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ECE666: Power Systems Operation

Module-1: Power System Economic Operation


Part-1: Economic Load Dispatch, Multi-Area Dispatch and Power Pools

Prof. Kankar Bhattacharya


Department of Electrical & Computer Engineering
University of Waterloo, Waterloo, N2L 3G1, Canada
kankar@uwaterloo.ca

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Coverage

• Power system operational timeframes


• Steam generator characteristics
• The ELD problem
• KKT conditions of optimum, concept of marginal cost
• Solution of the ELD problem
• ELD with transmission losses
• Loss formula, ELD model formulation, Concept of loss coefficients and
penalty factor, coordination equations and their solution
• Power Pools and Multi-Area Interchanges

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Vertically Integrated Power Systems

Utility-1 Utility-2
Generator Generator

Wholesaler / Wholesaler /
Transmitter Transmitter

Distributor Distributor

Customer Customer
Energy sales
Money flow
Energy flows in same company

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Power Systems Operation and Planning
Time-frame Activity
10 years ahead Planning to expand generation & transmission system
to meet the demand
1–2 years ahead Planning for fuel supply contracts (coal mine
allocations, transport linkages); develop
generating unit maintenance schedules; medium-
term production schduling
1–7 days ahead Schedule hydro reservoir drawdown, decide on which
generators should be committed / de-committed
at what hours
5–30 min ahead Decide which unit should bear the load increments or
decrements following deviations from load
forecast. Run load-flows to evaluate system
status and take preventive actions- capacitor
switching, load curtailment, etc.
1–300 seconds Tackle faults, disturbances, short-circuits, oscillations

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Power System Operations

• Short-term Operations (Pre-dispatch)


• Extends from 1-week to 1-day ahead. A short-term load forecast
available. Schedules for unit operations are drawn up for the said
period- can include scheduling of hydro generators, depending on
reservoir levels, and power exchanges with other regions
• Real-Time Operations
• Dispatch: about 30 minutes ahead; load flow analysis and
economic dispatch, operator has close forecast of system load,
including exchanges scheduled and decides on necessary reactive
support, load curtailment, if any; maintains adequate reserves to
call at short notice
• Instantaneous dispatch: 5-min ahead, implements pre-dispatch /
dispatch plans with continuous improvements using real-time
data; initiates secondary frequency control actions updates
generation schedules

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Steam Generator Characteristics: I/O

• The Input / Output (I/O) characteristic of a steam generator


is an important parameter in understanding economic
operations
• Power output of a generator (MW output) depends on the
fuel input (in the boiler) and hence the heat input
• “Gross heat input” at boiler end and “net power output” are
used for I/O characteristics
• Net Power Output = Total power generated – Power consumed
by plant auxiliaries

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I/O Characteristics… contd.

• Actual operating data from a steam generator is used to


develop its I/O characteristic
• Hi(Pi) is the heat I/O characteristic of generator i which
denotes the heat required (in MBTU) to generate a certain
MW of power, Pi, per hour
• Hi(Pi) is represented in MBTU/h
• Typically, Hi(Pi) is a polynomial function of Pi

H i Pi   f Pi 

• For example,

H i Pi   f Pi   a / Pi2  b / Pi  c /

• Parameters a/, b/ and c/ are determined from field tests

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I/O Characteristics… contd.

• The cost I/O characteristic of generator i, Ci(Pi), can


therefore be obtained using Hi(Pi) and the fuel cost, FC

Ci Pi in $/h    FC in $/MBTU  H i Pi in MBTU/h 

• Typically, the cost I/O characteristic is thus,

 
Ci Pi    FC H i Pi    FC a / Pi2  b / Pi  c /  aPi2  bPi  c

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I/O Characteristics… contd.

