The capacity benefit of hydro
Compare the production cost of the system without hydro, with base loading the hydro around-the-clock and with hydro peak-load shaving at full capacity.
Without the hydro the production cost is C(2,000) x 8h + C(600) x 8h x 2 = {0.1 x (2,000)2 - 100 x 2,000 + 85,000} x 8h + {0.1 x (600)2 - 100 x 600 + 85,000} x 8h x 2 = 285 k$/h x 8h + 61 k$/h x 16h = 2.28 M$ + 0.976 M$ = 3.256 M$.