The Production-Profitability Model designed for Hydropower plants with System Dynamics Approach

Iran's electricity industry are looking for better ways and more efficient in generation, transmission and distribution of electrical power in recent years. The industry rules have changed to become more competitive. With uncertainty in market price, water inflow, the beneficiary's behavior, access to information and risk increasing, the profit maximization has been more difficult in electricity market for hydroelectric energy producers. In this situation, pursue a decision-making for optimum operating of power plants is one of the main producers concerns. For this purpose, time series data on average monthly during 2005–2015 was used and profit is forecasted for twenty-four months. For this study, energy data from Karun river hydropower plant karun1 was used. Firstly, Gómes-Maravall model was used to predict of electricity price and river inflow. Then, using an ARIMA model was estimated for operating and maintenance cost in the hydropower plant. In this research to study of hydropower plant profitability was used the system dynamics approach and multiple scenarios like: climate change and penalty costs scenarios.