Valuing hydrological forecasts for a pumped storage assisted hydro facility

摘要: Summary This paper estimates the value of a perfectly accurate short-term hydrological forecast to operator hydro electricity generating facility which can sell its power at time varying but predictable prices. The expected less will be smaller. We assume simple random model for water inflows and that costs operating facility, including charges, same whether or not has inflow forecasts. Thus, improvement in from better prediction results increased ability using high is therefore difference between sales operated over some horizon with perfect forecast, similar which, though governed by model, cannot forecast. shows an increasing function process variance quantifies how much this increases process. Because lifetime hydroelectric facilities long, small increase observed here lead profitability hydropower investments.