Hydroelectric power plays an important role in Australia’s National Electricity Market (NEM), responsible for about 8% of the annual energy supply. With the increasing adoption of variable renewables, hydropower becomes even more important (due to its high flexibility in operation) in securing a reliable power supply. However, according to the IPCC, global warming will pose a serious risk to the hydropower sector (by affecting the hydrological regimes), particularly in regions where hydropower constitutes a significant portion of the generation mix. 

To mitigate the potential impact of the reduced hydro availability, this paper conducted a 100% power system abatement planning study considering different levels of climate-driven streamflow depletion to hydropower reservoirs. Particularly, streamflow depletion of -13% and -32% to the historical baseline case in 2017-2018 were modelled. These percentages of runoff depletion were chosen from the feasibility study of the Snowy 2.0 project.  

We conducted scenario-based modelling using our in-house model, which simultaneously optimises the transition pathways for the NEM by minimising the total system cost for electricity generation, transmission, and storage from 2020 to 2050. The model explores different generation mix that satisfies specified demand projections and emission abatement targets, subject to system inertia constraints, unit commitment, and economic dispatch with optimal power flows. 

The modelling results show that the impact of reducing the output of electricity from the hydro system is initially an increase in the use of gas-fired generators, but also a significant decrease in the use of coal-fired generators. The increase in gas usage is close to 15 TWh per year. As well as more wind power is being dispatched, the model also curtails wind and solar significantly more often, as the loss of the flexibility from hydro makes it more difficult for the system to absorb the variability in the non-dispatchable renewables.