Marginal value (which is the relevant measure) of Hydro is not zero, because the used water has a potential value in the future when it could have been used instead. Hydro plants calculate a monetary value of the water based on a guess on future prices where the water could have been used, in addition to all kind of other smaller factors (like increased maintenance cost of shutting of, and legal requirements for minimal water in the rivers, etc). And then they bid based on this.
Any power-source which can move its production has this feature, independently of renewability.
But if you have some points in time where all the energy is delivered by intermittent power-sources, and there is insufficient power lines to transport this power elsewhere, prices can to 0, and if too much power is offered, the price becomes negative, and power producers has to pay to push in power. This is not just theoretical, it has happened in the European power market. But the equilibrium still exists. And because there are some costs associated with turning them off, it does not actually drop immediately to 0 production at negative prices.
> Marginal value (which is the relevant measure) of Hydro is not zero, because the used water has a potential value in the future when it could have been used instead.
That only describe a small fraction of hydro power: the majority of hydro in the world is “Run-of-the-river”, which means it has little storage capacity if any.
> Any power-source which can move its production has this feature, independently of renewability.
Not really. For instance, Nuclear gives you the illusion of marginal price because you can think of the cost of the uranium rods, which will be consumed faster or slower depending on your supply, but in practice your maintenance (which are also when the fuel replacement happens) are planned years in advance and are mostly paced by a mix regulatory constraints and staffing needs (your maintenance experts are in limited supply in the country, and you want to keep them busy, so you make sure the maintenance of your park is well ordered with minimal overlaps. Source: my wife makes the long terms plan nuclear maintenance at EDF, here in France).
> This is not just theoretical, it has happened in the European power market.
I know, but this has nothing to do with the question, which is in fact theoretical (“equilibrium prices” are a purely theoretical concept).
> But the equilibrium still exists.
Nope, not in the meaning of this word in the classical model (i.e. the intersection of the marginal cost curve and the demand curve).
What exists is a market price, but it's not the “equilibrium price”, and it cannot be because it doesn't exist in this setting.
Any power-source which can move its production has this feature, independently of renewability.
But if you have some points in time where all the energy is delivered by intermittent power-sources, and there is insufficient power lines to transport this power elsewhere, prices can to 0, and if too much power is offered, the price becomes negative, and power producers has to pay to push in power. This is not just theoretical, it has happened in the European power market. But the equilibrium still exists. And because there are some costs associated with turning them off, it does not actually drop immediately to 0 production at negative prices.