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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Real work done by
Dr. Andrew J. Draper
Matthew D. Davis
Brad D. Newlin
Brian J. Van Lienden
Siwa M. Msangi
Pia M. Grimes
Jennifer L. Cordua
Matthew Ellis
Inês Ferreira
Dr. Kenneth W. Kirby
Kristen B. Ward
Stacy Tanaka
Randy Ritzema
Guilherme Marques
Dr. Arnaud Reynaud
Mark Leu
Tingju Zhu
Sarah Null
2
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
3
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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Overview
Part 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
5
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
6
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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Themes
1. 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?
800
700
Scarcity
Cost600
500
Total
Value
400
300
200
Scarcity
100
0
00
2
D
4
6
M8
10
Delivery
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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.
11
CALVIN Optimization – In Words
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
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Approach
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.
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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
15
Model Schematic - South
16
CALVIN’s Demand Coverage
Reservoirs
Not in CALVIN
Upper Sacramento Valley
Lower Sacramento Valley & Delta
San Joaquin and Bay Area
Tulare Basin
Southern California
17
Economic Values for Water
• Agricultural: Production model SWAP
• Urban: Based on price elasticities of demand
• Operating Costs
• Environmental: Use constraints instead of
economic values
18
SWAP Model Regions
SACRAMENTO VALLEY REGIONS
SAN JOAQUIN VALLEY REGIONS
1
2
SOUTHERN CALIFORNIA REGIONS
3
5
4
7
6
8
9
11
12
10
13
16
17
14
15
19
18
20
21
Coachella Valley
Palo Verde
Imperial Valley
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Agricultural Crop Descriptions
Crop Category
Cotton
Field
Fodder
Grain
Grapes
Pasture
Orchard
Tomatoes
Rice
Sugarbeets
Subtropical
Truck
Description of Included Crops
Cotton
Field Corn
Alfalfa hay, Pasture, Miscellaneous Grasses
Wheat
Table, Raisin, and Wine Grapes
Irrigated Pasture
Almonds, Walnuts, Prunes, Citrus and Peaches
Fresh Market and Processing Tomatoes
Rice
Sugarbeets
Avocado, Olives, Figs, and Pomegranates
Melons, Onions, Potatoes, and Miscellaneous Vegetables
Source: CVPIA, 1997, Technical Appendix Volume Eight; Various Counties Agricultural Crop and
Livestock Report, Various Years
20
Tomato Production-Yolo County
Water
Land
21
Efficiency-Cost Trade-offs:
Orchards Sacramento Valley
160
$/Acre/Year
140
120
100
80
60
40
20
0
1
1.5
2
2.5
AW/ETAW
22
Agricultural Water Use Values
July
June
August
70,000
Benefits ($ 000)
60,000
50,000
March
40,000
May
3,000
30,000
April
October
February
January
2,000
20,000
1,000
10,000
September
0
0
October
50
100
0
150
200
5
250
Deliveries (taf)
300
10
350
15
400
23
Urban Water Use Values
50,000
Winter
45,000
Penalty ($000)
40,000
35,000
Spring
30,000
Summer
25,000
20,000
15,000
10,000
5,000
0
20
25
30
35
40
45
Deliveries (taf)
50
55
60
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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
25
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
26
Hydrology Surface &
Groundwater
1921 - 1993 historical inflows
• Monthly flows
• Represents the wide range of
water availability over 72 years.
27
Data Flow for the CALVIN Model
Surface and
ground water
hydrology
Physical facilities
& capacities
Environmental
flow constraints
Urban values of
water (elasticities)
Agricultural
values of water
(SWAP)
Operating costs
Economic benefits
of alternatives
CALVIN Economic
Optimization Model:
Databases HECPRM
of Input &
Solution
Meta- Data Model
Conjunctive use &
cooperative
operations
Willingness-to-pay
for additional
water & reliability
Water operations
& delivery
reliabilities
Value of more
flexible operations
Values of
increased facility
capacities
28
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.
