4D3: How do hydropower operations change to facilitate higher variable renewable contribution to the power grid?
July 14, 2022
Market Trends and Asset Strategies
Hydropower generation may play an increasingly larger role in the power grid under increasing contribution from variable renewable energy (VRE) sources such as wind and solar. Because of the variability of solar and wind, technologies like hydropower that can supply flexibility to the power grid are paramount. Understanding how hydropower dispatch may change in the future is important to inform water resource planning, considering the various non-power uses of engineered dams. Grid modelling tools allow planners to understand the issues related to VRE integration and resource planning. Production cost models such as PLEXOS co-optimize the energy requirement and reserve products. Using PLEXOS, we explore hydropower operation across future scenarios, and regions for different hydrology years to understand the role of hydropower in a changing power grid. We analyze hydropower operation across various VRE scenarios, along with the net load, local marginal prices, plant revenue, and hydro power plant capacity factors. Study results indicate that the hydropower generation follows the net load and provides flexibility services required to compensate for VRE generation. Hydropower revenue from providing energy varies across grid scenarios since local marginal prices depend on the VRE levels and fossil fuel prices. The results also indicate a possibility of higher hydropower revenue by providing various grid services. Further, high VRE scenarios require higher ramping from hydropower, and these plants mostly operate in very high or very low-capacity factors which is directly linked to the water releases from the reservoirs. The study results can be used as a basis to understand the details of hydropower plant operation under various grid scenarios, considering environmental constraints.