On the economics of ramping rate restrictions at hydro power plants: Balancing profitability and environmental costs

- We model optimal operations of a hydro plant facing environmental constraints.
- We examine ramping rate restrictions for aquatic ecosystem protection.
- Ramping restrictions reduce profits, but impacts may not be large in certain cases.
- Hydro production may increase under ramping restrictions.
- There are added environmental benefits if thermal power is displaced.

This paper examines the impact of ramping rate restrictions imposed on hydro operations to protect aquatic ecosystems. A dynamic optimization model of the profit maximizing decisions of a hydro operator is solved for various restrictions on water flow, using data for a representative hydro operation in Ontario. Profits are negatively affected, but for a range of restrictions the impact is not large. Ramping restrictions cause a redistribution of hydro production over a given day, which can result in an increase in total hydro power produced. This affects the need for power from other sources with consequent environmental impacts.