The Economic Value of Hydrometeorological Information in the Planning of Large-Scale Hydropower System Operations

This study investigated the impact of hydrometeorological data and forecast information availability on improving hydropower production and storage management in reservoir systems, and the associated costs of data production. The methodological approach integrated stochastic optimization and rolling horizon optimization with forecasts to address both short- and long-term operating targets when determining daily reservoir release decisions over the planning horizon. Three hydrometeorological data scenarios were organized to assess the quantitative benefits and to trace the costs, thereby establishing benefit–cost relationships. The large-scale hydropower system in the Paraná River Basin, Brazil, was used as case study. The results show that improved hydrometeorological data and information allows for better water storage management across time, which increases energy production and value. Up to a 15% increase in hydropower production over a 5-year simulation period was obtained, and the incremental benefits for the modeled system were 2 orders of magnitude greater than the cost of producing the hydrometeorological information. Specifically, every $1 invested in incremental hydrometeorological information generated a return of $775 when subseasonal forecasts replaced stochastic ensembles for reservoir storage management. However, further improvement in the forecast system would be limited to an additional 2.3% maximum gains in energy, indicating decreasing incremental benefits. Finally, the methods and results are helpful to justify resource commitment necessary to data gathering and forecast systems that will allow reservoir and power operations to be continuously improved and adapted in the future.