The power system has to deal with three main sources of uncertainty: demand uncertainty and load prediction errors, failure of power plants and uncertainty of wind. The growing share of wind and other intermittent generation sources in the European supply increases the uncertainty about power production in day-ahead and longer-term predictions. As EU member states increase the deployment of wind power and other intermittent renewable energy sources, the intraday and balancing market will gain more interest, as additional demand for reserve and response operations is needed. Hence, it becomes relevant to analyse the effect of wind power forecasting errors on intraday prices. A higher forecast error will increase the need of the use of intraday markets to balance out the oversupply or deficit of wind on hourly basis. This oversupply or deficit can be corrected though flexible hydropower plants; however the power price is highly influenced by the fluctuations in the reservoir level (Huisman et. al [2013]). In this paper, we question to what extent hydropower has a stabilizing effect on the impact of wind forecasting errors on NordPool intraday prices. To do so, we examine the hourly imbalance power prices for the Scandinavian market (ELBAS) from 2011 until 2013 with two Markov regime-switching models for periods with low and high hydro reservoir levels during base, peak and off peak hours. Results indicate that under wind forecast error, the use of hydropower capacity in intraday markets is proven to be an effective volatility control mechanism. However, the price stabilizing effect of hydro reservoir levels do not take place in all possible times. Therefore, additional flexible generation capacity is needed to act in times where, from the water management nature, hydropower it is not providing stability.