So far the transmission system has not been modelled, although it is a physical necessity to have a network. The main reason was that the existence of a network does not play an explicit role for the dynamics of the hydropower system. Assuming network capacities to be given, the flow of electricity is continuous and does not influence the nature of the dynamic equations driving an optimal plan over periods. However, network effects may influence the quantitative solutions in a way that is different for a hydropower system than systems with, e.g., thermal generation. It may also be interesting to consider transmission regarding the spatial structure of pricing of electricity based on hydro generation, since hydro can be almost instantaneously switched on and off with modest costs. Hydropower may therefore be the most suitable generating technology for applying spatial pricing. One key question is whether transmission as a service should be priced separately by a social planner, and whether such transmission costs may influence the time profiles of utilising reservoirs. There is also the issue of impact of limited capacities on network lines and the price structure. We will investigate changes in our model analyses implied by networks, and especially look for impacts on use of hydropower.
KeywordsDemand Curve Shadow Price Generate Node Shadow Prex Spatial Price
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