Economic Analysis of Large-Scale Upstream River Basin Development on the Blue Nile in Ethiopia Considering Transient Conditions, Climate Variability, and Climate Change
Publication: Journal of Water Resources Planning and Management
Volume 136, Issue 2
Abstract
The upper Blue Nile Basin in Ethiopia harbors considerable untapped potential for irrigation and large-scale hydropower development and expansion. Numerous water resources system models have been developed to evaluate these resources, yet often fail to adequately address critical aspects, including the transient (e.g., filling) stages of reservoirs, relevant streamflow retention policies and downstream consequences, construction staggering, and the implications of stochastic modeling of variable climate and climate change. This omission has clear economic impacts on benefits and costs and could be pivotal in national policy and decision making. The Investment Model for Planning Ethiopian Nile Development dynamic water resources system model is outlined and applied to address these aspects. For the hydropower and irrigation development projects specified, model results disregarding transient and construction stagger aspects demonstrate overestimations of $6 billion in benefits and 170% in downstream flows compared to model results accounting for these aspects. Benefit-cost ratios for models accounting for transient conditions and climate variability are found to range from 1.2–1.8 under historical climate regimes for the streamflow retention policies evaluated. Climate change scenarios, represented either by changes in the frequency of El Niño and La Niña events or by the Special Report on Emissions Scenarios projections, indicate potential for small benefit-cost increases, but also reflect the potential for noteworthy decreases, relative to the historical climate conditions. In particular, stochastic modeling of scenarios representing a doubling of the historical frequency of El Niño events indicates benefit-cost ratios as low as 1.0, even under perfect foresight optimization modeling, due to a lack of timely water. However, even at this ratio, Ethiopia, at current growth rates, may still be unable to absorb all the potential energy developed, reinforcing the need for significant economic planning and the necessity of securing energy trade contracts prior to extensive expansion.
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Acknowledgments
This research study was partially funded by a grant from the U.S. Agency for International Development (USAID) through the International Food Policy Research Institute (IFPRI). Additional funding was provided by a grant/cooperative agreement from the National Oceanic and Atmospheric Administration, Grant No. UNSPECIFIEDNA0OAR4311004. The views expressed herein are those of the writers and do not necessarily reflect the views of NOAA or any of its subagencies. Additional acknowledgment is offered to the General Algebraic Modeling System (GAMS) Development Corporation, who graciously provided technical support and specialty licenses. The writers also thank the three anonymous reviewers for their careful review and insightful comments and suggestions, certainly improving the quality of this paper.
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Information
Published In
Journal of Water Resources Planning and Management
Volume 136 • Issue 2 • March 2010
Pages: 156 - 166
Copyright
© 2010 ASCE.
History
Received: Jun 9, 2008
Accepted: Feb 17, 2009
Published online: Feb 12, 2010
Published in print: Mar 2010
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