Reservoir Hydropower Operations: Valuing Flexibility

In this talk we provide insights into how storage flexibility impacts the expected revenue of hydropower plants. Using daily data going back ten years from 14 different hydropower plants with significant seasonal reservoir capacity, and who operate in a well-functioning market, we conduct an empirical analysis of the different factors affect the ability of hydropower producers to exploit high prices. Storage flexibility on average accounts for 22% of actual revenues, ranging from 0 to 40%.