Optimization of Inter-Basin Water Transfer Projects: From Macroeconomic Impacts to Technical Hydraulic Design

Water scarcity and supply insecurity are the primary barriers to economic growth in arid and semi-arid regions. Inter-basin water transfer projects are high-cost solutions that could create socio-environmental side effects. This study presents a novel approach to optimally design such projects from an investor's perspective. We employed an energy input-output analysis-based linear programming (LP) model to determine the water demands of various economic sectors within an optimal development scenario. The results from this LP model, combined with a survey on the sectors' willingness to pay, are then integrated into a mixed-integer non-linear programming (MINLP) model formulated to optimally design the long-distance Khersan Dam-to-Kerman Province water conveyance project. The project is a 650-kilometer long water transfer line with a maximum pumping height of 800 meters whose cost is sensitive to its capacity to be optimized. The model optimizes the project's capacity based on the level of investment economically justified by the sectors demanding a sustainable water supply. Our findings indicate that approximately 85 percent of the increase in the water demand of Kerman’s economic activities (except agriculture, water provision, and service sectors) over the project's lifetime could be met using only 5.2% of its total capacity. Furthermore, the financial participation of these economic activities could enhance the project's net benefit by up to 6.3%.