New environmental restrictions - aggregate effects on the Norwegian power system

Over 93% of Norway's power production stems from hydropower. The Nordic power market is constantly transforming, current main drivers include climate change effects on hydrology, an increase of variable renewable energy production, increasing interconnector capacity, and revision of concession terms for hydropower plants. A common plant layout is comprised of a reservoir and an underground penstock leading to a downstream located hydropower plant (HPP); in many cases several reservoirs and power plants are interconnected in complex systems. Consequently, the natural hydrology of many lakes and rivers are heavily impacted by hydropower operation.

Hydropower operation is legally regulated by concessions that include regulations to limit negative environmental and societal impacts. More than 400 HPPs currently undergo a revision of terms of their concessions, which will likely impact hydropower operations and subsequently the Nordic power market. Updated or new environmental restrictions of three main types may have significant impact: 1) r 2) requirements for minimum discharge and restricted flow variation downstream of power plants and 3) filling requirements for hydropower reservoirs for the summer season. The joint effect likely has impacts on the power-balance and the hydropower system’s flexibility at multiple timescales from seconds to seasons.

The objective of this cross-disciplinary study was to investigate the impacts of an ensemble of updated or new environmental restrictions on hydropower operations and on the Norwegian power market in the future. We developed a nationwide framework to quantify probable future environmental restrictions. . Additionally, a market model dataset for a 2030 scenario was created and input data adjusted, e.g. energy mix development in grid-coupled regions such as central Europe. Implemented in a state-of-the-art market optimization model, we modelled a range of restriction scenarios for the year 2030,

We analyzed resulting future price scenarios. Preliminary results show an increase in average yearly production loss in the range of 5 TWh (or 3% of total hydropower production) due to new environmental restrictions. Modelled market response is an increase of average spot-price by about 0.8 €/MWh for all regions of Norway. Norwegian export of electricity to other countries is reduced. Another effect is that reservoir filling levels are typically higher than in the current situation, likely due to filling restrictions and model tendencies to avoid risk of violating reservoir filling restrictions, as well as increased inflow during winter.