EE 467

Power Systems Operation & Control

UNIT 5 – Maintaining Optimum Generation
Schedule – Economic Dispatch
Dr E. K. Anto
Jan 2014

kwakuantoh@yahoo.com//0208201565; 0243225858
 Learning Objectives
• Understand the concept of generator scheduling and optimum
dispatch
• Know some of the constraints considered in generator dispatch in a
power system operation
• Appreciate the conditions under which economic dispatch takes
place both in
➢a generating plant (dispatch amongst the units) and
➢in power system as a whole (dispatch amongst the plants)
• Gain an understanding of the application of Lagrange Method of
optimization in generator scheduling
• Know how to apply constraints to be able to solve some examples
of generator scheduling and economic dispatch
2
 •Start of UNIT 5

3
 5.1: Introduction
• A number of power plants are connected in parallel to supply
the system load by interconnection of generating stations.

• With the development of grid system, it becomes necessary to

operate the plant units most economically.

• The economic generation scheduling problem involves two

separate steps, namely,
➢Unit commitment and
➢Online economic dispatch

4
 5.1.1: Unit Commitment
Unit commitment is the allocation or apportioning of
demand/load amongst the generation units such that:

1. Selected units will be able to supply the anticipated load of the

system over a required period of time
2. The generation must be at minimum cost as well as
3. Provision of a specified reserve margin is assured

5
 5.1.2: Objective of Optimum Generation Scheduling
• The objective of optimum generation scheduling for thermal
power plants is to

➢Allocate the generation to each and every units in a plant for a

given load, such that fuel cost is minimum, and subject to
constraints (which could be equality or inequality.)

6
 •Cost Types

7
 5.1.3: Cost Types – fixed and variable
• Fixed costs:
i. capital investment
ii. interest charges on borrowed money
iii. labour costs and salary given to staff
iv. taxes and
v. other expenses that continue irrespective of the load on the power
system
• Variable costs – depend on operation and maintenance (O&M), and
are affected by
i. mechanical input (fuel or water) loading rates for the different generating units
ii. generation mix, i.e., combination of conventional hydro and thermal and
other energy sources to meet daily load requirements and
iii. control of losses caused by reactive flows
8 iv. purchase or sale of power.
 •Generation Constraints

9
 5.1.4: Constraints

i. Primary constraints
ii. Secondary constraints
iii. Dynamic constraints
iv. Spare capacity constraints
v. Thermal constraints of the transmission line
vi. Bus voltage and angle constraints and
vii. Operational constraints

10
 5.1.4.1: Primary constraints
• The primary constraints arise out of the necessity for the system to
balance the load demand and generation at a bus
• They’re also called EQUALITY CONSTRAINTS.
• If PGi and QGi are the scheduled electrical generations
• If PDi and QDi are the respective load demands
• The following equations must be satisfied at the load bus.
PGi − PDi − Pline = M i = 0 QGi − QDi − Qline = N i = 0

• The power flows to neighbouring systems are

Pline =  ViV j Yij cos( ij −  ij ) Qline =  ViV j Yij sin ( ij −  ij )
N N

j =1 j =1

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 5.1.4.2: Secondary constraints
• The secondary constraints arise due to physical and operational
limitations of the respective units and components

• They’re also known as INEQUALITY CONSTRAINTS.

Pi min  Pi  Pi max , i = 1, 2, .......N P

Qi min  Qi  Qi max , i = 1, 2, .......N Q

• NP and NQ are number of real and reactive sources

12
 5.1.4.3: Dynamic constraints
• Dynamic constraints arise when fast changes in generation are
required for picking up the increasing load demand.

• For active power constraints

dPi (t ) dPi (t ) dP (t )
  i
dt min dt dt max

• For reactive power constraints

dQi (t ) dQi (t ) dQi (t )
 
dt min dt dt max

13
 5.1.4.4: Spare capacity constraints
• In this constraint, the total generation available at any time
should be in excess of the total anticipated load demand and
any system loss by an amount not less than a specified minimum
spare capacity Psps

• Thus,

Pig   (Pline + Psps + PDi )

N

i =1

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 5.1.4.5: Thermal constraints of transmission lines
• These constraints arise when power injection or power
withdrawal is such that the maximum allowable heat on the line
is not exceeded.

