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Hydropower producers face the challenge of scheduling the release of water from reservoirs under uncertain future electricity price and reservoir inflow. Using weekly data from thirteen Norwegian power plants during 2000 2006, the authors find that electricity derivatives prices affect the scheduling decisions significantly. Hence, consistent with recommendations by several theoretical Operations Management studies, financial market information are used in the everyday production planning practice. As expected, production is high at relatively high reservoir levels and is low at high electricity price volatility.
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