An important conclusion from the literature on hydropower is that if there are no other constraints than the available water reservoirs for a year, and operating costs are ignored, the competitive (and socially optimal) outcome is characterized by the (present value) price being constant through...

An important conclusion from the literature on hydropower is that if there are no other constraints than the available water reservoirs for a year, and operating costs are ignored, the competitive (and socially optimal) outcome is characterized by the (present value) price being constant through...

The key question in hydropower production is the time pattern of the use of the water in the reservoir. The water used to produce electricity today can alternatively be used tomorrow. The analysis of the operation of hydropower is therefore essentially a dynamic one. The paper introduces some...