• This is referred to as the thermal stability limit of the line

15
5.1.4.6: Bus voltage and angle constraints
• These constraints arise in order to maintain voltage profile at
load bus and limit the overload capacity
• Hence
Vi min  Vi  Vi max , i = 1, 2, ..........N
 ij min   i   ij max , j  1, j = 2, 3, ..........M

• N=number of units;
• M=number of loads
5.1.4.7: Operational constraints
• These relate to constraints that arise with the general operation
of the system components

• For instance, in case the transformer tap position needs to be

included for optimisation, the tap position “ a i ” should lie within
the range available in the transformer.

• Thus ai min  ai  ai max

 •Optimization Problem

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5.1.5: Optimization Problem
• In a power system, a certain load demand can be met in an
infinite number of ways,

• But the objective is to meet the power requirement in the most

economic manner.

• As demonstrations, and to better appreciate the optimization

issues, let us consider a few load flows scenarios / examples for
a SIMPLE, hypothetical two-bus system.
 5.1.5.1: Optimization Scenario 1
• Example 1:

➢Two generators G1 and G2 share the load of 500 MW(200+300)

➢To supplement the 300 MW load demand at bus 2, the 100 MW
is delivered to Bus 2 from G2 via the line.
➢Per the load flow analysis, the losses amount to 2 MW
➢NOTE: also that power balance exists at each bus
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5.1.5.2: Optimization Scenario 2
• Example 2:(load on Bus 2 increases by 50 MW from 300 MW to 350
MW.)

➢G1 is made to solely take up the extra load on Bus 2

➢The added line power causes the new line losses to amount to 5 MW
➢From 2 MW (Example 1) to 5 MW, representing an increase of 3 MW
5.1.5.3: Optimization Scenario 3
• Example 3:(let generator G2 assume 20 MW of the added load)

➢In this case, G2 is made to partake of the needed generation to meet extra load of 50
MW
➢The line losses now amount to 3 MW, (compare the 5 MW losses in Example 2).
➢The overall costs will be minimized at some appropriately chosen load division
between G1 and G2.
NOTE: There generally exists ONLY ONE power generation CONFIGURATION that is
OPTIMUM in terms of (i) system losses and (ii) cost minimization
 •Input-Output Cost Curves
For Two Thermal Units

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 5.2 Input-Output cost curves for 2 thermal units
• Consider the input-output (cost/MW) curves of 2 thermal units
operating to share load.

• It can be seen that,

➢The no-load fuel cost for Unit B is greater than that of Unit A,
➢At loads above 40 MW, fuel input costs for Unit B is less than Unit A.
➢At loads below 40 MW, fuel input costs for Unit A is less than Unit B
• NOTE: Ideal generation from minimum cost perspective is thus 40 MW
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 •Economic Power Dispatch
Within a POWER PLANT
(Use of Lagrange Optimization Method)

25
 5.3: Economic Power Dispatch for 2 units Within a
Power Pant
• To determine the economic distribution (dispatch) of load
between the various units, the variable operating costs of the
unit must be expressed in terms of the power output

• Consider two alternators A and B of identical speed-load

characteristics working in parallel to share the total load on the
system.

• Let the load shared by (or generated at the outputs of) the two
alternators be respectively Pa , out and Pb, out

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 5.3: Economic Power Dispatch for 2 units Within a
Power Plant (2)
• For economic dispatch between the two units in a plant, the
known Lagrange condition to be satisfied is that:

➢The incremental fuel rates of the two alternators must be equal,

that is,
d F a ,in d F b,in
=
d P a,out d Pb,out

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 5.4: Economic Power Dispatch for N units Within a
Power Plant – Use of Lagrange Multiplier 
• For N units within a power plant, we apply the method of
Lagrange Multiplier 

• For economic allocation of load amongst N plant outputs, all

units must operate at the same incremental fuel cost plant

• Mathematically,
dF1 dF2 dF3 dFN
= = = ....... , = =
dP1 dP2 dP3 dPN

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 5.4: Economic Power Dispatch for N units Within a
Power Plant – Use of Lagrange Multiplier  (2)
• Example 4.1:
• The incremental fuel costs in dollars per MW for a plant
consisting of two units are given by:
dF1 dF2
= 0.0080P1 + 8.0 = 0.0096P2 + 6.4
dP1 dP2
• Determine the following:
i. economic distribution of load between the units for plant
output of 1000 MW, and
ii. the corresponding incremental fuel cost of the plant.

