Stackelberg game based optimal water allocation from the perspective of energy-water nexus: A case study of Minjiang River, China

Abstract

Energy and water are interdependent. Water is essential for energy production, and energy is indispensable for water processes. This paper develops a Stackelberg game based bi-level multi-objective model for optimal water allocation under uncertainties from an energy-water nexus perspective, which considers energy-related water consumption and water-related energy production. It handles the hierarchical decision-making problem between the river basin authority and the subareas, as well as the tradeoffs between social equality and ecological damage. The upper level of the model makes schemes on water allocation for multiple subareas, and the lower level decides on water allocation for different types of power generation. To generate reasonable and practical strategies for water allocation, ɛ-constraint method and KKT conditions are used. A case study of Minjiang River, China is given to demonstrate the applicability and practicality. Scenarios analysis is also conducted to demonstrate the effectiveness of the model and the effects of the control parameter changes. The results indicate that the river basin authority would allocate larger water resources to the subareas with higher energy demand. It is concluded that the proposed allocation method is advantageous to the subareas with higher water utilization efficiency. The proposed bi-level model demonstrates its reasonableness and superiority to the single-level model. Policy implications are finally provided to support the sustainable development of energy-water nexus.