MODULE 2

ECONOMIC OPERATION OF POWER SYSTEMS

Economic Operations of Power Plants
 At the end of
Discuss economic
this lesson you operations of power
will be able to: plants.
A modern power system is invariably supplied by a number of
power plants. The purpose of economic operation of power
system is to reduce the operating cost of generation to the
minimum. The total generator operating cost includes fuel,
labour and maintenance costs. For simplicity fuel cost is the
only one considered to be variable.
The fuel cost is meaningful in case of thermal and nuclear
power plants. Hydro plants have negligible operating cost,
but are required to operate under constraint of availability of
water for hydro generation in a given period of time. It is,
however, unrealistic to neglect transmission losses
particularly when long distance transmission of power is
involved.
• The control engineer or the load dispatcher has to
consider a number of factors while interchanging energy
from one power station to another station—how much
energy to interchange, the cost of supplying energy to
interconnections, and the cost of energy received from the
interconnection.
• It is necessary to arrange the operation of each generating
unit on the system load curve every hour so as to reduce
production costs during the year to a minimum.
1. variation in fuel cost
2. labor cost
3. weather conditions
4. normal and emergency equipment ratings
5. reserve requirements
6. voltage limitations
7. characteristics of prime movers
8. transmission losses
• However, the major factor controlling the most desirable load
allocation between different generating units is the total
operating cost. The cost of fuel forms the major portion of the
variable cost of the power plant, and the aim of scheduling the
operation of generating units is to obtain minimum fuel cost.
• By economic load scheduling, we mean to determine the
generations of different power plants such that the total
operating cost is minimum, and at the same time the total
demand and losses at any instant is met by the total
generation.
There are several methods of loading the alternators. Of
course, the incremental loading, the most scientific and
rational method of operation of units, will always result in the
maximum operating efficiencies. In this method of loading,
the total system load is divided among the generating units
that all the units operate at equal incremental costs. The
order in which the units are brought into action depends on
the heat rates. Further, loading is adjusted by incremental
rates.
In this method, the different units are successively loaded to
capacity in the order of their efficiencies. Accordingly, all but
the most efficient unit are operated at minimum loads until
the most efficient one is loaded to capacity, and it is assumed
that arrangement would result in highest overall efficiency.
But such an assumption will be correct only if the division of
load is the same as that obtained by the incremental rate
method.
In this method, the various units are successively loaded to
their most efficient loads in the ascending order of their heat
rates. After that, all the units are loaded to capacity in the
same order.
In this method of loading, the units are loaded in proportion to
their capacities.
In this method, the units are loaded in proportion to their most
efficient loads. After the units are loaded up to their most
efficient loads, the additional load on each unit is made
proportional to the difference between the rated capacity and
the most efficient load.
• To compute economic load division between units, it is
necessary to express the operating costs in terms of
output.
• For the steam turbine, steam generator or steam station
as a whole, the diesel engine, or the gas turbine, the input
is expressed in of kJ per hour and the output or load in
MW. For hydro plant, the input will be in terms of m3/s of
water flow and output (or load) in MW.
The efficiency at any load can be measured by taking the
input from the input/output curve corresponding to the load.
The efficiency is
Heat rate is defined as the ratio of the input to the output.

