| dc.description.abstract | From the perspective of owners of hydropower assets, the rapidly transforming power sector gives rise to complex large-scale stochastic optimization problems that need to be formalized and solved. Various aspects are considered in the papers of this thesis, and each paper contributes with novel insights. We first demonstrate how to coordinate the planning of a portfolio of possible performance-enhancing activities for deteriorating production assets under price uncertainty, and that a real options perspective on maintenance activities is valuable.
Our analysis highlights the importance of having several performance-enhancing activities under consideration when prices are uncertain. We further study whether the seasonal production schedule of a hydropower producer be improved by considering the co-dynamics between the level of available resources and prices in electricity markets dominated by hydropower. We find that producers underestimate their marginal water value if the negative relationship between prices and resource availability is ignored, which means that current water has a higher expected value in the future if co-movements are properly accounted for.
Nevertheless, the potential gain of considering co-movements when establishing the operational policy is modest with 0.17% improvement in case study. Next, we examine the value of short-term hydropower flexibility and how does it affect long-term capacity installments. We assess the performance of operational policies obtained from a heuristic that allows a straightforward integration of seasonal planning and intraweek scheduling and demonstrate that larger within-week price variations accelerate investments and tend to increase capacity installments. Finally, we study how to make decisions regarding plant renewal and capacity investment under limited long-term information about market prices. The analysis and results provide valuable insights and can be implemented and used by owners of hydropower assets. | en_US |
