Hydropower Economics (eBook)

Preface 6
Contents 8
List of Common Variables 11
Chapter 1. Introduction 13
Background 13
The purpose of this book 16
Electricity 20
Hydropower 25
Environmental concerns 30
Chapter 2. Water as a Natural Resource 31
The basic hydropower model 31
Water as a non-renewable resource: Hotelling revisited 35
Several user groups 39
Chapter 3. Hydropower with Constraints 44
The variation of prices 44
Constraints in hydropower modelling 46
Optimal management with reservoir constraint 48
The bathtub diagram for two periods 53
The generation of price changes 56
Determining quantities 72
Chapter 4. Multiple Producers 78
Reservoir constraints 78
Hveding’s conjecture 82
Output constraints 88
Hydraulically coupled hydropower 96
Environmental restrictions 99
Chapter 5. Mix of Thermal and Hydropower Plants 105
Thermal plants 105
Social solution of mixed hydro and thermal capacity 114
Introducing a reservoir constraint 119
Optimal mix of hydro and thermal plants 121
A dynamic thermal problem 126
Chapter 6. Trade 131
Unconstrained trade 131
Constraints on trade 137
Trade between countries hydro and thermal 147
Chapter 7. Transmission 160
Engineering approach to transmission in economics 161
Modelling transmission for simple cases 165
A general transmission model 178
Network impact on utilisation of hydropower 186
Chapter 8. Market Power 189
Monopoly 190
Monopoly and trade 195
Monopoly with reservoir constraints 201
Monopoly with trade and reservoir constraints 207
Monopoly with hydro and thermal plants 210
Dominant firm with a competitive fringe 213
Oligopolistic markets 219
Chapter 9. Uncertainty 220
The general problem 220
A simplified two-period approach 222
Generalisation to T periods 232
Hydro and thermal 238
Monopoly revisited 241
Concluding comments 244
Chapter 10. Summary and Conclusions 246
Main drivers of price change 246
Competitive electricity markets 249
Market designs 252
Investments 254
References 257
Author Index 262
Subject Index 263