Assessment of the economic impact of environmental constraints on annual hydropower plant operation

Environmental constraints imposed on hydropower operation are becoming increasingly restrictive. These constraints may reduce the operational flexibility of a hydro plant and therefore its revenue. The objective of this paper is to assess the economic impact of minimum environmental flows and maximum ramping rates on the annual operation of a hydropower plant. For this purpose, a revenue-driven annual optimization model based on discrete dynamic programming and mixed integer linear programming is used. The model considers hourly water inflows and energy prices, limits on reservoir level and water discharge, power generation dependence on the available head, wear and tear costs of hydro units caused by power variations, start-up and shut-down costs of hydro units, and the above-mentioned environmental constraints. In order to show the applicability of the proposed methodology, it is used in a real hydropower plant under five different water year types and 56 distinct combinations of the considered environmental constraints. The results indicate that the revenues of the hydropower plant are very sensitive to the presence and magnitudes of these constraints. Annual losses increase quadratically as a function of the maximum ramping rates and almost linearly as a function of the minimum environmental flows. •The effect of environmental constraints on the annual income of a hydro plant has been assessed.•A revenue-driven optimization model has been used for this purpose.•The model is based on discrete dynamic programming and mixed integer linear programming.•Different water year types and magnitudes of the environmental constraints have been studied.•Results show that annual income is very sensitive to the presence and magnitude of these constraints.