Integrated Reservoir Management under Stochastic Conditions

Deepayan Debnath, Arthur L. Stoecker, Tracy Boyer () and Larry D. Sanders

No 108178, 2011 Annual Meeting, June 29-July 1, 2011, Banff, Alberta,Canada from Western Agricultural Economics Association

Abstract: This study is primarily concerned with the planning and management of a multipurpose reservoir. An economic optimization model using non-linear programming is developed and solved using Risk Solver to maximize the net economic benefits derived from different use of reservoir water under uncertainties. Marketed: urban and rural water supply and hydropower generation and non-marketed: lake recreation uses are considered directly in the maximization problem while flood control and downstream releases are incorporated as constraints. Stochastic inflows to the reservoir are considered to be log normally distributed. Lake Tenkiller because of its clear water and scenic beauty is chosen for this study. A mass balance equation is used to determine the level and volume of water in the lake for each period over the year 2010. Both the value of a visitor day and the number of visitor are the function of lake level which makes it completely unique. Results show that for Lake Tenkiller it is beneficial to maintain the lake level at around 634 feet above mean sea level (famsl) until mid-August, and then start drawing down for hydropower generation. A sensitive analysis is also performed with different values of visitor day and peak electricity prices. However, the results remain the same for all different scenarios making the model completely robust and the solution also satisfies the equi-marginal principle.

Keywords: Environmental Economics and Policy; International Development; Land Economics/Use; Production Economics; Productivity Analysis; Public Economics; Resource/Energy Economics and Policy; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 41
Date: 2011
New Economics Papers: this item is included in nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:ags:waea11:108178

DOI: 10.22004/ag.econ.108178

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