29
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 II
CALVIN Results &
Policy Conclusions
31
Policy Alternatives
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
32
Some Results
• Water Scarcity & Economic Performance
• Willingness to pay and Import Values
• Costs of Environmental Flows
• Economic Value of Facility Changes
• Conjunctive Use
33
Total Costs by Region
Average Total Cost ($M/yr)
BC RWM SWM
Upper Sacramento Valley 35
34
29
Lower Sacramento &
212 166 166
Delta
San Joaquin and Bay
394 358 333
Area
Tulare Lake Basin
453 424 417
Southern California
3074 1855 1838
TOTAL
4169 2838 2783
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Scarcity by Region
Region
Upper Sacramento Valley
Lower Sacramento & Delta
San Joaquin and Bay Area
Tulare Lake Basin
Southern California
TOTAL
Agriculture Only
Upper Sacramento Valley
Lower Sacramento & Delta
San Joaquin and Bay Area
Tulare Lake Basin
Southern California
Total Agriculture
Urban Only
Upper Sacramento Valley
Lower Sacramento & Delta
San Joaquin and Bay Area
Tulare Lake Basin
Southern California
Total Urban
Average Scarcity (taf/yr)
BC*
RWM*
SWM*
144
157
0
27
1
1
16
0
0
274
322
33
1132
929
857
1594
1409
890
Average Scarcity Cost ($M/yr)
BC
RWM
SWM
7
5
0
36
1
1
15
0
0
37
19
2
1501
255
197
1596
279
200
144
8
0
232
309
693
157
0
0
322
703
1182
0
0
0
30
703
733
7
0
0
19
6
32
5
0
0
18
28
51
0
0
0
1
28
29
0
19
16
42
823
901
0
1
0
0
227
227
0
1
0
2
154
157
0
36
15
18
1495
1564
0
1
0
0
227
227
0
1
0
1
169
170
35
Agricultural Scarcity Cost
Changes by Region - SWM
36
Urban Scarcity Cost Changes - SWM
37
Willingness-to-Pay
CVPM 2
CVPM 8
CVPM 15
CVPM 17
CVPM 18
Imperial
Napa-Solano
East Bay MUD
San Francisco
Fresno
Castaic Lake
Coachella
E & W MWD
Average WTP ($/af)
BC
RWM
SWM
42
15
0
0
0
0
40
26
14
0
18
11
162
40
0
24
68
68
694
0
0
351
28
28
291
0
0
472
0
42
10,495
645
519
1,520 1,358
1,358
831
219
2
38
Value of Additional Imports to
Southern California
3000
Marginal Value ($/AF)
Mono-Owens
2849
Colorado R.
SWP
2500
2000
1500
1000
917
628
500
739
486
189
1
105
105
0
BC RWM SWM BC RWM SWM BC RWM SWM
39
Marginal Cost of Trinity River Flows
50
Marginal Cost ($/af)
40
30
Regional
Statewide
20
10
0
1921
1931
1941
1951
1961
1971
1981
1991
40
Environmental Flow Costs
Avg Opportunity Cost ($/af)
Environmental Requirement
RWM
SWM
Trinity River
46
1
American River
0
0
Stanislaus River
4
1
Merced River
3
2
Mono Lake Inflows
963
818
Owens Lake Dust Mitigation
750
611
Sacramento West Refuge
42
~0
Kern Refuge
43
34
Delta Outflow
0
0
41
Economic Value of Facility Changes
Annual Expansion Value ($/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
42
Statewide Groundwater Storage
640
635
630
Total Storage (MAF)
625
620
615
610
605
600
595
590
Base Case
585
Statewide Unconstrained
580
1922 1928 1934 1940 1946 1952 1958 1964 1970 1976 1982 1988
43
Conjunctive Use
60%
55%
BASE CASE
50%
REGIONAL WATER MARKET
Annual Supply - % Groundwater
45%
STATEWIDE WATER MARKET
40%
35%
30%
25%
20%
15%
10%
5%
0%
0%
10%
20%
30%
40%
50%
60%
Annual Exceedence Probability
70%
80%
90%
100%
44
Policy Conclusions
45
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.
46
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.
47
Conjunctive Use
a) Statewide: surface storage
groundwater storage
CALVIN uses
Base Case uses
~40 MAF
140+ MAF
~73 MAF
~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.
48
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.
49
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.
50
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.
51
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, ...
52
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.
53
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/
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