_9

IT07_2

Keolari

IRR101_7

IT01_13

IT01_14

IRR101_10

IRR101_11IT01_15

IRR101_12IT01_16

FL1

FL2

FL3FL4

FL5

FL6

FL7

FL8

IT00_19

IRR300_6

GWR00_1

GWR00_2

GWR00_3

GWR101_1

GWR101_2

GWR101_8

GWR101_7

GWR101_6

GWR101_14

GWR101_13

GWR101_10

GWR101_16

GWR102_2

GWR105_2

GWR105_7

GWR106_2GWR106_2

GWR106_1

20

IV. Western Nepal model: Basic

structure

Modular structure

21

Figure 8. Module interconnections for HEM model

From Vishnu’s

SWAT model

More details on connections

22

Figure 2. Interactions between production domains included in the WEEF framework

Nodes and links

23

Figure 9. River Node network scheme

Model schematic

24

Mathematical equations

Objective is to maximize economic value (from

hydropower, irrigation, what else?)

Nodal water balance (inflow, storage, diversion, outflow)

Production using water: Energy, food crops, industry, other

services (including environmental)

Consumption by end users (households)

Use of energy by water sector (nexus!)

Institutional & other constraints (minimum flows, specific

allocation rules)

25

Questions we hope to ask…

What is the value of new water infrastructure?

(storage/hydropower dams, expanded irrigation canals)

Are there tradeoffs between uses? (e.g., irrigation vs.

hydropower, ecosystem services vs. hydropower)

Are there tradeoffs across space and time? (groundwater

irrigation now vs. later; micro-irrigation in hills vs. irrigation

in Terai)

What is the effect of institutional constraints? (guaranteed

flow to Terai irrigation, or power supply to India)

26

27

Thank you!