The relationship between prices and inflow in hydroelectric scheduling

We analyze the relationship between the system price in the Nordic electricity market and inflow to three different Norwegian power producers. Price and inflow are the main drivers of uncertainty in the hydroelectric scheduling problem and in principle their relationship needs to be captured for ensuring a high quality in the planning process. Our experiments indicate that regarding the value of revenues, the influence of the relationship between price and inflow is relatively minor. For the three power plants we studied, the difference in expected revenues from dependent and independent modeling of price and inflow is from 2-4%, on a two-year horizon.