A Proposed Methodology for the Calculation of Variable Production Costs in Hydropower Plants in Ecuador

The wholesale electricity market in Ecuador was the starting point to compose the activities of generation, transmission, and distribution of electricity. Therefore, regulations arise for the economic dispatch of electrical energy, part of those regulations includes the calculation of variable operating costs for the generation plants. The present investigation proposes a methodology for calculating those variable operating costs for hydroelectric plants in Ecuador through a technical and economic analysis of the factors of each component that are related to the production of electrical energy. These are the cost of the use of water, the cost of operation and maintenance, and the cost of auxiliary services. the sum of these components allows for establishing the variable cost of production of hydroelectric plants in Ecuador for varied sizes and technologies.