• A plot of generator input (heat or cost) versus net output


(power) is shown
• Typically the I/O characteristic representation is of second order
polynomial; which is an “ideal” form as a smooth convex curve
Ci Pi   ai Pi 2  bi Pi  ci
Cost ($/h) or Heat Input (MBTU/h)

PMin PMax MW

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Minimum Loadability of Steam Generators

• Observe that the I/O characteristic is within the PMin and PMax
limits of the generator
• The PMin limit defines a Minimum Loadability of the steam
generator- the minimum load at which the unit can operate
• This is determined by the fuel combustion stability and other
steam generator design constraints
• Most super-critical units cannot operate below 30% of their
design capacity
• Super-critical units: advancement of conventional coal-fired steam
generation, involving use of supercritical steam pressure and steam
temperatures > 1100 F
• A minimum flow of 30% is required to adequately cool the tubes in the furnace of the
steam generator

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Incremental Cost Characteristic

• The incremental cost characteristic is obtained as the


derivative of the I/O Characteristic. For the given second-
order polynomial, we have,
dCi Pi 
 2ai Pi  bi
dPi

• The incremental cost characteristic denotes the additional


cost required to produce an extra MWh of energy
Incremental Heat Input (MBTU/
Incremental Cost ($/MWh) or

MWh)

PMin PMax MW
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Net Heat Rate Characteristic

• Heat Rate (HR): defined as the amount of heat required to


generate 1 unit (kWh) of electricity
• Denoted by BTU/kWh
• In effect, this is the reciprocal of the generator’s efficiency

• Example:
• Generator HR = 9000 BTU/kWh
• We know, 1 kWh = 3412 BTU thermal equivalent
• Thus Generator HR = 9000 BTU/3412 BTU
• Implying that 3412 BTU of equivalent heat is produced when the input is
9000 BTU. Thus the unit’s overall conversion efficiency is
•  = (3412/9000)x 100 = 37.91%

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Net Heat Rate Characteristic

• The heat rate characteristic is a plot of the unit HR versus


the power output. It is a function of the generator’s
design parameters.
• The lowest HR (i.e. highest efficiency) operation is
attained at P=PRated Unit heat rate, H/P (Btu/kWh)

Output, P (MW)
PMin PRate PMax
d
ax

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The Economic Load Dispatch Problem

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Economic Load Dispatch (ELD) Problem

• The ELD problem primarily involves allocating the total load


between all available and synchronized generating units
• The main objective is that the total cost of operation, i.e.
the total generation cost, be kept at a minimum
• An ELD is executed in the dispatch stage (every 5 minutes)
• Hence the solution algorithm should be efficient
• However, the ELD should also represent the system in as much
detail as possible

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The ELD Problem… contd.

• Consider a system of N generating units (i  1, 2, …, N)


• Each unit feeds power, Pi, to the transmission system,
serving a total load PD
P1
G1

P2
G2 Transmission
system

PD

PN
GN

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The ELD Problem- Assumptions

• Vertically integrated environment


• The system operator has access to all generators’ cost
functions and is responsible for their dispatch
• System load is aggregated for the whole system at a single
node. Spatial distribution of loads is ignored.
• Transmission losses are usually neglected
• Or a simplistic representation is used

• Reactive power demand is neglected


• Consequently all bus voltages and reactive power relations are
ignored
• Generating units that are committed for the given time
interval are only considered for ELD
• A decision making has already taken place as to what units will
be on-line at that time interval

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ELD Mathematical Model

• Objective Function: Minimize the total cost of generation


from all generating units in the system
• Using the quadratic cost function, we have
N N
J   Ci Pi    ai Pi 2  bi Pi  ci
i 1 i 1

• Demand-Supply Balance: The operator dispatches the


generators to meet the total system demand
N

P
i 1
i  PD

• Upper and Lower Limit on Generation: Generation from a


unit is constrained by the limits
Pi Min  Pi  Pi Max i  N

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ELD Mathematical Model… contd.

• The overall model is thus,


N N
• Minimize J   Ci Pi    ai Pi 2  bi Pi  ci
i 1 i 1

• Subject to,
N
 Pi   0  PD   Pi  0
i 1

g Pi   0  Pi Min  Pi  0 i  N

hPi   0  Pi  Pi Max  0 i  N

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Structure of a General Optimization Problem

Minimize J
 i  X   0  i iN
Subject to 
 g j  X   0   j  jM

• The above is a constrained minimization problem which can


be converted to an unconstrained minimization problem by
defining a new function, the Lagrange Function or
Lagrangian, as follows:
N M
F ( X , i , i )  J   i  X    i g i  X 
i 1 j 1
• F(.) is formed by augmenting objective J with equality and inequality
constraints, using multipliers, i and j.
• These multipliers, i and j, known as Lagrange multipliers, are unknowns,
and are simultaneously determined from the optimization solution.

