The Optimal Joint Provision of Water for Irrigation and Hydropower

This study develops a dynamic optimization model to analyze the intertemporal allocation of surface water for irrigation and for hydropower production in the western United States. The issue arises because peak irrigation demands may not coincide with periods of peak demand for power. Water released for irrigation in the spring reduces the reservoir head and diminishes the capacity to generate power during summer peak demands. The optimization model is applied to irrigation districts in central California. Results show considerable deviation between the actual and the optimal allocations. Suboptimal behavior is linked to the districts' failure to articulate clear property rights to the scarce water resources.