Assessing hydropower operational profitability considering energy and reserve markets. Issue 13 (12th September 2017)

• Record Type: Journal Article
• Authors: Helseth, Arild; Fodstad, Marte; Askeland, Magnus; Mo, Birger; Nilsen, Odd Bjarte; Pérez‐Díaz, Juan Ignacio; Chazarra, Manuel; Guisández, Ignacio
• Is Part Of: IET renewable power generation. Volume 11:Issue 13(2017)
• Page Start: 1640
• Page End: 1647
• Publication Date: 2017-09-12
• Subjects: profitability -- power generation economics -- power markets -- hydroelectric power stations -- hydroelectric power -- stochastic programming -- dynamic programming -- pricing; hydropower operational profitability assessment -- energy markets -- reserve markets -- energy capacity prices -- reserve capacity prices -- competitive market setting -- mathematical model -- stochastic dynamic programming -- water value computation -- power plant configurations -- Norwegian hydropower producer; Renewable energy sources -- Periodicals; 333.79405
• DOI: 10.1049/iet-rpg.2017.0407
• Languages: English
• ISSNs: 1752-1416

Abstract

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.