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The ELD Lagrangian

• The ELD Lagrangian can accordingly be written as:


N N
F ( Pi ,  , i ,  i )  J ( Pi )   Pi    i g i Pi     i hi Pi 
i 1 i 1

N  N 
F Pi ,  , i ,  i    Ci Pi     PD   Pi 
i 1  i 1 

    
 1 P1Min  P1   2 P2Min  P2  ...   N PNMin  PN 
  P  P
1 1   P  P        P
1
Max
2 2 2
Max
N N  PNMax 

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Conditions for Optimum

• The conditions for optimum are based on the same principle


of finding the minima of a function
• Except that, the full derivative of the function is replaced by
partial derivative of Lagrangian
F
a. 0  i  1,......, N
 Pi

F
b.  0   Pi   0


• The above conditions yield N+1 equations in (N+1) variables,


Pi (i = 1, 2, …, N) and , and can be solved uniquely

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Conditions for Optimum… contd.

• Complementary Conditions
If g i(Pi )  0 (binding constraint ), then i  0
c.  i g i Pi   0  i  1,...., N 
i  0  If g i(Pi )  0 (not binding) , then i  0

d .  i hi Pi   0  i  1,...., N If hi(Pi )  0 (binding constraint ), then  i  0



i  0  If hi(Pi )  0 (not binding) , then  i  0

• The complementary conditions implies:

If Pi  PiMin (binding constraint ) then i  0



 If Pi  PiMin (not binding) , then i  0

If Pi  PiMax (binding constraint ), then  i  0



 If Pi  PiMax (not binding) , then  i  0

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Conditions of Optimum… contd.

• The optimization problem is first solved assuming


• i = 0 and i = 0, for all i
• Which means the inequality constraints are not “binding” and all
generation variables (Pi) are within their limits
• The conditions of optimum are the well known, Karush-
Kuhn-Tucker’s (KKT) conditions of optimality
• Applying KKT conditions on the ELD Lagrangian, we obtain

F dCi Pi 
0    i   i  0 iN
Pi dPi

F N
 0  PD   Pi  0
 i 1

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KKT Conditions Applied to ELD… contd.

• Applying the complementary conditions, we obtain:

 
1 P1Min  P1  0, 1  0  
 1 P1  P1Max  0,  1  0

 
 2 P2Min  P2  0,  2  0  
 2 P2  P2Max  0,  2  0
....

 
 N PNMin  PN  0,  N  0  
 N PN  PNMax  0,  N  0

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KKT Conditions on ELD... Contd.

• From the first KKT applied on ELD, we obtained

dCi Pi 
   i   i  0  i  1,..., N
dPi

• Case-1: All Pi within limits, i = 0, i = 0


i   i  0 i  1,..., N
dCi Pi 
 
dPi

• When all generators operate within limits, optimal dispatch is


at equal incremental cost

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KKT Conditions on ELD… contd.

• Case-2: Let P1=P1Max, • Case-3: Let P1=P1Min,


all other Pi within limits all other Pi within limits
1  0
1  0
 i  0 i  2,..., N
i  0 i  2,..., N
i  0 i  1,..., N
 i  0 i  1,..., N
dCi Pi 
  i  2,..., N dCi Pi 
dPi   i  2,..., N
dPi

For i  1,
For i  1,
dC P 
 1 1    1 dC P 
dP1  1 1    1
dP1
dC1 P1  dC1 P1 
   
dP1 dP1

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To Summarize
• Conditions for optimum of a constrained ELD problem are:
dCi Pi 
 PiMin  Pi  PiMax
dPi
dCi Pi 
 Pi  PiMax
dPi
dCi Pi 
 Pi  PiMin
dPi

• The ELD is first solved without the inequality constraints;


if generator limits are binding, the specific limiting
constraints are included in the Lagrangian, and KKT
conditions re-determined.
• In such cases, it is always necessary to verify that the
conditions for optimality are satisfied
•  is known as the System Marginal Cost (SMC), the cost to
supply 1 additional MWh of energy in the system
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Part-1
Economic Load Dispatch Considering
Transmission Losses