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 5.4: Economic Power Dispatch for N units Within a
Power Plant – Use of Lagrange Multiplier  (3)
• Solution 4.1:
• For economic distribution of a total load of 1000 MW between
the 2 units, their incremental costs must be the same.
P1 + P2 = 1000 and
0.0080P1 + 8.0 = 0.0096P2 + 6.4
= 0.0096(1000 − P1 ) + 6.4
Solving
P1 = 454.55 MW
P2 = 545.45 MW

and upon substitution

 plant = 11.636 dollars / MW
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 5.4: Economic Power Dispatch for N units Within a
Power Plant – Use of Lagrange Multiplier  (4)
• Example 4.2:
Incremental fuel costs in dollars per MW for a plant consisting of two
units are given by:

Assume that both units are operating at all times, that total load
varies from 250 MW to 1250 MW, and that the maximum load and
minimum load on each unit are to be 625 MW and 100 MW,
respectively. Find the
a) incremental fuel cost allocation of load between the units for the minimum
cost of various total loads
b) economic distribution of load between the units for plant output of 1000 MW

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 5.4: Economic Power Dispatch for N units Within a
Power Plant – Use of Lagrange Multiplier  (5)
• Solution 4.2 (a):
• At light loads, Unit 1 will operate at its lower limit of 100 MW and
have the higher incremental fuel cost given as

• When the output of Unit 2 is also 100 MW, the incremental cost for
Unit 2 is

• NOTES:
i. The different incremental costs would lead to UNECONOMIC operation.
ii. Moreover, the total minimum output from the plants would be (100 MW +
100 MW) or 200 MW, which is far from the minimum load demand of 250
MW, and this would also create frequency problems.
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 5.4: Economic Power Dispatch for N units Within a
Power Plant – Use of Lagrange Multiplier  (6)
• Solution 4.2 (a)(2):
NOTES (CONTINUED):
iii. As the plant output increases, the additional load must come from Unit 2
until its incremental cost is 8.80 dollars/MW, so that economic power
dispatch will be attained.
iv. Until the point is reached when the incremental costs are equal, the
incremental fuel cost plant of the plant is determined by Unit 2 alone.

• When the plant load is 250 MW, Unit 1 will still be delivering its minimum of
100 MW and Unit 2 will have to supply the difference of 150 MW, with
incremental cost of

• This value of 7.84 dollars/MW of Plant 2 is still less than the incremental fuel
cost of 8.80 dollars/MW of Plant 1,
• And this will make the operation of the plant UNECONOMICAL.
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 5.4: Economic Power Dispatch for N units Within a
Power Plant – Use of Lagrange Multiplier  (7)
• Solution 4.2 (a)(3):
NOTES (CONTINUED):
v. For the incremental cost of Unit 2 to equal 8.80 dollars/MW,

vi. And so the total plant output will be (100 + 250) or 350 MW.
vii. This means that given the incremental fuel costs of the two units of
the plant and the conditions attached, the plant can only operate
economically or optimally WHEN IT SUPPLIES A MINIMUM LOAD of
350 MW.
viii. And so as the question stands, it will be UNECONOMICAL for the
plant to supply a demand whose minimum is as low as 250 MW.
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 5.4: Economic Power Dispatch for N units Within a
Power Plant – Use of Lagrange Multiplier  (8)
• Solution 4.2 (a)(4):
The Table below summarizes the scenarios given above.
Minimum Load demand PD
250 MW 250 MW 250 MW 350 MW
Unit 1 P1 100 100 150 100
1 8.80 8.80 9.20 8.80
Unit 2 P2 100 150 100 250
2 7.36 7.84 7.36 8.80
Ptotal P1 + P2  PD P1 + P2 = PD P1 + P2 = PD P1 + P2 = PD
(frequency (no frequency (no frequency (frequency will
problem) problem) problem) be maintained)
 1   2 1   2 1   2 1 =  2
(uneconomical) (uneconomical) (uneconomical) (economical)
acceptable
Remarks unacceptable unacceptable unacceptable economic load
generation generation generation dispatch, but
minimum load
demand of 350
MW must be
guaranteed

