IDEAS home Printed from https://ideas.repec.org/a/spr/waterr/v36y2022i6d10.1007_s11269-022-03115-2.html
   My bibliography  Save this article

A risk-based decision model for rainwater resource supply in forward contracts

Author

Listed:
  • Yu Zhang

    (Nanjing Hydraulic Research Institute
    Nanjing Hydraulic Research Institute)

  • Haifei Sha

    (Nanjing Hydraulic Research Institute)

  • Xiufeng Wu

    (Nanjing Hydraulic Research Institute
    Nanjing Hydraulic Research Institute)

  • Shiqiang Wu

    (Nanjing Hydraulic Research Institute)

  • Jiangyu Dai

    (Nanjing Hydraulic Research Institute
    Nanjing Hydraulic Research Institute)

  • Bin Xu

    (Hohai University)

  • Lei Yu

    (Nanjing Hydraulic Research Institute)

  • Qianqian Yang

    (Nanjing Hydraulic Research Institute
    Nanjing Hydraulic Research Institute)

Abstract

Rainwater is a supplemental source of water, in addition to surface water and groundwater. In the future market, forward contract is a common mode of trading, but it requires supplier to provide a fixed quantity of supply, which may result in suppliers being unable to fulfill their contracts due to uncertainties. Therefore, determining the contract volume of rainwater resource and evaluating its risk is important for contract negotiations. This paper aims to propose a contract volume risk decision model based on rainfall uncertainty and efficiency uncertainty of rainwater harvesting system (RHS), to provide decision support for determining contract volumes in rainwater resource forward transactions. A mathematical model is first introduced to quantify the uncertainty of rainfall. Then RHS’s efficiency is proposed to indicate how much rainwater resource is able to be provided by RHS per unit amount of rainwater. An optimal operation model is established for simulating the operation of RHS. Uncertainty description of RHS’s efficiency is developed from this RHS simulation model based on the historical rainfall records. Furthermore, the risk of rainwater resource supply is defined as the probability of not being able to fulfill the contract volume and a solution method is proposed. Afterwards, two sets of decision-making processes are proposed for different negotiation scenarios. Finally, this decision support approach is validated using a real-world example, and the results show that the approach provides effective and reasonable support for decision making in rainwater resource forward trading.

