How can I update the last_value field in my sequence and add 1 to it?
The query I tried: ALTER SEQUENCE "seq_hours" SET 'last_value' = 'last_value' + 1
However this did not work.
Use setval() with a subquery to get the value from a table, e.g.
SELECT setval('seq_hours', (SELECT max(last_value)+1 FROM t));
EDIT: This solution only makes sense if you want to set the current value of a sequence based on a value from a given table. If you only want the next possible value of a sequence you should use nextval as @a_horse_with_no_name suggested (see comments)