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ELD Problem With Transmission Losses

• So far we considered the ELD problem by ignoring


transmission losses
• However, transmission losses can alter dispatch solutions
and need to be taken into account for system economic
operation
• Representation of transmission losses in ELD problems is
usually approximate
• Use of Loss Formula Coefficients

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Kirchmayer’s Loss Formula
• System loss is expressed in terms of active power
generation
• Commonly referred to as the B-Matrix Loss Formula
k k k
PLoss P1 , P2 ,..., PN    Pm Bmn Pn   Bmo Pm  K lo
m 1 n 1 m 1

• PLoss : Power loss


• Pm, Pn: Power generation from all sources
• Bmn: Loss coefficients in Watt/MW2
• A linear term ΣBm0Pm and a constant Kl0 are also included

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ELD Considering Losses

• The same ELD objective is considered, that of minimizing


the total cost of generation,
N N
J   Ci Pi    ai Pi 2  bi Pi  ci
i 1 i 1

• Demand-supply balance: the generators meet the total


system demand and losses
N

P  P i D  PLoss P1 , P2 ,..., PN 


i 1

• Upper and lower limit on generation: generation from a unit


is constrained by the upper and lower limits
Pi Min  Pi  Pi Max i  N

• For the present discussions, generation limits are not


considered. But these can be introduced in the same manner,
as before

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ELD Mathematical Model With Losses
• The Lagrangian of the ELD problem with transmission
losses, can be formulated as follows
N
 
F   Ci ( Pi )    PD  PLoss P1 , P2 ,..., PN    Pi 
i 1  i 

• The above can be written in elaborate form as:

F  C1 ( P1 )  C2 ( P2 )  ...  C N ( PN )
  PD  PLoss P1 , P2 ,..., PN   P1  P2  ...  PN 

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ELD Mathematical Model With Losses
• The KKT condition can be applied to the Lagrangian, and
we obtain therefore, a set of N- equations, as follows:

F dC1 PLoss
    0
P1 dP1 P1
F dC2 P
   Loss    0
P2 dP2 P2
...
F dC N P
   Loss    0
PN dPN PN

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ELD Mathematical Model With Losses

• In general form, these can be re-organized as,


F dCi  P 
    Loss  1  0  i  1,..., N
Pi dPi  Pi 
• We can further re-write as,
 
 
 1   dCi  
 PLoss  dPi
 1  P 
 i 

PLoss
Pi is Incremental Loss Factor at bus i
• Denotes sensitivity of system loss to power injection at
bus i
• Power injection at a bus i, Pi, is given by, Pi = PGi - PDi
• Pi increases when PGi increases or PDi decreases
• Pi decreases when PGi decreases or PDi increases

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Incremental Loss Factor… contd.

• If losses increase, for an increase in power injection at a


bus i
• Incremental Loss > 0
• A generator / customer at this bus contributes directly to
system losses when it injects power by increasing generation /
reducing load
• If losses decrease, for an increase in power injection at a
bus i
• Incremental Loss < 0
• A generator / customer at this bus contributes inversely to
system losses when it injects power by increasing generation /
reducing load

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Loss Penalty Factor
• The Loss Penalty Factor for bus i, pfi, is defined using the
Incremental Loss Factor as follows:
1
pf i 
PLoss
1
Pi

• If incremental Loss > 0, Penalty Factor >1


• If injection at a bus contributes directly to losses,
the penalty factor acts as a “penalty”
• If incremental Loss < 0, Penalty Factor <1
• If injection at a bus contributes “inversely” to
losses, the penalty factor acts as a “credit”

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Coordination Equations
• The conditions for optimum can be written in terms of loss
penalty factors, as follows:
dCi
pf i   i  1,...,N
dPi

• The above is termed as Coordination Equations, which


needs to be solved to obtain the economic dispatch.
dC1
pf1  
dP1
dC2
pf 2  
dP2 Composite ELD Model
.... with Losses
dC N Considered
pf N  
dPN

P  P i D  PLoss P1 , P2 ,..., PN 


i 1

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Coordination Equations… contd.