Suggested Citation

  • Yu Zhang & Haifei Sha & Xiufeng Wu & Shiqiang Wu & Jiangyu Dai & Bin Xu & Lei Yu & Qianqian Yang, 2022. "A risk-based decision model for rainwater resource supply in forward contracts," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 36(6), pages 1919-1936, April.
    • Handle: RePEc:spr:waterr:v:36:y:2022:i:6:d:10.1007_s11269-022-03115-2
    DOI: 10.1007/s11269-022-03115-2
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11269-022-03115-2
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s11269-022-03115-2?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Tomasz Zubala, 2022. "The Working Conditions and Optimisation of a Large Rainwater Harvesting and Treatment System in an Area at a Risk of Erosion," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 36(1), pages 135-152, January.
    2. Ahmad, Shakeel & Jia, Haifeng & Chen, Zhengxia & Li, Qian & Xu, Changqing, 2020. "Water-energy nexus and energy efficiency: A systematic analysis of urban water systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 134(C).
    3. Vargas-Parra, M. Violeta & Villalba, Gara & Gabarrell, Xavier, 2013. "Applying exergy analysis to rainwater harvesting systems to assess resource efficiency," Resources, Conservation & Recycling, Elsevier, vol. 72(C), pages 50-59.
    4. Su, Ming-Daw & Lin, Chun-Hung & Chang, Ling-Fang & Kang, Jui-Lin & Lin, Mei-Chun, 2009. "A probabilistic approach to rainwater harvesting systems design and evaluation," Resources, Conservation & Recycling, Elsevier, vol. 53(7), pages 393-399.
    5. Bekchanov, Maksud & Bhaduri, Anik & Ringler, Claudia, 2015. "Potential gains from water rights trading in the Aral Sea Basin," Agricultural Water Management, Elsevier, vol. 152(C), pages 41-56.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nazemi, Neda & Foley, Rider W. & Louis, Garrick & Keeler, Lauren Withycombe, 2020. "Divergent agricultural water governance scenarios: The case of Zayanderud basin, Iran," Agricultural Water Management, Elsevier, vol. 229(C).
    2. Ana Luiza Fontenelle & Erik Nilsson & Ieda Geriberto Hidalgo & Cintia B. Uvo & Drielli Peyerl, 2022. "Temporal Understanding of the Water–Energy Nexus: A Literature Review," Energies, MDPI, vol. 15(8), pages 1-21, April.
    3. Wang, Y.B. & Liu, D. & Cao, X.C. & Yang, Z.Y. & Song, J.F. & Chen, D.Y. & Sun, S.K., 2017. "Agricultural water rights trading and virtual water export compensation coupling model: A case study of an irrigation district in China," Agricultural Water Management, Elsevier, vol. 180(PA), pages 99-106.
    4. Negi, Rajhans & Chandel, Munish K., 2024. "Embodied energy and greenhouse gas emissions from wastewater reuse strategies in Indian Himalayan region," Renewable and Sustainable Energy Reviews, Elsevier, vol. 192(C).
    5. Danyang Di & Qi Shi & Zening Wu & Huiliang Wang, 2023. "Sustainable Management and Environmental Protection for Basin Water Allocation: Differential Game-based Multiobjective Programming," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 37(1), pages 1-20, January.
    6. Li, Guifang & Shi, Minjun & Zhou, Dingyang, 2021. "How much will farmers be compensated for water reallocation from agricultural water to the local ecological sector on the edge of an oasis in the Heihe River Basin?," Agricultural Water Management, Elsevier, vol. 249(C).
    7. Wang, Xue-Chao & Jiang, Peng & Yang, Lan & Fan, Yee Van & Klemeš, Jiří Jaromír & Wang, Yutao, 2021. "Extended water-energy nexus contribution to environmentally-related sustainable development goals," Renewable and Sustainable Energy Reviews, Elsevier, vol. 150(C).
    8. Danyang Di & Zening Wu & Huiliang Wang & Cuimei Lv, 2020. "A Double-Layer Dynamic Differential Game Model for the Optimal Trading Quantity of Water and Price Setting in Water Rights Transactions," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 34(1), pages 245-262, January.
    9. Youn, Seok-goo & Chung, Eun-Sung & Kang, Won Gu & Sung, Jang Hyun, 2012. "Probabilistic estimation of the storage capacity of a rainwater harvesting system considering climate change," Resources, Conservation & Recycling, Elsevier, vol. 65(C), pages 136-144.
    10. Stec, Agnieszka & Kordana, Sabina, 2015. "Analysis of profitability of rainwater harvesting, gray water recycling and drain water heat recovery systems," Resources, Conservation & Recycling, Elsevier, vol. 105(PA), pages 84-94.
    11. Seo, Yongwon & Ahn, Jungkyu & Kim, Young-Oh, 2013. "The impact of climate change on the benefit of a rain barrel sharing network," Resources, Conservation & Recycling, Elsevier, vol. 74(C), pages 66-74.
    12. Boroomandnia, Arezoo & Rismanchi, Behzad & Wu, Wenyan, 2022. "A review of micro hydro systems in urban areas: Opportunities and challenges," Renewable and Sustainable Energy Reviews, Elsevier, vol. 169(C).
    13. de Oliveira, Glauber Cardoso & Bertone, Edoardo & Stewart, Rodney A., 2022. "Challenges, opportunities, and strategies for undertaking integrated precinct-scale energy–water system planning," Renewable and Sustainable Energy Reviews, Elsevier, vol. 161(C).
    14. Min Ge & Fengping Wu & Xiaoping Chen, 2018. "Using Multiple Discriminant Analysis for the Assignment of Initial Water Entitlements at River Basin-Level under the Strictest Water Resources Management System Constraints in China," Sustainability, MDPI, vol. 10(12), pages 1-17, November.
    15. Henning Meschede & Paul Bertheau & Siavash Khalili & Christian Breyer, 2022. "A review of 100% renewable energy scenarios on islands," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 11(6), November.
    16. Guifang Li & Dingyang Zhou & Minjun Shi, 2019. "How Do Farmers Respond to Water Resources Management Policy in the Heihe River Basin of China?," Sustainability, MDPI, vol. 11(7), pages 1-19, April.
    17. Sun, J. & Li, Y.P. & Suo, C. & Liu, Y.R., 2019. "Impacts of irrigation efficiency on agricultural water-land nexus system management under multiple uncertainties—A case study in Amu Darya River basin, Central Asia," Agricultural Water Management, Elsevier, vol. 216(C), pages 76-88.
    18. Yongsheng Wang & Chenhuan Kou & Xujun Zhai, 2022. "Systematic Modeling and Policy Analysis on the Urban Water–Energy Nexus for Sustainable Resources Management," Sustainability, MDPI, vol. 14(23), pages 1-14, November.
    19. Xia Xu & Fengping Wu & Qianwen Yu & Xiangnan Chen & Yue Zhao, 2022. "Analysis on Management Policies on Water Quantity Conflict in Transboundary Rivers Embedded with Virtual Water—Using Ili River as the Case," Sustainability, MDPI, vol. 14(15), pages 1-19, August.
    20. Wu, Zheng & Tian, Guiliang & Xia, Qing & Hu, Hao & Li, Jiawen, 2023. "Connotation, calculation and influencing factors of the water-use rights benchmark price: A case study of agricultural water use in the Ningxia Yellow River irrigation area," Agricultural Water Management, Elsevier, vol. 283(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:waterr:v:36:y:2022:i:6:d:10.1007_s11269-022-03115-2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.