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 5.4: Economic Power Dispatch for N units Within a
Power Plant – Use of Lagrange Multiplier  (9)
• Solution 4.2 (a)(5):
The required output of each unit for ECONOMIC or optimum load
distribution is found by assuming various values of plant and calculating
each unit’s output and the total plant output. Typical results are shown
in Table below.
Plant Unit 1 Unit 2 Plant Load
plant P1 P2 P1 + P2
(dollars/MW) (MW) (MW) (MW)
7.84 100 150 250
8.80 100 250 350
9.60 200 333 533
10.40 300 417 717
11.20 400 500 900
12.00 500 583 1083
12.40 550 625 1175
13.00 625 625 1250
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 5.4: Economic Power Dispatch for N units Within a
Power Plant – Use of Lagrange Multiplier  (10)
• Solution 4.2 (a)(6):
NOTES (CONTINUED):
ix. From the Table above, at plant = 12.4 dollars/MW, Unit 2 is
operating at its upper limit of 625 MW,

x. And so any additional load (say 625 MW) must come from Unit 1
alone, whose then determines the plant incremental cost plant.

xi. Thus for the additional 625 MW (after Unit 2 has reached its
upper limit) is as calculated:

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 5.4: Economic Power Dispatch for N units Within a
Power Plant – Use of Lagrange Multiplier  (11)
• Solution 4.2 (b):
(b) For economic distribution of a total load of 1000 MW between the
2 units, their incremental costs must be the same.
Thus:

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 •UNECONOMIC (Arbitrary) Power
Dispatch
Within a POWER PLANT

39
 5.5: Uneconomic Power Dispatch – With Arbitrary
Loading
• Example 5:
Determine the net fuel cost in dollars per hour for the arbitrary distribution of
a total load of 900 MW between the two units of the plant described in
Example 4, assuming the generations were equally distributed for the same
total load.
Solution 5: (NOTES)
i. Example 4 showed that for the most economic distribution of a 900 MW
load, Unit 1 should supply 400 MW and Unit 2 should supply 500 MW, and
the incremental cost for the plant was 11.20 dollars/MWh.
ii. And so, if the load is Shared Equally so that each unit supplies 450 MW, it
will tantamount to arbitrary loading, and hence UNECONOMIC.
iii. The increase in cost for Unit 1 (having to supply 450 MW instead of the
economical loading of 400 MW) is found by integrating the expression
for the incremental fuel cost for Unit 1.
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 5.5: Uneconomic Power Dispatch – With Arbitrary
Loading (2)
• Solution 5 (2):

iv. Similarly for Unit 2 (having to supply 450 MW instead of the economical
loading of 500 MW), the decrease in cost is found by integrating the
expression for the incremental fuel cost for Unit 2. Thus

v. The negative sign indicates a decrease in cost, as we expect for a

decrease in output for Unit 2 from 500 MW to 450 MW.

vi. The net cost is dF = dF1 + dF2 = [(+570) + (–548)] = 22 dollars/h, or 192,720
dollars per year, positive value meaning an INCREASE IN COST.
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 •Economic Power Dispatch
Within a POWER SYSTEM
(Transmission losses are factored and
optimized)

42
 5.6 Dispatch of N generators Within a Power System
– factoring transmission losses
• In dispatching for an entire power system, the following must
be noted:
➢we allocate the generations amongst plants (and NOT units)
➢we must factor the transmission losses

• Again applying Lagrange’s optimization methods, the

condition for optimum dispatch is that:
➢The incremental fuel cost of each plant multiplied by its penalty
factor is the same for all plants in the system.

