Hydropower represents an interesting technology: affordable, renewable, and flexible. However, it must cope with climate changes and new energy policies that jeopardize its future. A smooth transition to sustainability requires decision makers to assess the future perspectives of hydropower: about its future revenue and related uncertainty. This investigation requires a multidisciplinary approach as both streamflow and energy mix will evolve. We simulated future streamflow based on eight climate scenarios using a semi-distributed hydrological model for our case study, the Tremorgio hydropower plant located in southern Switzerland. Next, using a hydropower management model we generated income according to these streamflows and twenty-eight electricity price scenarios. Our results indicate that climate change will modify the seasonality of inflows and volumes exploitable for hydropower generation. However, adaptive strategies in the management of reservoirs could minimize revenue losses/maximize revenue gains. In addition, most market scenarios project an increase in revenues, except in the case of high wind and solar energy penetration. Markets do not provide the right incentive, since the deployment of intermittent energy would benefit from more flexible hydropower.

Climate change has repercussions on the management of water resources. Particularly, changes in precipitation and temperature impact hydropower generation and revenue by affecting seasonal electricity prices and streamflow. This issue exemplifies the impact of climate change on the water-energy-nexus, which has raised serious concern. This paper investigates the impact of climate change on hydropower with a multidisciplinary approach. A holistic perspective should be favored as the issue is complex, consequently, we chose to investigate a specific case study in Italy. It allows grasping the details, which matters in mountainous area. We integrated a hydrological model, hydropower management model, nine climate scenarios, and five electricity scenarios for a specific storage hydropower plant. Independently from the scenarios, the results show a glacier volume shrinkage upward of 40% by 2031 and minimum of 50% by 2046. The reservoir mitigates losses of revenue that reach 8% in the worst case, however, are lower compared with run-of-the-river configuration. Changes in price seasonality amplitude also determine modifications in revenues, while temporal shifts appear to be ineffective. For run-of-the-river, any variation in hydrological cycle immediately translates into revenue. Comparing the results of all future scenarios with the base scenario, it can be concluded that an increase in temperature will slightly improve the performances of hydropower.