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Assessing the opportunity costs of hydropower reserve providers

What are appropriate bids for the hydropower reserve?

Hydropower plant

Client

Swiss Electricity Commission (ElCom)

Project period

2022

Related expertise

Regulation, Valuation, Energy, Data Science

Team

Urs Trinkner, Nicolas Eschenbaum, Romain de Luze

Contact

Urs Trinkner

Project description

For the first-time implementation of the Swiss hydropower reserve, water storage plant operators were asked to hand in competitive bids. Swiss Economics supported the Swiss Electricity Commission ElCom together with FEN of ETHZ. We quantified which total costs can be explained by the price expectations on the electricity market and the auction behavior of the players.

Methods

  • Estimation of 2023 hourly day-ahead prices (HPFC) at the time of the suppliers' closing date
  • Determination of optimal power plant deployment under uncertainty for different types of hydropower plants
  • Calculation of the opportunity costs of different hydropower plants
  • Analysis of the possible auction behavior of the suppliers
  • Estimation of total costs for different call volumes
  • Assessment of the assumptions made in the individual modelling steps
  • Recommendations to ElCom

Publication

 

 

 

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