Supporting water infrastructure investment planning within the water-energy-food nexus

Abstract

Demographic and economic growth lead to important increase in demands for water, energy, and food. To meet these growing demands, multiple water-related infrastructure like hydropower, irrigation, transfer schemes are planned around the world. One challenge for decision-makers is to evaluate the interactions between the potential projects and the existing natural-human system. Interactions are particularly complex because water projects are linked to different sectors: irrigation is related to the food sector, hydropower to the energy sector. The decision-making process is further complicated by uncertainties of climate change and socio-economic growth. Therefore, there is a need for quantitative tools to evaluate impacts of projects considering the inter-dependencies between the water, energy, and food sectors while considering uncertainties. The aim of this PhD project was to develop an open-source decision support tool for water infrastructure planning, based on early work at COWI. Beyond the development of the tool, the specific aims of this PhD project were: (1) understand the added value of representing the agricultural and power sectors for water infrastructure planning, (2) evaluate the impact of the "perfect foresight" modelling assumption often used in planning models, (3) develop a pragmatic approach to select and prioritize projects under uncertain futures. The tool developed in this PhD project, WHAT-IF (Water, Hydropower, Agriculture, Tool for Investment and Financing), integrates, in a holistic hydro-economic optimization framework, representations of the water, power and agriculture systems. The tool is generic, open-source and available for community development (https://github.com/RaphaelPB/WHAT-IF). WHAT-IF was applied to the Zambezi River Basin that spans through eight Southern African countries and supports important economic activities and ecosystems. The population in the basin is expected to grow from 40 million to about 70 million people in 2050. As a result, food demand might double, while electricity demand might triple. Hydropower and irrigation projects could double current hydropower capacity and triple current irrigated land. However, it is unclear whether expanding hydropower and irrigation jointly would lead to trade-offs between the projects and conflicts with environmental flow requirements. Furthermore, the river basin is threatened by uncertain impacts of climate change. The mean annual flow could change by -50% to +30% depending on the climate scenario, which will affect the performance of the projects. The application of WHAT-IF to the Zambezi case lead to the following insights: • With an increasing power demand, several hydropower projects are found economically feasible, while being compatible with environmental flow policies. A drying climate would particularly affect existing large plants (Kariba and Cahora Bassa), as well as some projects that are not found beneficial under a drying climate. The introduction of a carbon tax would particularly favor hydropower projects, while likely cost-overrun threatens the feasibility of several projects. Solar and wind power have technically a high potential, this potential should be unleashed in practice. • With decreasing rainfall and increasing crop demands, there is potential to significantly develop irrigated agriculture. The development is limited by trade-offs with hydropower production, particularly in catchments with large existing abstractions and multiple downstream hydropower plants (e.g. Kafue Flats). Thus, irrigated land is likely to remain a limited share of the total cultivated area. To meet future food demands, fight poverty, and alleviate climate change impacts, countries must also focus on policies and investments improving rainfed agriculture. When evaluating hydropower and irrigation projects in the Zambezi, the "perfect foresight" modelling assumption is found to have a non-negligible but small impact compared to uncertainties linked to climate and socio-economic change. The representation of the power and agricultural sectors enables to characterize "when, where, and how much" water is needed, and "how valuable" is the water resource under different scenarios. Considering the power and agriculture sectors holistically is expected to be important when considering large projects that will considerably affect the current economic equilibrium. This work is a contribution to the development of models representing the interrelations between the water, energy, and food sectors. This will be key to support decision-makers consider the full range of solutions that can achieve multiple Sustainable Development Goals (SDGs), including SDG 1, "No poverty", SDG 2 "Zero hunger", SDG 6 "Clean water and sanitation", SDG 7 "Affordable and clean energy", and SDG 13 "Climate Action", while evaluating trade-offs among those objectives.