Collaborative Modeling to Construct a Hedging Policy for Drought Management in Reservoir Systems

In situations of fluctuating water availability, the optimal reservoir operation policy, resulting from classical models, fails to be implemented for political reasons. This paper proposes a collaborative modeling approach to define the hedging rules of a two-basin reservoir system, in which the acceptable risks, rationing ratio, and reasonable transfer values are defined by the water allocation agents for different phases/drought states. An optimization algorithm is then applied to determine a politically viable hedging operation policy. The methodology showed good results for the Jaguaribe–Metropolitan system in Brazil, and the resulting policy could be applied to the real operation, as the simulated rationing frequencies were close to those defined by the managers’ consensus. The proposed methodology guarantees a politically viable alternative with conflict management possibilities. However, the performance of the resulting hedging rules depends on the negotiation capacity and tacit knowledge of the stakeholders. The proposed approach is a good alternative when the implementation of the mathematically optimum policy fails.