Potential benefits of sharing water from the Potential benefits of sharing water from the Yali hydropower reservoir, Vietnam Yali hydropower reservoir, Vietnam

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Vũ Xuân Nguyệt Hồng, CIEM – MK2 Team leader for Vietnam Nguyễn Việt Anh, ICEM – MK2 Vietnam Team MemberYumiko Kura, WorldFish – MK2 Project Leader

Presentation for the 3rd Mekong Forum on Water, Food and Energy

19-21 November, 2013, Hanoi, Vietnam

Presentation contents1. Study approach and methods2. Contribution of different water sources to the

local economic activities3. Possible future water shortages4. Trade-offs from using Yali reservoir water for

non-hydropower purposes 5. Conclusion

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1. Study Approach and Methods1. Study Approach and Methods• Objectives:

Provide useful information on economic benefits of the alternative schemes of water use in Yali reservoir for coordination of water management strategies in two central highland provinces of VN.

• Methodology:• Use direct use method to analyze water value for local

communities based on household survey of 350 households in the reservoir’s buffer zone

• Water demand estimates based on socioeconomic development plans at district and provincial levels

• Analysis of water availability and allocation trade-offs using hydrological models

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• 2km buffer zone around Yali reservoir, where Yali hydropower plant operates (since April 2002)

• 46 villages surrounding the reservoir which are parts of Chư pah district in Gia Lai province, and Sa thầy district and Kontum city in Kontum province.

• This covers a land area of 355,5 km2 with 33.3 thousands residents

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Study Area

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• Water use issues: – Single water use of Yali reservoir for hydropower

generation (reservoir exclusively managed by a state hydropower company -EVN);

– Limited water access to reservoir by local households whose livelihoods much depend on water (irrigation, fishing, aquaculture, washing, cooking etc.) ;

– Multiple use of water is not clearly addressed in local authority’s water planning and allocation (both cross-sector and trans-boundary)

– Lack coordination between the two provincial authorities, and the hydropower plant on water use allocation (upstream and downstream of Yali reservoir).

The water issues...

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Table: % of Households Using Different Sources of WaterFor River/Stream Rain Water /Springs Tap Water Wells Yali ReservoirDrinking 10 1 6 80 0Bathing 9 6 5 78 1Washing 9 6 5 76 0Irrigation 36 30 6 22 4Fishing 0 - - - 9Livestock watering 8 0 0 50 0Transportation - - - - 0

• Public and private wells are the most importance source of water for domestic uses and livestock

• Rain water and small rivers /streams are the main water source for agriculture

• Use of Yali reservoir water is limited to some fishing and irrigation activities; But

• 91% of the households who are involved in fishing consider Yali reservoir important for fishing

2. 2. Contribution of different water sources Contribution of different water sources to the local economic activitiesto the local economic activities

Water sources for agriculture activities

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Note: X farly important; XX important; XXX very important

Rice Cassava Coffee Cinnamon Rubber1 = Reservoir no no no no no

2 = Irrigation canal no no X no no3 = Stream XX no XX no no

4 = Rain Water XX XXX no XXX XXX5 = Dug well no no XX No no

6 = Drilled well no no no no no7 = River no no no no no

8 = Mountain water drop XX no no no no9= Others no no No no no

Rice Cassava Coffee Cinnamon Rubber1= Canal irrigation X no no No no2=Flood irrigation XX no no no no

3= Motor pumping no no XXX no no

4 = Drawdown agriculture no no no X XXX5= Manual watering no no No no no

6= Rain water XX XXX no XXX no

Irrigation sourcesCrop type

Crop typeIrrigation method

Water sources for domestic and livestock use

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Drinking Washing clothes

Bathing Irrigation Livestock cleaning

River no no no no no

Stream/Creek X X X XX X

Rain Water Barrel no no no no X

Mountain water drop no no X X X

Tap – public no no no no no

Openned well XX XX XX no no

Drilled well XX XX XX XX XX

Other no no no X no

Source of water Use of water for

Note: X farly important; XX important; XXX very important

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Structure of income from economic activities (% of total revenue of household from economic activities)

