This paper addresses the questions: How to calculate the cost of a start/stop cycle? How to calculate the cost of running one hour outside normal operating range, e.g., on part load? The paper presents a model for calculation of start/stop cost for individual hydropower units comprising both direct costs incurring at each start/stop cycle, and indirect cost because of reduced rehabilitation intervals for the main components. The fundamental assumption is that frequent start-ups lead to increased stress, degradation and wear reducing residual service life equivalent to a certain number of normal operating hours, thus accelerating the need for rehabilitation. The proposed model is used for calculation of both average cost and marginal cost for one start/stop cycle. When calculating the marginal cost, the technical condition of the turbine and generator as well as the length of the stand-still period can be considered. Applying a similar approach, the model is extended to calculate the cost of ramping, part load and overload operation, i.e., costs incurring when using the unit outside the normal operating range. This extension for operation related costs is important to include when deciding hydropower scheduling in systems with large shares of variable generation from wind and solar. Such operation related costs are very important to consider when calculating of the optimal operating strategy for the hydropower units in power systems where hydropower delivers flexibility in terms of load following and different types of reserves. © 2023, The Author(s).