Hydropower Operation in a Changing Market
Environment – A Swiss Case Study
Moritz Schillinger,
Hannes Weigt, Michael Barry and René Schumann, available here
Abstract:
Hydropower (HP) is expected to play an important role
in the European energy transition by providing back-up
and storage capacity as well as flexibility for
intermittent renewable energies. However, due to low
electricity market prices the profitability of HP
decreased in recent years. In this paper, we analyze
historic revenue potentials and future market
prospects for HP taking into account different
development paths. Using a short-term HP operation
model to capture market opportunities as well as
technical and natural constraints of HP plants, we
model three representative Swiss HP plants. The
results indicate that in the last years, balancing
markets could have provided significant additional
revenues for HP plants. However, accounting for
uncertainties and market characteristics, the
potential of balancing markets is reduced but
cross-market optimization is still beneficial. Looking
into the future, market price prospects for the coming
decade are low to modest. Global fuel markets and the
European Union Emissions Trading System (ETS) will be
the main drivers for decisions for Swiss HP. The
revenue potential from balancing markets will be
reduced significantly in the future if all Swiss HP
operators aim for balancing. While optimized operation
across markets helps Swiss HP to increase its
revenues, it is limited in scale.
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Sensitivity of energy
system investments to policy regulation changes:
Application of the blue sky catastrophe
Anton Bondarev and
Hannes Weigt, available
here
Abstract:
In this paper we argue, that the interaction of
technology and economic policy regulations in the
energy sector may be described by the so-called
slow-fast class of dynamical systems. It is known that
such systems may exhibit the blue sky catastrophe, a
special type of bifurcation. Application of this
result allows us to argue that caution is needed when
updating economic policies in the energy sector to
avoid the onset of catastrophic developments in the
system's transformation, when energy system dynamics
becomes unresponsive to policy updates.
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