UNIT-I

ECONOMIC OPERATION
TOPICS: Optimal operation of Generators in Thermal Power Stations, - heat
rate Curve – Cost Curve – Incremental fuel and Production costs, input-
output characteristics, Optimum generation allocation without line losses,
Optimum generation allocation including the effect of transmission line
losses – Loss Coefficients, General transmission line loss formula.

INTRODUCTION :
A good business practice is the one in which the production cost is minimized
without sacrificing the quality. This is not any different in the power sector as well. The
main aim here is to reduce the production cost while maintaining the voltage
magnitudes at each bus.
The operation economics can again be subdivided into two parts.
i) Problem of economic dispatch, which deals with determining the power output of
each plant to meet the specified load, such that the overall fuel cost is minimized.
ii) Problem of optimal power flow, which deals with minimum – loss delivery, where in
the power flow, is optimized to minimize losses in the system.
The factors influencing the cost of generation are the generator efficiency, fuel
cost and transmission losses. The most efficient generator may not give minimum cost,
since it may be located in a place where fuel cost is high. Further, if the plant is located
far from the load centres, transmission losses may be high and running the plant may
become uneconomical. The economic dispatch problem basically determines the
generation of different plants to minimize total operating cost.
Modern generating plants like nuclear plants, geo-thermal plants etc, may
require capital investment of millions of rupees. The economic dispatch is however
determined in terms of fuel cost per unit power generated and does not include capital
investment, maintenance, depreciation, start-up and shut down costs etc.

OPTIMAL OPERATION OF GENERATORS IN THERMAL POWER STATIONS

The optimal system operation involved the consideration of economy of
operation, system security, and optimal releases of water at hydro generation etc. The
main aim in economy of operation problem is to minimize the total cost of generating
real power at various stations while satisfying the loads and losses in the transmission
links. The economy of operation only, also called the Economic Dispatch problem. For
simplicity we consider the presence of thermal plants only in the beginning.
Economic dispatch problem is really the solution of a large number of load flow
problems. The cost of generation is not fixed for a particular load demand but depends
upon the operating constraints (limits) of the sources. Therefore, the following are the
various constraints before taking up the economic dispatching problem.
System constraints:
There are two types of constraints
(i) Equality Constraints (ii) Inequality Constraints
(i) Equality Constraints :
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The equality constraints are the basic load flow equations given by
 Pp  jQp  Vp* Ip [at bus P]

But
I p   YpqVq
q 1

n
Pp  jQ p  V *
p Y
q 1
V
pq q ----------------- (1)

Let V p  e p  jf p Vq  eq  jf q Ypq  G pq  jB pq
Substitute all the above values in eq(1) we get

n
Pp  jQ p  (e p  jf p ) *
 (G
q 1
pq  jB pq )(eq  jf q )

n
Pp  jQ p  (e p  jf p ) (G pq  jB pq )(eq  jf q )
q 1

Separate real and imaginary parts, we get

where ep and fp are the real and imaginary components of voltage at the pth node and
Gpq and Bpq are the nodal conductance and susceptance between the pth and qth nodes.

(ii) Inequality Constraints : They are

(a) Generator Constraints (b) Voltage Constraints
(c) Transformer tap settings (d) Transmission line Constraints
(e) Running Spare Capacity Constraints (f) Security constraints:
(a) Generator Constraints :
The KVA loading on a generator is given by Pp2 + Qp 2 and should not exceed a
prespecified value Cp.
i.e Pp2+Qp2 ≤ Cp2
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 The generator active power Pp cannot be outside the range stated by the
inequality

i.e Ppmin ≤ Pp ≤ Ppmax

The maximum active power generation of a source is limited again by thermal

consideration and also minimum power generation is limited by the flame instability of
a boiler. If the power output of a generator for optimum operation of the system is less
than a prespecified value Pmin the unit is not put on the bus bar because it is not
possible to generate that low value of power from that unit.
Similarly the generator reactive power Qp cannot be outside the range stated by
the inequality

i.e Qpmin ≤ Qp ≤ Qpmax

Similarly the maximum and minimum reactive power generation of a source are
limited. The maximum reactive power is limited because of overheating of the rotor and
minimum is limited because of the stability limit of the machine.

