Hydropower operation in a changing environment

In Europe hydropower (HP) plays an important role in the energy transition. However, due to low electricity market prices the profitability of HP is decreased. In this paper, we analyze historic revenue potentials and future market prospects for HP taking into account different paths towards the energy future. We develop a short-term HP operation model which is applied to three generic HP plants. Looking back into the past, the HP revenues on the spot market decreased due to decreasing electricity prices. In theory balancing markets could provide significant additional revenues for HP. Taking into account uncertainties and market characteristics the potential of the balancing markets is reduced. Looking into the future, the global fuel markets and the European Union Emission Trading Scheme (ETS) will be the decision makers for Swiss HP. The balancing market benefits for HP will be reduced in the future if full Swiss HP aims for balancing.