Abstract :
The paper presents a procedure for selecting the installed capacities of several interdependent power plants to be built in series on a river, taking into account the stochasticity of the river flows. It is shown that the capacity of a power plant should be increased until the marginal construction cost exceeds the expected marginal benefit from the firm and secondary power produced. The expected benefit is determined by performing Monte Carlo simulations of the equipment operation. The operating policy used in the simulation is determined by straightforward dynamic programming if n, the number of reservoirs, is less than or equal to four. Otherwise, the operating problem is decomposed into n-i problems of two variables each, which are solved by dynamic programming. Numerical results are presented.