(b) Voltage Constraints :

It is essential that the voltage magnitudes and phase angles at various nodes
should vary within certain limits. The voltage magnitudes should vary within certain
limits because otherwise most of the equipments connected to the system will not
operate satisfactorily or additional use of voltage regulating devices will make the
system uneconomical. Hence
i.e │Vpmin│≤│Vp│≤│Vpmax│
δpmin ≤ δp ≤ δpmax
Where │Vp│and δp are the voltage magnitude and phase angle at the node P.

(c) Transformer tap settings :

If an auto-transformer is used the minimum tap setting could be zero and the
maximum is one.
i.e 0 ≤ t ≤ 1.0
Similarly for a two winding transformer if tappings are provided on the
secondary side then it is given as
0<=t<=n
Where ‘n’ is the ratio of transformation.
Phase shift limits of the phase shifting transformer
θpmin ≤ θp ≤ θpmax

(d) Transmission line Constraints :

The flow of active and reactive power through the transmission line circuit is
limits by the thermal capability of the circuit and is expressed as
Cp ≤ Cpmax.
Where Cpmax is the maximum loading capacity of Pth line.

(e) Running Spare Capacity Constraints:

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These constraints are required to meet: (i) the forced outages of one or more
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alternators on the system, and (ii) the unexpected load on the system.
The total generation should be such that in addition to meeting load demand and losses
a minimum spare capacity should be available i.e.,
G ≥ Pp + Pso
where G is the total generation and Pso is some prespecified power. A well planned
system is one in which this space capacity Pso is minimum.

(f) Security constraints:

Power system security and power flows between certain important buses are
also considered for the solution of an optimization problem.
If the system is operating satisfactorily, there is an outage that may be scheduled
or forced, but some of the constraints are naturally violated. It may be mentioned that
consideration of each and every possible branch for an outage will not be a feasible
proportion. When a large system is under study, the network security is maintained
such that computation is to be made with the outage of one branch at one time and then
the computation of a group of branches or units at another time.

CHARACTERISTIC CURVES
(I) INPUT – OUTPUT CHARACTERISTICS:
The idealized form of input–output characteristics of a steam unit is shown
in Fig. It establishes the relationship between the energy input to the turbine and the
energy output from the electrical generator. The input to the turbine shown on the
ordinate may be either in terms of the heat energy requirement, which is generally
measured in Btu(British Thermal unit)/hr or kCal/hr or in terms of the total cost of fuel
per hour in Rs./hr. The output is normally the net electrical power output of that steam
unit in kW or MW.
In practice, the curve may not be very smooth, and from practical data, such an
idealized curve may be interpolated. The steam turbine-generating unit curve consists
of minimum and maximum limits in operation, which depend upon the steam cycle
used, thermal characteristics of material, the operating temperature, etc.

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(II) HEAT RATE CURVE :
The heat rate characteristic obtained from the plot of the net heat rate in
Btu/kWh or kCal/kWh versus power output in kW is shown in Fig.
The thermal unit is most efficient at a minimum heat rate, which corresponds to
a particular generation PG. The curve indicates an increase in heat rate at low and high
power limits.
Thermal efficiency of the unit is affected by the following factors:
Condition of steam, steam cycle used, re-heats stages, condenser pressure, etc. The
efficiency of the units in practice is around 30%.

(III) COST CURVES :

The cost curve can be obtained by experimentally. To convert the input–output
curves into cost curves, the fuel input per hour is multiplied with the cost of the fuel
(expressed in Rs./million kCal).

(IV) INCREMENTAL FUEL COST CURVE :

From the input–output curves, the incremental fuel cost (IFC or IC) curve can be
obtained.
The IFC is defined as the ratio of a small change in the input to the corresponding
small change in the output.

where ∆ represents small changes.