Economic activity Whole sample Chupah Sathay

1000 VND Structure %

1000 VND Structure %

1000 VND Structure %

1. Agriculture 48246.4 79.2% 52841.5 78.1% 43690.5 79.8% Of which,

Farm 42904.0 70.1% 46684.8 69.0% 38708.2 70.7% Livestock 2999.4 4.8% 3924.1 5.8% 2299.6 4.2% Fishery 795.7 1.3% 2165.0 3.2% 109.5 0.2% Forestry 1635.6 3.0% 67.7 0.1% 2573.2 4.7% 2. Non-agriculture 12730.4 20.8% 14817.3 21.9% 11059.5 20.2% 3. Total 61,204 100% 67,659 100% 54,750 100%

Contribution of water-dependent activities to household income generation

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3. 3. Possible future water shortagesPossible future water shortages

Surface water availability near Yali reservoir • Surface water stress occurs

during the dry season• Water demand is expected

to increase in future• Water from the reservoir

may be helpful in a severe drought and water shortage year

• What would be the impact on hydropower production if the local communities are allowed to use reservoir water?

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Comparing hydropower production under two hydrological scenarios:•Scenario 1 (Baseline): Yali reservoir is managed exclusively for hydropower production•Scenario 2: Reservoir water is used to meet 100% of the total water demand within a 2km buffer zone around the reservoir (annual water demand is 81.3 million m3)

4. 4. Trade-offs from using Yali reservoir Trade-offs from using Yali reservoir water for non-hydropower purposes water for non-hydropower purposes

• Reservoir storage capacity in the dry season is reduced by 3.6% on average (493m3 daily)

• Power production in the dry season is reduced by 3.5% on average (3,194kWh)

• Total annual reduction in power production is 34.6 GWh or 9.6 billion VND, approximately $450,000

• 83% of the loss occurs during dry season but dry season production is only 22% of the yearly production

Comparison of hydropower production between two scenarios

Water economic benefit valuation from hydropower generation

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For hydropower generation (m3/year) 2,394,049,315Electricity Production of Yali (million KWh) 3680Price sold to EVN (VND/KWh) 280Production output value from hydropower generation (million VND) 1030400Water economic benefit from hydropower generation (VND/m3) 430.40

Water Economic valuation from non-hydropower activities

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Note: 1USD = 20,000 VND;

Sathay district Chu Pah district Kon Tum town TotalEconomic benefit (thousand VND/m3 water) 4.864 4.987 10.050 6.061From crops farming 4.376 4.456 9.950 5.519From aquaculture 11.592 18.825 19.051 15.627From domestic use 8.283 8.283 8.283 8.283From lifestock 6.828 8.431 27.294 10.014Economic benefit (USD/m3 water) 0.243 0.249 0.503 0.303From crops farming 0.219 0.223 0.498 0.276From aquaculture 0.580 0.941 0.953 0.781From domestic use 0.414 0.414 0.414 0.414From lifestock 0.341 0.422 1.365 0.501

Comparison of water economic value estimates

From agriculture From domestic useHighland Vietnam 0.276 0.414Asia 0.219 0.303World 0.319 0.59

Source: - Figures for Vietnam were from the table above; - Figures for Asia and the World were from “Economic value of water for “Agriculture, domestic and industrial use: A global compilation of economic studies and market prices”. By Ecosystem Economics LLC, USA. in May 2010

5. Conclusion5. Conclusion

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Economic benefit /m3 of water for the local communities is 10 - 60 times higher than the sales value of electricity /m3 to the hydropower company

Even if 100% of water demand of the local communities within 2km of the Yali reservoir is supplied by the reservoir, the reduction in the electricity production would be relatively small

Increased access to the water resources in Yali reservoir can potentially create high economic benefit to the local communities, especially in drought or water shortage conditions

More research is needed on technical and institutional feasibility of using the Yali reservoir for non-hydropower uses

Thank you for your attention!

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