The Use of Game Theory as a Decision Support Tool for the Electricity Sector Regarding Water Use. Case Study: Paraíba do Sul River Basin - Brazil

Abstract Submission: Currently 65% of Brazil's electricity generation has been produced by hydropower plants, with the remaining 35% divided between wind, solar, thermal and nuclear plants. The reservoirs that are used for power generation are also used for other purposes, such as irrigation, public supply, flood control, tourism, navigation and environmental protection. The demands and decisions of the multiple water users have an impact on the planning and management of the Brazilian electricity sector. In this study we analyze how users in the electricity sector can make more assertive decisions when faced with the actions of public supply companies. The study region is the Paraíba do Sul River Basin, located in the states of São Paulo, Rio de Janeiro and Minas Gerais in Brazil. This region is currently responsible for approximately 6% of Brazil's hydropower generation but located in the most populated area of the country, with conflicts between water users. Water transfer systems are used to and from neighboring basins to operate water supply systems of the metropolitan regions of São Paulo, Rio de Janeiro and the Paraíba do Sul Valley, with a total of more than 36 million inhabitants. Water supply companies are the largest consumptive water users in the region studied. Game theory is used as a methodological tool to demonstrate the best competitive and/or collaborative strategies for the electricity sector to improve generation and water security in the face of the water use needs of public supply.

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