Abstract: A double-layer optimal allocation method for power-to-gas capacity of hydropower station with medium and long-term transactions is proposed to improve the flexibility of hydropower station regulation and increase the proportion of wind power consumption in medium- and long-term scheduling. Based on the idea of wind power quality segmentation, the wind power output is divided into a certain part and an uncertain part corresponding to the upper-level model and the lower-level model. A medium long-term bidding model with the goal of minimizing the power purchase cost is established in the upper-level model to optimize the bidding prices for the wind, hydropower, and thermal power suppliers. The environmental costs and the appeal of power generators are taken into account, an optimal allocation model for power-to-gas conversion in hydropower stations based on contract transfer transaction mechanism is proposed in the lower-level model for the contract transfer transaction, and the positive effects of power-to-gas energy conversion, hydropower abandonment and wind power consumption by large-scale energy storage are analyzed. Finally, the modified IEEE 30 system is adopted to verify the results.The simulations show that the proposed model can be adopted to effectively improve the wind power consumption capacity and the flexibility of hydropower regulation in the medium long-term scheduling.