Representing Hourly Energy Prices in a Large-Scale Monthly Water System Model

Abstract

Water system management models represent different purposes, such as water supply, flood control, recreation, and hydropower. When building large-scale system models to represent these diverse objectives, their most appropriate time steps for each purpose often do not coincide. A monthly time step is usually sufficient for water supply modeling, but it can be too coarse for flood control, hydropower, and energy operations, where hourly time steps are preferred. Large-scale water management and planning models mostly employ monthly time steps, but using monthly average energy prices underestimates hydropower revenue and overestimates pumping energy cost because these plants tend to operate during times with above- or below-average energy prices within any month. The approach developed here uses hourly varying prices depending on the percent of monthly operating hours. This paper examines an approach that approximately incorporates hourly energy price variations for hydropower and pumping into large-scale monthly time-step water system model operations without affecting water delivery results. Results from including hourly varying energy prices in a large-scale monthly water supply model of California (CALVIN) are presented. CALVIN is a hydroeconomic linear programming optimization model that allocates water to agricultural and urban users with an objective to minimize total scarcity costs, operating costs, and hydropower revenue loss. Thirteen hydropower plants are modeled with hourly varying prices, and their revenue increased by 25 to 58% compared to revenue calculated with monthly average constant energy prices. Hydropower revenue improvements are greater in critically dry years. For pumping plants modeled with hourly varying prices, the energy use cost decreased by 10 to 59%. This study improves system representation and results for large-scale modeling.