dC1/dP1 With penalty factor


dC2/dP2 dC3/dP3

pf > 1 pf > 1 pf < 1

’

P’1 P1 P’2 P2 P3 P’3


MW MW MW

No penalty factor

The criterion of equal incremental cost operation can be extended


from ELD without losses, to an ELD with losses, considering that for
a generator with pf > 1, its incremental cost curve is scaled up while
for one with pf < 1, the incremental cost curve is scaled down

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Iterative Solution of ELD with Losses

Choose starting value of Pi, i = 1,…,N

Calculate PLoss and hence penalty factor at bus i

Choose starting 

Solve for each Pi


Adjust 
dFi Pi 
pf i   for i  1, ..., N
dPi

NO
P P i D ?
YES

Compare Pi to Pi of previous iteration and save Max |Pik-1 - Pik|

NO
Pi k 1  Pi k   o ? YES
STOP

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Power Pools and Multi-Area Interchanges

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Power Pools

• Pools existed as a reaction to increasing price of electricity


• Reduce utilities’ operating cost by sharing cheaper generation

• Pooling was desirable because they


• Enhanced reliability and reduced costs
• Load change shared by all generators in the interconnection
• Pool ELD can be obtained if all cost information was available

• Structure of the Pool depended on


• Role of Pool Operator-
• Generation dispatch, unit commitment, setting up transactions,
maintenance scheduling and even long-term expansion planning
• How transactions were set up
• Joint dispatch of generation for all areas simultaneously
• Energy Brokerage System- transactions based on bid / offer system
• How cost savings were allocated to pool participants
• Split the savings equally, proportional, etc.

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Power Pools-1: Economic Exchange of Energy

• Simple form of arrangement involving exchange of energy


between two utilities with significant differences in their
marginal costs
• Utility with higher operating cost purchases power from
utility with lower operating costs
• Arrangement usually on hour to hour basis and conducted by
two system operators
• Benefit from such an arrangement is ensured if savings in
production cost from two cooperating utilities is more than the
cost incurred from payments towards charges for transmission
of energy

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Economic Exchange of Energy… contd.

• Let, utilities U1 and U2 be involved in economic interchange


of energy at a certain hour
• U1 transferring PT MW of power to U2
• C1*: Cost of U1 on Economic Dispatch, meeting its own demand PD1
• C2*: Cost of U2 on Economic Dispatch, meeting its own demand PD2
• C1: Cost of U1 to generate extra PT MW (generating PD1 + PT MW)
• C2: Cost of U2 after receiving PT MW from U1 (generating PD2 – PT MW)
• Increased cost to U1 from the transaction is
C1  C1  C1*

• Reduction in cost for U2 from the transaction is


C2  C2*  C2
• The net savings (S) from a transaction is thus

S  C2  C1

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Economic Exchange of Energy… contd.

• S>0 Feasible transaction [1 < 2]


• S<0 Infeasible transaction [1 > 2]
• 1, 2: incremental cost of exporting and importing utilities respectively
• U1 exporting PT to U2, a negative savings would occur if 1 > 2
• Seller’s advantage- when buyer’s incremental cost high
• Buyers advantage- when seller’s incremental cost low

• Savings allocation- simplest approach is to split the savings


equally
• U2 pays U1 for the PT MW import, an amount equal to U1’s
increased cost from the transaction and half of the savings
resulting therefrom

56 Module-1, Part-1 ECE666: Winter 2021


Module-1,
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Module-1,
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Module-1,
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Power Pools-2: Coordinated ELD

• Independent Mode of Operation of Utilities:


• The set of M utilities obtain their own optimum schedules using
the classical ELD condition:
dC1,1 dC1,2 dC1, N1
  ...   1
dP1,1 dP1,2 dP1, N1
...
dC M ,1 dC M ,2 dC M , NM
  ...   M
dPM ,1 dPM ,2 dPM , NM
• Each utility operate at “equal incremental cost” condition
• The respective marginal costs of generation are, 1, … , M
• Each utility meets its own demand, PD1, … PDM:
P1,1  P1,2  ...  P1, N1  PD1
...
PM ,1  PM ,2  ...  PM , NM  PDM

61 Module-1, Part-1 ECE666: Winter 2021


Coordinated ELD… contd.

