Hydropower planning including trade-off between energy and reserve markets

An increase of wind power in the Nordic power system increases the need for regulating power because of variations in wind power production. Hydropower is the most likely power source to balance these fluctuations. This affects the power market and increases the demand for planning tools that are taking the extended need of regulating power into account. A short-term hydropower scheduling model has been developed to manage the trade-off between energy and reserve markets. The model is expressed as a stochastic optimization problem, where the objective function is the sum of sales on the spot market, the regulating market and the value of saved water. Constraints are hydrological balance and balance in produced power and traded power on the market.