There is environmental, societal and also economic pressure to increase the share of renewable energy sources in covering energy demand. However, the stochastic and non-dispatchable nature of the two main such sources (photovoltaics and wind generation) complicates their integration into the power system. The operation mode of the run-of-river power plant with pondage that is considered here has potential to smooth electricity generation from photovoltaics, whilst also maintaining the hydropower capacity factor and increasing water retention - an important aspect when a decision-maker has to make a trade-off between power generation and, for example, irrigation. This paper presents the theoretical background to our research, introduces a discrete mathematical simulation and optimization model and provides a detailed analysis of the obtained results and the operation of the entire system. We also highlight the impact on the capacity factor of hydropower as well as addressing the potential need to install more than one water turbine to ensure greater flexibility of hydropower and efficient utilization of water resources. The optimization results of the analyzed case study show that for an observed average flow rate of 1.3 m(3)/s and annual irradiation of 1050 kWh/m(2) a 176-kW water turbine and pondage capacity of 1.36 MWh is sufficient to smooth the power generation of a 687-kW PV installation while also satisfying constraints imposed on reliability and performance.