The dimensions and significance of the modern power systems prove the necessity to change the principles of energy generation and power supply planning and management. In order to decrease carbon dioxide (𝐶𝑂2) emissions, fight climate change, not being attached to fuel resources, and increase energy security while decreasing dependence on foreign countries, governments of many countries, including Latvia and Turkey, are increasing the share of renewable energy in the electricity production and have taken actions to exploit their domestic resources, which is why renewable energy is an essential and important issue in today’s world and also in the future it may continue to play a globally essential role. Turkey has a large renewable energy potential, which is still in the development process and constitutes about 13.75 % of the European and 1.1 % of the worldwide potential. The operation effectiveness of hydropower plants (20 MW or less) under the market conditions is defined by means of income value. The main purpose of this thesis is to develop optimal short- and long-term planning models for a price taker hydropower producer working in the existing management conditions. Those models have to deal with a huge level of uncertainty. The thesis addresses model applications, optimization techniques, and operational issues. The main goal was devoted to the problem of small-scale hydropower plant (SHPP) control regime optimization. The task of determining SHPP operation conditions is solved striving for maximum profit looking at the cases of known variation of prices at the market environment. An optimization tool known as the Quasi-Newton method for nonlinear optimization tasks is used to plan energy generation under uncertainties. The water flow rates and the electricity market prices are predicted by a tool based on an artificial neural network. The opportunity to apply the Monte-Carlo method for the feasibility study is demonstrated. The cooperative games methodology, namely, the Shapley value, is applied in the solution of SHPPs operation tasks. It gives the coalition participants an opportunity to get additional income. The existing support scheme (the feed-in tariff) is overviewed and the requirement of operational regime regulation is proved by the changes of the market prices. Forecasting and optimization techniques are used in the feasibility study of Saf HPP, which considers both electricity generation and flood control.