Hydro energy represents a priority in the energy policy of Portugal, with the aim of decreasing the dependence on fossil fuels. In this context, optimal hydro scheduling acquires added significance in moving towards a sustainable environment. A mixed-integer nonlinear programming approach is considered to enable optimal hydro scheduling for the short-term time horizon, including the effect of head on power production, start-up costs related to the units, multiple regions of operation, and constraints on discharge variation. As new contributions to the field, market uncertainty is introduced in the model via price scenarios and risk management is included using Conditional Value-at-Risk to limit profit volatility. Moreover, plant scheduling and pool offering by the hydro power producer are simultaneously considered to solve a realistic cascaded hydro system. (C) 2011 Elsevier Ltd. All rights reserved.