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 As the ∆ quantities become progressively smaller, it is seen that the IFC
d (input)
is and is expressed in Rs./MWh. A typical plot of the incremental cost versus
d (output )
output power is shown in Fig.(a).
The incremental fuel cost curve is obtained by considering the change in the cost
of generation to the change in real-power generation at various points on the input–
output curves, i.e., slope of the input–output curve as shown in Fig.(b).
The IFC is now obtained as
(IC)i = slope of the fuel cost curve

The IFC (IC) of the ith thermal unit is defined, for a given power output, as the
limit of the ratio of the increased cost of fuel input (Rs./hr) to the corresponding
increase in power output (MW), as the increasing power output approaches zero.

By fitting a suitable degree polynomial, an analytical expression for operating

cost can be written as

where the suffix ‘i’ stands for the unit number. It generally suffices to fit a second degree
polynomial, i.e.

dC i
The slope of the cost curve, i.e. is called the incremental fuel cost(IC) and is
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dPGi
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expressed in units of rupees per Megawatt hour (Rs/MWh).

(V) INCREMENTAL PRODUCTION COST:
The incremental production cost of a given unit is made up of the IFC plus the
incremental cost of items such as labour, supplies, maintenance, and water.
It is necessary for a rigorous analysis to be able to express the costs of these
production items as a function of output. However, no methods are presently available
for expressing the cost of labour, supplies, or maintenance accurately as a function of
output.
Arbitrary methods of determining the incremental costs of labour, supplies, and
maintenance are used, the commonest of which is to assume these costs to be a fixed
percentage of the IFCs.
In many systems, for purposes of scheduling generation, the incremental
production cost is assumed to be equal to the IFC.
The sum of incremental fuel cost and other incremental running expenses is
called incremental production cost.

OPTIMUM GENERATION ALLOCATION WITHOUT LINE LOSSES

(OR)
ECONOMIC SHCEDULING WHEN TRANSMISSION LINE LOSSES NEGLECTED

It is that for a given load to be allocated between several generating units, the
most efficient unit identified by incremental cost of production should be the one to get
priority. When this is applied repeatedly to all the units the load allocation will become
complete when all of them that are involved in operation are all working at the same
incremental cost of production.
The above can be proved mathematically as follows:
Consider a power station having ‘n’ number of units. Let us assume that each unit
does not violate the inequality constraints and let the transmission losses be neglected.
The economic dispatch problem is defined as

This cost is to be minimized subject to the equality constraint given by

where FT is total fuel input to the system, Fn the fuel input to nth unit, PD the total load
demand and Pn the generation of nth unit.
To get the solution for the optimization problem, we will define an objective
function by augmenting Equation(1) with an equality constraint (Equation(2)) through
the Lagrangian multiplier (λ) as

where ‘λ’ is the Lagrangian multiplier.

Differentiating F with respect to the generation Pn and equating to zero gives the
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condition for optimal operation of the system.

 The equation (3) mean that the machines be so loaded that the incremental cost
of production of each machine is same. It a called a co-ordination equation. It is to be
noted here that the active power generation constraints are taken into account while
solving the equations which are derived above. If these constraints are violated for any
generator it is tied to the corresponding limit and the rest of the load is distributed to
the remaining generator units according to the equal incremental cost of production.
The simultaneous solution of equations (2) and (3) gives the economic operating
schedule.

[OR
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FLOW CHART FOR ECONOMIC SCHEDULING : TRANSMISSION LOSSES NEGLECTED
[ ITERATIVE METHOD ]

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TRANSMISSION LOSS COEFFICIENTS : B-COEFFICIENTS
Consider a power system supplying ‘nl’ loads. Let the load currents be iL1, iL2 ….. ,
iLn. These loads are supplied by ‘ng’ generators. Let the generator currents be ig1, ig2,
……, igng. This is shown in the Fig.

