Economic Optimization of Conjunctive Use of Surface Water and Groundwater at the Basin Scale

Abstract

This paper presents an integrated hydrologic-economic modeling framework for optimizing conjunctive use of surface and groundwater at the river basin scale. Integrated river basin modeling with distributed groundwater simulation and dynamic stream-aquifer interaction allows a more realistic representation of conjunctive use and the associated economic results. The use of an economic objective function, maximizing the net economic value of water use, provides solutions that optimize economic efficiency in water resources management. Constraints guarantee the feasibility and sustainability of suggested operations. A nonlinear optimization model is presented for the Adra River Basin system (Spain). Model results suggest a variety of water management and operation strategies and indicate where significant the economic benefits can be obtained through capacity expansion. A procedure allowing a systematic assessment of the economic indicators required by the European Water Framework Directive (WFD) is provided. The shadow values of water balance constraints provide time series of marginal economic value of water at different locations, from which indicators of the WFD’s “resource cost” can be derived. The opportunity cost of satisfying minimum ecological streamflow, reservoir storage, or piezometric head constraints to achieve the required “good water status” can be assessed by the corresponding shadow values.