Do we have to choose between the ecosystems and the energy transition? Environmental trade-offs with operation of Norwegian hydropower

Abstract

In Norway, environmental constraints applying to hydropower may become stricter to safeguard local ecosystems. At the same time, Norwegian hydropower can facilitate the transition to more renewable energy within Northern Europe. This study quantifies the aggregated impact of environmental constraints on the Norwegian power system and its interactions with neighbouring countries up to 2050. Requirements for augmented protection of the local environment affect hydropower operation and, hence, the power system. For example, a loss of 3% in production combined with a 4% reduction in average hourly ramp for the Norwegian hydropower fleet results in our case study in up to a 14% increase in average Norwegian power prices and 4% increase in congestion on transmission lines towards neighbouring countries. The abundance of cheap renewable energy can mitigate price augmentation, but losses in flexibility can be difficult to recover completely within the existing hydropower infrastructure. While prioritizing hydropower plants with vulnerable surrounding ecosystems for adding new environmental targets helps limit their constraining effect on the power system, it also leads to an economic disparity between individual plants; stricter environmental constraints on parts of the hydropower fleet increase the revenues of the unaffected part (by up to 10% in our case study).