43
 5.6 Dispatch of N generators Within a Power System
– factoring transmission losses (2)
• Mathematically,
dFk
 Lk =  system
dPk
dF1 dF2 dFk
  L1 =  L2 = ............  Lk =  system
dP1 dP2 dPk

• Where L k is the penalty factor that takes account of the

transmission losses, and is given as
1 1
Lk = =
1 − (Ploss / Pk ) 1 − loss factor
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 5.6 Dispatch of N generators Within a Power System
– factoring transmission losses (3)
• Example 6:
• A power system consists of two plants connected by a transmission
line. The only load is located at Plant 2. When 200 MW is transmitted
from Plant 1 to Plant 2, the power loss in the line is 16 MW. Find the
➢required generation for each plant and
➢power received by the load when incremental fuel cost  for the
system is $12.50/MWh.
• Assume that the incremental fuel costs can be approximated for the
following equation
dF1 dF2
= 0.010P1 + 8.5 and = 0.015P2 + 9.5
dP1 dP2

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 5.6 Dispatch of N generators Within a Power System
– factoring transmission losses (4)
• Solution 6:
• For a two-plant system, the transmission loss is given as
Ploss = P12 B11 + 2 P1P2 B12 + P2 2 B22

• Since all the load is directly at Plant 2 bus, varying P2 cannot affect
the transmission loss

• In other words, the transmission line loss components is contributed

to only by the power flow from Plant 1

• Thus B22 = 0 and B12 = 0

46
 5.6 Dispatch of N generators Within a Power System
– factoring transmission losses (5)
• Solution 6 (2):
• When P1 = 200 MW , Ploss = 16 MW and so
16 = 200 2 B11 + 0 + 0

 B11 = 0.0004 MW −1

Ploss
• And = 2 P1 B11 + 2 P2 B12 = 2 P1 (0.0004) + (2  P2  0) = 0.0008P1
P1

Ploss
= 2 P2 B22 + 2 P1 B12 = (2  P2  0) = 0
P2
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 5.6 Dispatch of N generators Within a Power System
– factoring transmission losses (6)
• Solution 6 (3):
• The penalty factors are calculated as:
1 1
L1 = =
1 − Ploss / P1 1 − 0.0008P1

1 1
L2 = = = 1.0
1 − Ploss / P2 1− 0

• For the most economic loading such that the system system =$12.5/MWh
dF1 1
L1 =   (0.010P1 + 8.5)  = 12.5  P1 = 200 MW
dP1 (1 − 0.0008P1 )

dF2
L2 =   (0.015P2 + 9.5)  (1.0) = 12.5  P2 = 200 MW
dP2
48
 5.6 Dispatch of N generators Within a Power System
– factoring transmission losses (6)
• Solution 6 (4):
• RESULT: Economic load dispatching therefore requires P1 = P2 = 200 MW,
i.e., in this particular case, equal division of load between the two
plants for system = $12.5/MWh.

• The transmission power loss is

Ploss = P1 B11 + 2 P1 P2 B12 + P2 B22 = 200 2 (0.0004 ) + 0 + 0 = 16 MW
2 2

• The supplied load is

PL = P1 + P2 − Ploss = 200 + 200 − 16 = 384 MW

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 •SELF ASSESSMENT

50
 5.7 SELF ASSESSMENT
Q1) The incremental fuel costs in $/MWh for a plant consisting of two
units can be approximated by the following equations:
dF1 dF2
= 0.20P1 + 40.0 and = 0.25P2 + 30.0
dP1 dP2

• If both units are operating at all times and sharing a total load of 150
MW
i. what is the optimum allocation of the generation among the two
units
ii. what is the corresponding value of the plant incremental fuel
cost λ
iii. Should the load be shared equally between the two units,
comment on the change in annual fuel cost.
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 5.7 SELF ASSESSMENT (2)
Q2)Explain the term “economic power dispatch”. What conditions must
be met for economic load distribution between
i. plants in a power system
ii. generating units in a plant

Q3) The fuel cost functions (in units/MW) for each of the two generators
shown in the 2-bus system of the Fig below are:

The two units share a total load of 500 MW. Assuming the total system
losses amount 15 MW, and the transmission line loss equation is
. Determine
i. economic generation allocations to the generators
ii. actual transmission line loss at those optimum generations
iii. corresponding total fuel cost.
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 Thank You – End of Unit 5

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Jan 2014