Environmental cost of hydropower regulation, a case study in Iijoki river basin, Finland

Abstract

Regulation of river flow in hydropower production has received a lot of backlash from environmentalists. Hydropower regulation has been linked to hydrological alteration, destruction of habitats, and loss of biodiversity in river ecosystems. Despite these environmental bottlenecks, hydropower remains an important source of power supply flexibility in the proposed all-renewable energy grid of the energy transition. It’s, therefore, prudent to find solutions that improve the relationship between hydropower production and river ecosystem protection.

While some environmentalists believe that river ecosystem adaptation and modification can inject environmental sanity into hydropower production, others subscribe to the school of thought that the ultimate solution is to produce power with the river’s natural flow (without regulation). The Iijoki River basin in North Ostrobothnia, Finland, has a cascade of five hydropower plants. This research aims to confirm how much revenue will be lost/gained if Iijoki’s hydropower cascade operators decide to operate with the river's natural flow. To achieve this, a natural and optimized flow model was developed in Python to replicate the operational strategies of the hydropower company. The natural flow model replicates power production with the river's natural flow, while the optimized flow model replicates an electricity-price-driven power production optimization strategy. Results from the study confirmed that the annual environmental cost of hydropower regulation is 3.98 million euros. Energy generation with the river's natural flow leads to a yearly loss of 52,180.18 MWh of flexible energy from the grid. The trade-off for these losses in energy and revenue is the absence of hydrological alterations, which corresponds to an increase in the sustainability of hydropower production. Findings from this study can feed into policy on integrated water resource management for Finnish basins.