Heat rate = Input/output in kilojoules per kWh

Within a power plant, a number of
ac generators operate in parallel.
For economic operation of the
plant, the total load must be
approximately shared by the
generating units. Because fuel
cost is the major factor in
determining economic operation,
curves like that of the given figure
are important to power-plant
operation.
Note in the graph that the
inverse slope of the curve at
any point is the fuel
efficiency of the generating
unit operating at that point.
Maximum fuel efficiency
occurs at the point at which
the line form the origin is
tangent to the curve.
Point A is such a point for a
unit having the input-output
characteristics.
An output of 250 MW
requires an input of
approximately 2.1x109 Btu/h.
or, we may say that the fuel
requirement is 8.4x106
Btu/MWh.
• In the input-output characteristic if input is expressed in
kJ/hour and output in MW, the slope of the curve gives
incremental fuel rate in kJ/MWh and if the input is
expressed in Pesos/Dollar per hour, the slope of the
curve gives incremental fuel cost in Pesos/MWh or
Dollars/MWh. Mostly incremental fuel cost is taken as the
incremental cost (IC) and forms the basis of load division.
• The incremental rate of a machine at any given output is
the rate of change of the input with respect to the output
i.e., the ratio of small change in input to a small change in
output is known as incremental rate of a machine.
• Numerically it is equal to the slope of the input/output
curve at a point corresponding to that output.
Mathematically, it is the first derivative of the input with
respect to the output.
• If the equation of the input-output curve is given in the
form of an algebraic equation, then, the incremental rate
can be easily determined by differentiating the equation
with respect to the output.
• The incremental rate can also be determined graphically,
from the input/output curve. Corresponding to a given
output, a point can be located on the curve. Then the
slope of the tangent to the curve through this point gives
the incremental rate at the given output.
Alternative method of determination of incremental rate is by
taking input values corresponding to the series of output
values from the input/output curve. The interval between two
consecutive values of the outputs should be small and
constant. The incremental rate is then calculated as the ratio
of the input difference to the output difference and it is
assumed to be a function of the mid-point.
The shapes of the heat rate
curve and the incremental rate
curve are shown. Here, the heat
rate curve and the incremental
rate curve are plotted on the
common coordinates. It is clear
that the two curves cross each
other at a point where heat rate
is minimum.
Two Generation Units:
Consider two turbo alternators operating in parallel and
sharing the load P1 and P2 and costing C1 and C2.
For most economical loading of alternator, total cost C should
be minimum. The condition for minimum total cost of
operation of two alternators is that incremental costs of two
alternators should be equal.
• The same conclusion can be arrived at through a qualitative
analysis. Let the two units operate at different incremental
costs. Let us transfer some load from the unit operating at
higher incremental cost to the unit operating at lower
incremental cost.
• Reduction of load on the unit with higher incremental cost will
mean a greater reduction in cost than the increase in cost
owing to the increase in load on the unit with lower incremental
cost. In the limiting case, when the distribution of load among
two units is such that both operate at the same incremental
cost, maximum economy will be achieved.
• It is not economical to operate all the units available all the
time. The unit commitment deals with the problem of
determination of a unit of generating power plant which
should operate for a particular load to minimize the
operating cost.
• The unit commitment problem is applicable to thermal
power plants only because for other types of generating
plants like hydro, the operating cost and start-up times are
negligible; therefore, their on-off status is not significant.
• A simple but an inaccurate method of solving unit commitment
problem is assignment of priority to the generating units such
that the most efficient unit is loaded first to be followed by the
most efficient unit from the remaining units as the load
increases.
• Another method of solving this problem is computation of most
economical operating cost for all the possible combinations of
the units and then selects that combination which has the least
operating cost among these. This method is very cumbersome
and highly time consuming.
Considerable computational savings can be achieved by
adopting some optimization techniques such as branch and
bounce or a dynamic programming method for arriving at
minimum operating cost combination as certain combinations
need not be tried at all in these methods.
Use the graph to find
the fuel requirements
for outputs of 100 MW.
Verify that point A is
probably the maximum
fuel-efficiency point.
Use the graph to find the fuel
requirements for outputs of 100
MW. Verify that point A is probably
the maximum fuel-efficiency point.

Solution: From the graph, at 100

MW output, the fuel input is
approximately 1x109 Btu/h.
Hence,
1𝑥10!
𝐹𝑢𝑒𝑙 𝑟𝑒𝑞𝑢𝑖𝑟𝑒𝑚𝑒𝑛𝑡 =
100
"
Fuel Requirement = 10𝑥10 𝐵𝑡𝑢/𝑀𝑊ℎ
A certain amount of coal
cost $1.20 and produces
106 Btu of energy as fuel for
a generating unit. If the
input-output characteristic of
the unit is that shown in the
given figure, determine the
incremental fuel cost at
point A.
A certain amount of coal cost $1.20 and
produces 106 Btu of energy as fuel for a
generating unit. If the input-output
characteristic of the unit is that shown in
the given figure, determine the incremental
fuel cost at point A.

Solution:
For maximum demand from a plant, determine how the load
should be shared by the two generating units for minimum
fuel cost, if the maximum load is given by P1+P2=100 and the
minimum fuel cost is given by 0.008P1 – 0.009P2 = -2.
For maximum demand from a plant, determine how the load
should be shared by the two generating units for minimum fuel
cost, if the maximum load is given by P1+P2=100 and the
minimum fuel cost is given by 0.008P1 – 0.009P2 = -2.

Solution: Solving P1 and P2. Substitute P1 =100 - P2 to 0.008P1 –

0.009P2 = -2 will yield:
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