An integrated framework for the optimal expansion of hydro-dependent power systems under water-resource uncertainty

Hydro-dependent power systems must plan expansion under water-resource uncertainty intensified by climate variability, which threatens reliability and raises planning risk. This study presents an integrated framework for long-term optimization of the expansion of generation and transmission assets in such systems while considering water-resource uncertainty. The framework combines transmission grid reconductoring strategies with hydroelectric reservoir operation modeling. To quantify hydrological uncertainty, Monte Carlo simulations calibrated on precipitation–inflow–generation relationships generate monthly hydropower availability factors. The approach is applied to the case study of the Ecuadorian power system, where hydropower accounts for over 70% of electricity generation, using a 24-bus equivalent for 2025–2040 with monthly resolution, and is evaluated under three future scenarios and 19,200 simulations. Results show that while transmission reconductoring enhances network capacity, its overall cost impact is marginal relative to the substantial investments required for new generation. Among the scenarios, the full renewable expansion (FRE) strategy proves most cost-effective, yielding the lowest total system cost and Power Not Served (PNS) over the planning horizon, while maintaining existing thermal capacity as monthly backup. However, under the assumed low carbon price, FRE produces higher CO2 emissions than BAU or RGE, as legacy thermal units economically supply residual demand and dry-month energy. This outcome suggests that stronger carbon pricing would be required to align adequacy with deeper system decarbonization.