Should environmental constraints be considered in linear programming based water value calculators?

Abstract

We evaluate the practical usefulness of incorporating maximum ramping rates and minimum environmental flows into a linear programming based water value calculator for hydropower plants that participate in the day-ahead electricity market. The methodology consists of three steps: first computing the water value once with and once without environmental constraints, then simulating the plant operations using each water value, and finally comparing the simulation profits. A set of nine representative hydropower plants formed by combinations of three real locations (in Colombia, Norway and Spain) and three turbine configurations (from one to three Francis units) are individually analyzed. Each plant is simulated in two synthetic 10-year long series subject to fifteen combinations of maximum ramping rates and minimum flows with the two above-mentioned water values, totaling 540 simulations. The results indicate that incorporating the analyzed environmental constraints into a linear programming based water value calculator can be significantly profitable only when the hydropower plants have only one or at most two turbines.