Application of Hedging Rules in the Operation of Hydro - Power Reservoirs

Abstract

The application of hedging rules in reservoir operation has been established as one of the important advances in the field of reservoir operation studies during the past three decades. Hedging rules distribute the deficits over a longer duration to minimize the impact of deficits. Thus, hedging provides the insurance of highvalued water uses, where reservoirs experience uncertain inflows. Formulating different forms of hedging rules and proposing appropriate objective functions that adequately describe the trade-off among the operational performance indicators have been attempted for water supply and irrigation release from reservoirs. Research on hedging rule-based operation of reservoirs for hydro-power generation has not yet gained sufficient attention, probably due to its complexity due to non-linearity. In this study, hedging rules are formulated for Indira Sagar reservoir for hydro-power generation. Discrete phased hedging rule and twopoint linear hedging rule are developed and demonstrated in this research. While the two-point linear hedging rule is one of the simple hedging rules, the discrete phased hedging rule is a more realistic rule as it will facilitate better planning of alternative sources of power generation or rationing. The results indicate the advantages of applying the hedging rules over the standard operating policy.