XXX is a utility company producing hydro-electric power. It is jointly owned by the companies YYY, ZZZ and VVV. The owners use their share of the power produced, or sell it on the open market. A number of issues re. the trade-off between a technically and an economically optimal utilisation of the water resource has been brought to our attention. There are two aspects to this issue: (i) managing the water inventory most effectively and (ii) timing production to take advantage of large price fluctuations and the requirements of the owners. These issues are investigated using a system dynamics model that consist of a technical component and an economic component.
This paper presents a system dynamics model constituting the technical component of the XXX company. It includes the tightly interconnected water reservoirs, the associated pipelines, a pumping station, the power stations, and the control systems. There is a high degree of complexity involved in the operation of the company including issues such as water supply estimation, reservoir depletion rate optimisation, effective water pressure maximisation (depending on the water supply to the turbines), and turbine effect maximisation, -- all under the constraints imposed by the owners and the electricity market.
The model has been validated using a large amount of data sampled regularly over the last few years. It can be generalised and applied to other hydro-electric power plants and can serve as a component in an interactive learning environment for the training of utility managers and stake holders.