• All Generators Pool Dispatched to Minimize Pool Cost


• The condition for optimum can be written as:

dC ji
  j  1,..., M
dPji
i  (1,..., N1); (1,..., N 2 );...(1,..., N M )

N1  N 2 ...N M M
 Pi   PD j
i 1 j 1

62 Module-1, Part-1 ECE666: Winter 2021


Power Pools-3: Multi-area Joint Dispatch

• Central dispatcher coordinates generation dispatch


• Minimize total system cost

J   C ( Pi ,m )  i  1,..., NGm ; m  1,2,. ...., NU


m i

• k, m is the index for utility


• NU is the no. of utilities participating in the coordinated dispatch
• i is the index for generator
• NG is the no. of generators within one utility
• Transmission constraint (transportation model)- algebraic
sum of power at a node is zero

 Pi,m   Tk ,m  PDm
i k

Tk ,m  TkMax
,m

63 Module-1, Part-1 ECE666: Winter 2021


Multi-area Joint Dispatch… contd.

• Elaborate representation of transmission system is possible by


using dc power flow model
1
Tk ,m  ( k   m ) 
x k ,m
• Ideally an ac load flow is most accurate representation

• High m denotes large cost saving for system when PDm


reduces by 1 MW
• i.e. when utility m imports power from another utility

• k,m (associated with transmission constraint) is high when a


transaction between k and m reduces the system cost

64 Module-1, Part-1 ECE666: Winter 2021


Other Types of Utility-Interchanges

• Capacity interchange- agreement for peak reserve. No


energy transaction, except emergency
• Diversity interchange- energy transaction between utilities
with diversity in load curves
• Energy banking- transaction between utilities having
different generation types
• Emergency power interchange- to take care of forced
outages in one system
• Inadvertent interchange- due to error in controlling
interchange by automatic generation control

65 Module-1, Part-1 ECE666: Winter 2021


Some Important References

• Z. X. Liang and J. D. Glover, “Improved cost functions for economic dispatch computations”, IEEE
Transactions on Power Systems, May’91, pp.821-829.
• B. H. Chowdhury and S. Rehman, “A review of recent advances in economic dispatch”, IEEE
Transactions on Power Systems, Nov. ’90, pp. 1248-1259.
• H. H. Happ, “Optimal power dispatch- A comprehensive survey”, IEEE Transactions on Power
Apparatus and Systems, Vol.PAS-96, May / June 1977, pp.841-854.
• C. B. Somuah and N. Khunaizi, “Application of linear programming re-dispatch technique to
dynamic generation allocation”, IEEE Transactions on Power Systems, Feb.’90, pp. 20-26.
• G. Demartini, G. P. Granelli, P. Marannino, M. Montagna and M. Ricci, “Coordinated economic and
advance dispatch procedures”, IEEE Transactions on Power Systems, Nov. ’96, pp. 1785-1791.
• N. A. Chowdhury and R. Billinton, “Risk constrained economic load dispatch in interconnected
generating system”, IEEE Transactions on Power Systems, Nov.’90, pp.1239-1247.
• N. S. Rau and C. M. Necsulescu, “A model for economy energy exchanges in interconnected power
systems”, IEEE Transactions on Power Systems, Aug. ’89, pp. 1147-1153.
• L. Zhang, P. B. Luh, X. Guan and G. Merchel, “Optimization-based inter-utility power purchases”,
IEEE Transactions on Power Systems, May ’94, pp.891-897.
• F. N. Lee, “A new multi-area production costing method”, IEEE Transactions on Power Systems, Aug.
’88, pp. 915-922.
• K. W. Doty and P. L. McEntire, An analysis of electric power brokerage systems, IEEE Trans Power
Apparatus and Systems, Feb 1982
• G. Fahd, D. A. Richards and G. B. Sheble, The implementation of an energy brokerage system using
linear programming, IEEE Trans Power Systems, Feb ’92
• D. Chattopadhyay, An energy brokerage system with emission trading and allocation of cost
savings, IEEE Trans Power Systems, Nov’95

66 Module-1, Part-1 ECE666: Winter 2021

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