Maximizing the value of thermally integrated hydroelectric generating facilities

This paper presents a demonstration of a phenomenon known as hydro-shifting, which relates to the provision of two sources of electric power to customers. The extent that these resources are used in each period is shown to depend partly on the time of day in which the power is provided. Although the dispatcher could combine thermal resales with hydro power in equal proportions for its customers in both periods, a rationalization is presented that justifies the withholding of some water until the peak period, with the balance of off-peak demand satisfied in larger proportions by resales of thermal power. Value is optimized for electrical generation, and environmental externalities are incorporated as minimum or maximum flow limitations. This paper also presents evidence that the optimal degree of hydro-shifting depends on the size of the reservoir adjacent to the dam, with this shifting behavior being more pronounced for larger reservoirs.