Water as a Natural Resource
Some studies of hydropower at a high level of aggregation disregard the storage process and specify directly the available water within, e.g., a yearly weather cycle. The assumptions are then that there is no spill of water or binding upper reservoir constraint, and no emptying of the reservoir until the terminal period. The modelling can then be simplified by disregarding the water-accumulation relation (1.4). Another way for this specification to make sense in our framework would be for all the water to be present in the first period. The time profile of inflows should be such that the bulk of inflow comes in one period and then there is a natural seasonal precipitation cycle with little inflow until one year later. The snow, melting during a few spring and summer weeks, fills the reservoirs with about two thirds of the yearly total in Norway. This is illustrated in Figure 1.4 in Chapter 1. The inflow is low in other periods except for autumn rains. However, there are huge variations up to ± 30% from year to year in the pattern of inflow.
KeywordsUser Group Discount Factor Marginal Utility Demand Curve Shadow Price
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