TY - JOUR
T1 - Nexus vs. Silo Investment Planning Under Uncertainty
AU - Payet-Burin, Raphaël
AU - Kromann, Mikkel
AU - Pereira-Cardenal, Silvio
AU - Strzepek, Kenneth Marc
AU - Bauer-Gottwein, Peter
N1 - Funding Information:
This work was supported by Innovation Fund Denmark (grant no. 7038-00015B), COWIFonden (grant no. C-137.02), and COWI A/S funded the industrial PhD project in which this research was carried out.
Publisher Copyright:
Copyright © 2021 Payet-Burin, Kromann, Pereira-Cardenal, Strzepek and Bauer-Gottwein.
PY - 2021
Y1 - 2021
N2 - Water, energy, and agricultural infrastructure investments have important inter-relations fulfilling potentially competing objectives. When shaping investment plans, decision makers need to evaluate those interactions and the associated uncertainties. We compare planning infrastructure under uncertainty with an integrated water-energy-food nexus framework and with sector-centered (silo) frameworks. We use WHAT-IF, an open-source hydroeconomic decision support tool with a holistic representation of the power and agriculture sectors. The tool is applied to an illustrative synthetic case and to a complex planning problem in the Zambezi River Basin involving reservoirs, hydropower, irrigation, transmission lines and power plant investments. In the synthetic case, the nexus framework selects investments that generate more synergies across sectors. In sector-centered frameworks, the value of investments that impact multiple sectors (like hydropower, bioenergy, and desalinization) are under- or overestimated. Furthermore, the nexus framework identifies risks related to uncertainties that are not linked to the investments respective sectors. In the Zambezi river case, we find that most investments are mainly sensitive to parameters related to their respective sectors, and that financial parameters like discount rate, capital costs or carbon taxes are driving the feasibility of investments. However, trade-offs between water for irrigation and water for hydropower are important; ignoring trade-offs in silo frameworks increases the irrigation expansion that is perceived as beneficial by 22% compared to a nexus framework that considers irrigation and hydropower jointly. Planning in a nexus framework is expected to be particularly important when projects and uncertainties can considerably affect the current equilibrium.
AB - Water, energy, and agricultural infrastructure investments have important inter-relations fulfilling potentially competing objectives. When shaping investment plans, decision makers need to evaluate those interactions and the associated uncertainties. We compare planning infrastructure under uncertainty with an integrated water-energy-food nexus framework and with sector-centered (silo) frameworks. We use WHAT-IF, an open-source hydroeconomic decision support tool with a holistic representation of the power and agriculture sectors. The tool is applied to an illustrative synthetic case and to a complex planning problem in the Zambezi River Basin involving reservoirs, hydropower, irrigation, transmission lines and power plant investments. In the synthetic case, the nexus framework selects investments that generate more synergies across sectors. In sector-centered frameworks, the value of investments that impact multiple sectors (like hydropower, bioenergy, and desalinization) are under- or overestimated. Furthermore, the nexus framework identifies risks related to uncertainties that are not linked to the investments respective sectors. In the Zambezi river case, we find that most investments are mainly sensitive to parameters related to their respective sectors, and that financial parameters like discount rate, capital costs or carbon taxes are driving the feasibility of investments. However, trade-offs between water for irrigation and water for hydropower are important; ignoring trade-offs in silo frameworks increases the irrigation expansion that is perceived as beneficial by 22% compared to a nexus framework that considers irrigation and hydropower jointly. Planning in a nexus framework is expected to be particularly important when projects and uncertainties can considerably affect the current equilibrium.
KW - decision support
KW - hydroeconomic
KW - infrastructure
KW - planning
KW - robust decision making
KW - uncertainty
KW - water-energy-food nexus
KW - WHAT-IF
U2 - 10.3389/frwa.2021.672382
DO - 10.3389/frwa.2021.672382
M3 - Journal article
AN - SCOPUS:85113389651
VL - 3
JO - Frontiers in Water
JF - Frontiers in Water
SN - 2624-9375
M1 - 672382
ER -