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Assessing hydropower operational profitability considering energy and reserve markets

Abstract

The authors analyse the operational profitability of a hydropower system selling both energy and reserve capacity in a competitive market setting. A mathematical model based on stochastic dynamic programming is used to compute the water values for the system considering different power plant configurations. The uncertainties in inflow and both energy and reserve capacity prices are considered through a discrete Markov chain. Subsequently, the system operation is simulated based on the obtained water values to assess system performance and expected revenues from the two markets. The model is applied in a case study for a Norwegian hydropower producer, showing how the power plant operation changes and profitability increases when considering sale of reserve capacity. The authors emphasise on how the water values are influenced by the opportunity to sell reserve capacity, and assess how the representation of non-convex relationships in the water value computations as well as simulation influence the profitability. © Copyright 2017 IET - All rights reserved
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Category

Academic article

Language

English

Author(s)

Affiliation

  • SINTEF Energy Research / Energisystemer
  • Technical University of Madrid
  • Lyse Energi AS

Year

2017

Published in

IET Renewable Power Generation

ISSN

1752-1416

Volume

11

Issue

13

Page(s)

1640 - 1647

View this publication at Norwegian Research Information Repository