An integrated water-electricity market design for multi-reservoir mixed operation

Date: Wednesday 18 April 2012
Time: 11:00 a.m. to 12:00 p.m. Location: KF05 Kirkwood Village
Contact: For further information regarding this event, please contact Irene Joseph by sending email to irene.joseph@canterbury.ac.nz or by calling 6660
Audience: University staff and students

Management Doctoral Seminar. Indrajanaka Mahakalanda on "An integrated water-electricity market design for multi-reservoir mixed operation"

In the context of increasing scarcity and competition of water, governments and other entities are adopting a variety of productivity enhancing strategies. Demand offset strategies are gaining more attention over traditional expensive and non-sustainable supply augmentation solutions. Several commentators have argued for the potential of market-based instruments (MBIs) for natural resource allocation among the stakeholders (agents). In our study, we analyse a water rights market for multi-reservoir systems with mixed usage. We use an analogy between water and electricity in developing our water rights market design. We consider the physical complexities of multi reservoir systems, such as serially and parallel-connected reservoirs, canal inter-links and artificial storages. We also consider a variety of ways of organising and clearing the market and forward contracting. In many instances, either hydro generator agents or farmer agents control the reservoirs. However, the reservoir agent can be an independent economic agent, or controlled by the market itself. We investigate how these factors impact market efficiency, given various assumptions about key parameters such as reservoir size, relative to inflow variability. We consider the form of demand and offer bids required to enable the market to clear efficiently, then simulate participants’ learning behaviour using agent-based approaches.