Consider a network element K (an inter connected line in the system) carrying
current IK. Let generator 1 alone supply the entire load current IL where

Under this condition let the current in K be iKl.

In a similar manner if each of the ‘ng’ generators operating alone also supply the
total load current IL while the rest of the generators are disconnected the current
carried by the network element K changes from iK1 to iK2 and iK3 to iKng.
Let the ratio of iKl to iL be dKl

and so on.
Now, if all the generators are connected to the power system simultaneously to supply
the same load, by the principle of super position.

Let the individual load currents remain a constant complex ratio of the total load
current IL. It is assumed that (X/R) ratio for all the line elements or branches in the
network remains the same. The factors dKl will then be real and not complex.
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 The individual generator currents may have phase angles δ1, δ2, ……., δng with
respect to a reference axis. The generator currents can be expressed as :

Let ng=3,

But we know, the currents interms of powers supplied by the generators are
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The power losses in the network comprising of ‘nb’ network elements or branches PLOSS
is given by

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 The following assumptions including those mentioned already are necessary,
if B-coefficients are to be treated as constants as total load and load sharing between
plants vary. These assumptions are:
1, All load currents maintain a constant ratio to the total current.
2. Voltage magnitudes at all plants remain constant.
3. Ratio of reactive to real power, i.e. power factor at each plant remains constant.
4. Voltage phase angles at plant buses remain fixed. This is equivalent to assuming that
the plant currents maintain constant phase angle with respect to the common reference,
since source power factors are assumed constant as per assumption 3 above.
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OPTIMUM GENERATION ALLOCATION INCLUDING THE EFFECT OF TRANSMISSION
LINE LOSSES
(OR)
OPTIMUM LOAD DISPATCH INCLUDING TRANSMISSION LOSSES
Consider the Fig. shown which consists of two identical generators i.e.,
generators with identical incremental production cost. If generator 2 has a local load,
according to equal incremental production criterion, the total load must be shared
equally by both the generators, i.e., each generator should supply half of the total load.
The common sense tells us that it is more economical to let generator 2 supply
most of the local load because generator 1 has to supply in addition to the load, the
transmission losses also. Therefore, the criterion of sharing load by equal incremental
production cost does not hold well under such situation and a strategy must be evolved
which takes into account the transmission losses also.

The optimal load dispatch problem including transmission losses is defined as

where PL is the total system loss which is assumed to be a function of generation and
the other term have their usual significance.
Making use of the Lagrangian multiplier λ, the auxiliary function is given by

The partial differential of this expression when equated to zero gives the condition for
Optimal load dispatch, i.e.,

PL
Here the term is known as the incremental transmission loss at plant n and λ is
Pn
known as the incremental cost of received power in Rs. per MWhr.
The above equation is a set of n equations with (n + 1) unknowns. Here n
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generations are unknown and λ is also unknown. These equations are known as
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coordination equations because they coordinate the incremental transmission losses
with the incremental cost of production.
To solve these equations the loss formula equation is expressed in terms of
generations and is approximately expressed as

where Pm and Pn are the source loadings, Bmn the transmission loss coefficients. The
formula is derived under the following assumptions:
1. The equivalent load current at any bus remains a constant complex fraction of the
total equivalent load current.
2. The generator bus voltage magnitudes and angles are constant.
3. The power factor of each source is constant.

The solution of coordination equation (1) requires the calculation of ∂PL/∂Pn

which is obtained from equation (2) as

To arrive at an optimal load dispatching solution, the simultaneous solution of

the coordination equations along with the equality constraint should suffice and any
standard matrix inversion subroutine could be used.
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FLOW CHART FOR ECONOMIC SCHEDULING : TRANSMISSION LOSSES INCLUDED
[ ITERATIVE METHOD ]

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GENERAL TRANSMISSION LINE LOSS FORMULA
An exact formula for calculating transmission losses is derived by making use of
the bus powers and the system parameters.
Let Si be the total injected bus power at bus ‘i’ and is equal to the generated
power minus the load at bus ‘i’. The summation of all such powers over all the buses
gives the total losses of the system, i.e.,

From above two equations,

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The above expression can be rewritten by using index notation as

The transmission loss has been expressed in terms of bus currents. In an actual
power plant, the system operators usually know the bus powers and the nodal voltages;
therefore, it is more practical to express PL in terms of these quantities.

