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Hydro-power plants and thermal power plants have different investment and operational characteristics that offer the possibilities of economic benefits when planning and operation is closely coordinated.
Any development and operation of an electric power supply system will obviously have its primary objective meeting demand with seasonal and daily variations at lowest possible cost. When evaluating alternatives to meeting this demand in a system expansion plan, intangibles that could not easily be allocated a cost figure, could, however, often enter the picture and may have a major impact on a final decision. Thermal power plants using coal, oil or gas as fuel will emit pollutants that may have a harmful impact on the environment. This applies especially to the release of carbon dioxide which may affect the global climate when concentrations in the atmosphere are increased due to these releases.
Similarly, nuclear power would in many places not be accepted as part of a supply system due to aversion to large accidents, despite the low probability or the perceived problem of disposal of radioactive waste.
Development of hydropower will have local impacts, some of which can be mitigated and attributed to a cost while others like the value of undisturbed nature, evade any cost assessment.
It goes without saying that a comparison of e.g. the consequences of possible climate changes due to carbon dioxide releases from thermal plants, the sociological effects of resettlement of groups of people due to development of hydropower reservoir and the consequences of lack of electric power which is considered to be basis for development is difficult. Despite those shortcomings, comparisons have to be performed to seek an optimal solution within the restrictions and limitations that may exist.
In a pure hydropower based system, power production capability is subject to stochastic variations in annual precipitation and even variable inflow of water to the power plants during the year. To cope with the problem of meeting variable demand, reservoirs have to be established to collect water during periods of high inflow. Reservoirs with hyper annual capacity would have to be built to bridge the variation in precipitation from one year to another.
Normally a hydropower system is energy limited, i.e. energy availability could be limited in years with less than average precipitation. Capacity in terms of MWs (Megawatts) in the other hand, is normally not a limitation since installed capacity is often established on the basis that excess capacity should be available to produce energy during situations of maximum inflow with limited spillage of water. Furthermore, the cost of installing marginal capacity in a hydropower plant is fairly low. Capacity would then in most cases be more than sufficient to meet demand in high load situations.
Features of well-maintained hydropower plants are their high reliability and availability and their ability to respond rapidly to load changes in the system.
A pure thermal system will have to be designed to have sufficient capacity to meet daily and seasonal peak load situations. This implies that there will exist idle capacity in low load periods, e.g. during night hours and weekends.
These basic differences between the two systems indicate that coordination in the planning and operation phases could be beneficial with respect to reducing investment and operational costs in a coordinated system. To establish an optimum solution is, however, a complex task that calls for sophisticated system modelling that takes into account all plant and system characteristics.
Hydropower development can be considered a mature technology although marginal improvements are still being made with respect to effectiveness of electrical and mechanical equipment. Since civil works constitute a major part of the costs of a hydropower plant, much effort has been devoted to developing construction methods that reduce costs and construction time. It is expected that this development will continue and the accompanying cost reduction may have an impact on the planning of a mixed system.
Thermal power is still in rapid development. Technologies to reduce the formation and the emission of harmful pollutants like nitrogen oxides and sulphur dioxide are continuously being improved. Efficiencies are continuously being increased and, especially in the case of gas turbines and combined cycle plants, unit sizes increased with accompanying reductions in operational and investment costs. In a developing system, these improvements will have an impact on allocation of load in the system and thus also on a co-ordinated operation planning of a mixed thermal and hydropower system.
The approach to hydro-thermal co-ordination in expansion planning could be somewhat different in a mixed system and where the possibilities exist to further develop both thermal and hydropower resources.
In such a mixed system or where opportunities exist to connect the two different systems, it appears that economic benefits could be created by locating reserve provisions in the hydropower part of the supply system. The very specific characteristics of a hydropower plant or system is of basic importance when considering operation in a mixed system.