Management strategies for run-of-river hydropower plants: an optimal switching approach

Abstract

AbstractThe mathematical theory for optimal switching is by now relatively well developed, but the number of concrete applications of this theoretical framework remains few. In this paper, we bridge parts of this gap by applying optimal switching theory to a conceptual production planning problem related to hydropower. In particular, we study two examples of small run-of-river hydropower plants and provide an outline of how optimal switching can be used to create fully automatic production schemes for these. Along the way, we create a new model for random flow of water based on stochastic differential equations and fit this model to historical data. We benchmark the performance of our model using actual flow data from a small river in Sweden and find that our production scheme lies close to the optimal, within 2 and 5 %, respectively, in a long term investigation of the two plants considered.