How optimistic inflow forecasts distort dispatch, prices, and contracts in hydro-dominated power systems: evidence from Brazil
Updated
Updated · arxiv.org · Jul 9
How optimistic inflow forecasts distort dispatch, prices, and contracts in hydro-dominated power systems: evidence from Brazil
1 articles · Updated · arxiv.org · Jul 9
Summary
A new study finds that optimistic inflow forecasts have distorted dispatch, prices, and contracts in Brazil's hydro-dominated power system.
Analyses show that biased forecasts led to lower water values, earlier hydro discharge, postponed thermal generation, and increased price volatility and operating costs.
These distortions have raised reliability risks and reduced hydropower producers' willingness to contract, highlighting the need for improved forecast governance in hydro-heavy markets.