We have expressed here the real and imaginary components of bus currents in
terms of bus powers and the bus voltages. Substituting these values in the expression
for power loss, we get after some algebraic manipulations, 18

By making use of this expression for transmission losses along with the
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coordination equations, the problem of optimal load dispatch can be solved.

 PROBLEMS
1) The fuel inputs per hour of plants 1 and 2 are given as

Determine the economic operating schedule and the corresponding cost of generation if
the maximum and minimum loading on each unit is 100 MW and 25 MW, the demand is
180 MW, and transmission losses are neglected. If the load is equally shared by both the
units, determine the saving obtained by loading the units as per equal incremental
production cost.
SOL:
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2) The fuel cost of two units are given by
C1 = C1 (PG1) = 1.0 + 25 PG1 + 0.2 PG1 Rs/hr
2

C2 = C2 (PG2) = 1.5 + 35 PG2 + 0.2 PG 2 Rs/hr

2

If the total demand on the generators is 200 MW, Find the economic load scheduling
of the two units.
SOL:

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By solving the above equations,

3) Three power plants of total capacity of 500 MW are scheduled for operation to
supply total system load of 350 MW. Find the optimum scheduling if plants have
incremental cost characteristics of

SOL:
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4) The IFC for two plants are
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The loss coefficients are given as B11 = 0.0015/MW, B12 = B21 = − 0.0004/MW, and B22 =
0.0032/MW for λ = 25 Rs./MWh. Find the real-power generations, total load demand,
and the transmission power loss.
SOL:

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5) On a system consisting of two generating plants, the incremental costs in Rs./MWh
with PG1 and PG2 in MW are

The system is operating on economic dispatch with PG1 = PG2 = 500MW and
PL
 0.2 . Find the penalty factor of Plant-1.
PG 2
SOL:
Given that the system operates on economic dispatch with PG1 = PG2 = 500 MW,
the condition for this optimal operation when considering the transmission loss is
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and also given that ITL of Plant-2,

The penalty factor of Plant-2,

∴ For optimal condition,

or [(0.008 × 500) + 80] L1 = (0.012 × 500 + 9.0)1.25

or 12 L1 = 18.75

or L1 = 1.5625
∴ Penalty factor of Plant-1 = 1.5625.

6) A two-bus system is shown in Fig. If a load of 125 MW is transmitted from plant 1 to

the load, a loss of 15.625 MW is incurred. Determine the generation schedule and the
load demand if the cost of received power is Rs. 24/MWhr. Solve the problem using
coordination equations and the penalty factor method approach. The incremental
production costs of the plants are

SOL:
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7) Assume that the fuel input in Btu per hour for units 1 and 2 are given by

The maximum and minimum loads on the units are 100 MW and 10 MW respectively.
Determine the minimum cost of generation when the following load (Fig.) is supplied.
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The cost of fuel is Rs. 2 per million Btu.

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 SOL:

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8) The fuel input characteristics for two thermal plants are given by

Where P1 and P2 are in megawatts

(i) Plot the input-output characteristic for each plant
(ii) Plot the heat rate characteristic for each plant
SOL:

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9) Determine the saving in fuel cost in Rs./hr for the economic distribution of a total
load of 225 MW between the two units with IFCs:
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Compare with equal distribution of the same total load.

 SOL:

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10) Given a two bus system as shown in Fig

It is observed that when a power of 75MW is imported to bus 1, the loss amounted to
5MW. Find the generation needed from each plant and also the power received by the
load, if the system λ is given by Rs.20/MWHr. The incremental fuel cost at the two
plants are given by

SOL:

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