Power system impacts of potential environmental constraints for hydropower in Norway

Abstract New environmental constraints for hydropower improve ecosystems but reduce energy production and flexibility, creating a dilemma between protecting nature and ensuring a sufficient and reliable energy supply. Approximately 88% of Norway’s power comes from hydropower, produced by over 1770 plants. We assess how 285 potential new or revised environmental constraints affect hydropower production and flexibility in the Northern European power system. To do so, we combine a method for estimating environmental flow releases in bypass reaches and stochastic power system optimization. Our results show that reductions in hydropower output due to these constraints are consistent across power system scenarios and two power system models. The reductions amount to 3 TWh yr −1 (2% of Norway’s production), by our estimates. These reductions are primarily driven by flow diversions to bypass river sections. Further, we find that high power prices increase and low prices decrease, reflecting reduced system flexibility. Price increases typically occur in dry spring periods and are linked to activation of season-dependent reservoir restrictions in that period, while price decreases result from higher reservoir volumes entering periods of rain-heavy summer or autumn periods, indirectly linked to restrictions active earlier in the year. In our simulations, we observe that flexibility losses due to environmental constraints to some degree are offset by increased flexible operation of unaffected reservoirs and transmission interconnectors. Finally, our findings suggest that reservoir restrictions may cause spilling, as higher water levels in regulated reservoirs increase the risk of spilling during wet summer or autumn periods. This system-level understanding is crucial for regulatory authorities designing new environmental requirements and revising the terms of hydropower licenses. Our study contributes to informed discussions for balancing hydropower production with local environmental benefits and offers a framework for studying similar constraints in other regions, such as Sweden, North America and European Alpine countries.