Optimal Hedging Rules for Reservoir Flood Operation from Forecast Uncertainties
Publication: Journal of Water Resources Planning and Management
Volume 140, Issue 12
Abstract
This paper develops optimal hedging rules for reservoir flood control operation under hydrological uncertainty using hydroeconomic and mathematical analysis. The capacity to convey flood flows is sometimes a scarce resource. Hedging for flood operations uses reservoir storage to allocate the expected flood-safety margin (EFSM, i.e., the gap between expected flood volume and flood-conveyance capacity) optimally between present and future periods. Optimal flood-operation hedging falls into three cases, namely, (1) for large expected floods, all flood storage and almost all channel-conveyance capacity are used in the current period to cope with the current, more certain, and urgent flood risk; (2) for medium expected floods, the available EFSM is balanced between the current and future periods, but a larger portion of the total EFSM remains allocated to the current stage; and (3) for small expected floods, the future stage receives greater EFSM allocation by keeping reservoir space empty in the current period. Optimal hedging for flood operation is illustrated by a curve similar to that of hedging for water supply. The physical implications of hedging highlight the economic significance of this practice for balancing the marginal value of scarce flood-management resources under uncertainty.
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Acknowledgments
The authors are grateful to the editor, the associate editor, and three anonymous reviewers for their constructive suggestions, which have facilitated major improvements in this paper. The authors are also grateful to Professor Ximing Cai for the helpful and constructive comments on an earlier version of this paper. This research was supported by the Ministry of Science and Technology of China (Project No. 2013BAB05B03 and No. 2011BAC09B07 ) and the National Natural Science Foundation of China (Project No. 51179085).
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Information
Published In
Journal of Water Resources Planning and Management
Volume 140 • Issue 12 • December 2014
Copyright
© 2014 American Society of Civil Engineers.
History
Received: Jul 15, 2013
Accepted: Jan 10, 2014
Published online: Jan 13, 2014
Discussion open until: Nov 4, 2014
Published in print: Dec 1, 2014
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