<p>Increasing shares of variable renewable electricity sources in the energy system extend the demand on flexibility providers, such as hydropower. More short-term regulation of hydropower plants adversely affects river ecosystems, particularly in cascades. Implementing environmental flow constraints is a well-recognised method to ensure qualitative habitat improvements. The study aims to evaluate the effects of flow constraints by modelling a national-scale energy system with a hydro cascade enhanced with hydrological details for hydropower operations. The open-source modelling framework Backbone is employed for the techno-economic simulation. Studied scenarios cover different years, a range of flow constraints, and options for additional flexibility investments to mitigate the economic impact of flow constraints. Results indicate that flow constraints reduce revenue but mitigate sub-daily ramping. In scenarios with highly volatile electricity prices, low-level flow constraints do not lead to significant reductions in electricity production. However, the simulation still reveals a revenue decrease. Moderate price levels lead to larger relative losses and require more generation from thermal power plants. Incorporating energy storage units reduces economic losses and emissions, underscoring their potential as alternative flexibility providers in the energy system. Introducing a medium-restricted scenario featuring a large energy storage unit seems viable for balancing environmental and economic impacts.</p>