The general objective of the energy model described in this paper is to provide a powerful analysis tool to evaluate the market value of Swiss hydropower plants and to quantify the future value of hydropower on the background of a liberalised European electricity market considering various scenarios. The energy system analysis model PERSEUS-HYDRO is a technology-based modelling approach, employing linear programming algorithms with a focus on hydropower. Due to its detailed representation of the real energy supply system, including the specific techno-economic characteristics and constraints of this sector, the model permits an in-depth analysis of the interrelations between capacity development, power exchange volumes, plant dispatching, and price information. In order to assess the influence of alternative assumptions on future technological investment options, the model parameters include the projected techno-economic characteristic of future energy conversion technologies.