Total electricity production in Norway is approx. 130 TWh in an average year, which is almost entirely generated from hydropower. During the winter months (October – April) the seasonal snow cover in many headwater basins may accumulate up to 50% of the total annual runoff.

In the southern part of Norway Statkraft operates a hydropower scheme which provides approx. 16% of the total power production in Norway. During the spring of 2008, the hydrological models indicated very high snow storage in the headwater basins. Snow surveys indicated even higher snow storage than the models simulated. Hence, the long term runoff scenarios indicated very high risk of flooding and spill of water. For energy management purposes long term forecasts for the price of electric power is produced. In the situation with a large surplus of water, the price forecast model indicated a price of electric power very close to zero for a number of weeks during the summer period.

In a recent evaluation of the operation of this hydropower scheme during the last 12 months we see that both runoff forecasts and price forecasts failed seriously, mainly due to erroneous precipitation data and poor representativity of snow surveys. The bad runoff forecasts again led to very bad production planning, and the production was kept at high levels during periods of low prices. Statkraft has estimated at total loss of income from power production during the period April 14 to August 31, primarily due to bad runoff forecasts, to 240 million Nkr (34 million USD).

The paper will discuss aspects of economical value of good hydrological data in hydropower production.