Optimizing Flexibility and Value in California’s Water System
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Optimizing Flexibility and Value in California’s Water System. Jay R. Lund Richard E. Howitt Marion W. Jenkins Stacy K. Tanaka Civil and Environmental Engineering Agricultural and Resource Economics University of California, Davis. http://cee.engr.ucdavis.edu/faculty/lund/CALVIN/.

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Optimizing Flexibility and Value in California’s Water System

Jay R. Lund

Richard E. Howitt

Marion W. Jenkins

Stacy K. Tanaka

Civil and Environmental Engineering

Agricultural and Resource Economics

University of California, Davis

http://cee.engr.ucdavis.edu/faculty/lund/CALVIN/


Real work done by

Dr. Andrew J. Draper Dr. Kenneth W. Kirby System

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

Real work done by


Funded by

CALFED Bay Delta Program System

State of California Resources Agency

National Science Foundation

US Environmental Protection Agency

California Energy Commission

US Bureau of Reclamation

Lawrence Livermore National Laboratory

Funded by


Thanks for many things

We had a lot of help. System

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.

Thanks for many things


Overview

Part I – Assembling the Water Puzzle System

Motivation

What is the CALVIN model?

Approach and Data

Part II - CALVIN Results

Policy Alternatives

Results

Conclusions, Implications and Future

Overview


Motivation for project
Motivation for Project System

  • 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


Motivation for project1
Motivation for Project System

  • 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.


Themes
Themes System

  • Economic “scarcity” is a useful indicator of good water management performance.

  • Integrated management of water resources, facilities, and demands can improve performance, esp. at regional scales.

  • The entire range of hydrologic events is important, not just “average” and “drought” years.

  • Optimization, databases, and newer methods, data, and software support more transparent and efficient management.



What is calvin
What is CALVIN? System

  • 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


What is optimization
What is Optimization? System

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.


Calvin optimization in words
CALVIN Optimization – In Words System

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


Approach
Approach System

a) 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.


Approach continued
Approach (continued) System

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.




Calvin s demand coverage
CALVIN’s Demand Coverage System

Reservoirs

Not in CALVIN

Upper Sacramento Valley

Lower Sacramento Valley & Delta

San Joaquin and Bay Area

Tulare Basin

Southern California


Economic values for water
Economic Values for Water System

  • Agricultural: Production model SWAP

  • Urban: Based on price elasticities of demand

  • Operating Costs

  • Environmental: Use constraints instead of economic values






Agricultural water use values

July System

70,000

June

August

60,000

50,000

March

Benefits ($ 000)

40,000

May

3,000

30,000

October

April

2,000

February

20,000

January

1,000

10,000

September

0

5

10

15

October

0

0

50

100

150

200

250

300

350

400

Deliveries (taf)

Agricultural Water Use Values


Urban water use values

50,000 System

Winter

45,000

40,000

35,000

Spring

30,000

Summer

Penalty ($000)

25,000

20,000

15,000

10,000

5,000

0

20

25

30

35

40

45

50

55

60

Deliveries (taf)

Urban Water Use Values


Operating costs
Operating Costs System

  • Fixed head pumping

    • Energy costs

    • Maintenance costs

  • Groundwater recharge basins

  • Wastewater reuse treatment

  • Fixed head hydropower

  • Urban water quality costs


Environmental constraints
Environmental Constraints System

  • 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


Hydrology surface groundwater
Hydrology Surface & Groundwater System

  • 1921 - 1993 historical inflows

    • Monthly flows

    • Represents the wide range of water availability over 72 years.



Database and interface

Tsunami of data for a controversial system 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.

Database and Interface


Calvin s innovations
CALVIN’s Innovations System

  • 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


Part II System

CALVIN Results &

Policy Conclusions


Policy alternatives
Policy Alternatives System

  • 1) 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


Some results
Some Results System

  • Water Scarcity & Economic Performance

  • Willingness to pay and Import Values

  • Costs of Environmental Flows

  • Economic Value of Facility Changes

  • Conjunctive Use







Value of additional imports to southern california
Value of Additional Imports to Southern California System

Colorado R.

SWP

Mono-Owens








Markets transfers exchanges
Markets, Transfers, & Exchanges System

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.


Infrastructure capacity
Infrastructure Capacity System

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.


Conjunctive use1
Conjunctive Use System

a) 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.


Water demands
Water Demands System

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.


Environmental flows
Environmental Flows System

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.


Regional vs statewide management
Regional vs. Statewide Management System

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.


Uses for CALVIN System

  • Integrated long-term regional and statewide planning

  • Integrated supply & demand data management

  • Preliminary economic evaluation

  • Planning & operations studies:

  • Facility expansion, Joint operations, Conjunctive use, Catastrophe response, Climate change, Water transfers, ...


Future of CALVIN System

  • Continuing University development (climate change, flood control, hydropower, …).

  • Discussions with DWR, USBR, and LLNL regarding adoption, improvement, and use of the model and related ideas.


Concluding Thought System

  • 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/


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