Abstract
The Nordic day-ahead power market is characterised by a substantial share of hydropower generation. For run-of-river hydropower subject to hydraulic time delay, production at an upstream plant at one point in time constrains the production at downstream plants at other points in time. This paper presents a case study that identifies the impact of such time delays on bidding curves submitted to the day-ahead market. The analysis shows that bid volumes are lower than in a counterfactual model of the watercourse that does not account for hydraulic time delay. Furthermore, by conditioning on inflow, price and production schedule, the study identifies the situations in which the reduction in bid volumes is most pronounced. The findings can inform the development of specialised bidding strategies that enhance market efficiency, particularly as the increasing share of non-dispatchable renewable energy sources introduces additional uncertainty into the power market.