College of Electrical and Mechanical

Engineering
Department of Electrical Engineering

EE-863 : Power System Analysis

Lecture#2

Economic Operation of Power Systems

Instructor: Dr Sarmad Majeed Malik

1
 Problem
A 100 MVA, 33kV, 3-phase generator has a subtransient reluctance of
15%. The generator is connected to 3 motors through a transmission line
and transformers as shown in the single line diagram. Selecting the
generator ratings as the base quantities, determine the base quantities and
p.u. values in other parts of the system. Also draw the reactance diagram of
the system.
Solution
Solution
 Economic Operation
• Power generated at stations, transmitted, distributed and
utilized at user end
• DISCOs and GENCOs aim to minimize cost
• Major component of this cost is fuel cost
• Significant in thermal and nuclear power plants
• Thermal power plant
• Boiler, turbine, generator
 Generator operating cost of
thermal power unit
• Unit consists of a set of boiler, turbine and generator
• Fuel cost curve
• Below MWmin, operation is technically not feasible or
not economical
• Each unit at power system has its own cost curve
 Cost Curve
• Cost function 1
Ci  ai PGi2  bi PGi  d i
2

dCi
• Incremental cost  ai PGi  bi
dPGi
• If demand is PD and capacity of each unit is Pmax,i , then for
k
‘k’ units  Pmax,i  PD
i 1

• Constraint
PGi , min  PGi  PGi , max

• Operation at Pmax,i is not economical. Thus

k

P
i 1
Gi  PD
 Cost Curve
• Objective function k
min C   Ci PGi 
i 1
k
subject to P
i 1
Gi  PD  0
• Optimization Problem (multi-variable optimization with
equality constraints)
• No. of variables?
• How to solve this optimization problem?
 Lagrange Method
• Lagrange function
k
 k 
L( PGi )   Ci PGi      PGi  PD 
i 1  i 1 

• To solve this Lagrange function, we will use concept of

derivative
L Ci
0   (1  0)  0
PGi PGi
• Since Ci is only dependent on PGi( C1 is only dependent on
PG1 and not dependent on PG 2 ), we have:
Ci dCi
 
PGi dPGi
 Lagrange Method
• This gives coordination equation:
dC1 dC2 dCk
  .....  
dPG1 dPG 2 dPGk
• For optimal load dispatch, the incremental cost of each unit
should be same
• How to find λ?
• Assume initial value of λ (value should be greater than
the largest value of IC→ bi )
• Calculate various generations PGi (where i=1,2…..k)
dCi
 0
dPGi
‘k’ number of equations. We should ensure that units
are operating within limits.
 Langrange Method
• How to find λ?
k
• If P
ik1
Gi  PD   , stop iteration

• If P Gi  PD , increase λ. Else decrease λ.

i 1
• Continue iteration till total generation is equal to total
demand.
 Problem
Incremental fuel cost (in $/MWh) for a plant consisting of
two units of 100MW each are:
dC1
 0.012 PG1  2
dPG1
dC2
 0.015PG 2  1.5
dPG 2
The minimum load on each unit is 10MW and total load
to be supplied is 150MW. Determine the economic
operating schedule.
Solution
Solution
 Optimum load dispatch
considering transmission losses
• Suppose two identical generating units are connected as
shown.
• Same incremental cost
• For any load, using equal incremental cost criteria, we
conclude that load should be divided equally
• But unit 2 must provide additional power to makeup for
transmission losses
• More economical to load unit
1 more than unit 2.
 Optimum load dispatch
considering transmission losses
Objective function
k
Min C   Ci PGi 
i 1
subject to
k

P
i 1
Gi  PD  PL  0

Langrange function
k
 k 
L( PGi )   Ci PGi      PGi  PD  PL 
i 1  i 1 
L dCi PL
0   (1  0  )0
PGi dPGi PGi
dCi PL
  (1  )
dPGi PGi
 Optimum load dispatch
considering transmission losses
dCi
dPGi

 PL 
1  
 PGi 

dCi 1
 Li   Li 
dPGi  PL 
1  
 PGi 
where L is known as penalty factor at ‘i’th plant
1
• Can also be expressed as
Li  where ITL is
1  ITLi 
incremental transmission loss at ‘i’th plant
• Here λ is incremental cost of received power ($/MWh)
 Dependence of PL on PG using
B-Loss coefficients method k k
PL    PGm Bmn PGn
m 1 n 1
• Where PGm is generation at ‘mth’ plant and Bmn  Bnmis loss
coefficient which is constant under certain assumptions.
• In matrix form, we have
 PG1   B11 B12  B1k 
P  B B22  B2 k 
T
PL  P BPG
G , PG   G 2  , B   21
        
   
P
 Gt   Bk 1 Bk 2  Bkk 

• Considering a 3 plant system:

 B11 B12 B13   PG1 
PL  PG1 PG 2 PG 3  B21 B22 B23   PG 2 
 B31 B32 B33   PG 3 
 Dependence of PL on PG using
B-Loss coefficients method
PL  B11 PG21  B12 PG1 PG 2  B13 PG1 PG 3  B21 PG1 PG 2  B22 PG22  B23 PG 2 PG 3
 B31 PG1 PG 3  B32 PG 2 PG 3  B33 PG23

PL  B11 PG21  B22 PG22  B33 PG23  2 B12 PG1 PG 2  2 B13 PG1 PG 3  2 B23 PG 2 PG 3
• So, we have
PL   k k 
PGi
  
PGi  m 1 n 1
PGm Bmn PGn 

  k k k k

    PGm Bmn PGn   PGi Bin PGn   PGm Bmi PGi PGi Bii PGi 
PGi  m 1,m  i n 1, n  i n 1, n  i m 1, m  i 
• Total number of terms = k 2
2
• Total number of terms independent of Gi =
P ( k  1)

• So number of terms dependent on PGi = 2k  1

 Dependence of PL on PG using
B-Loss coefficients method
PL  k k

 0   Bin PGn   PGm Bmi  2 Bii PGi 
PGi  n 1, n  i m 1, m  i 

• So, incremental transmission loss can be expressed as:

PL k
  2 Bij PGj where j=1,2,……k
PGi j 1

• We know that dCi

 ai PGi  bi
dPGi

dCi PL
• And   (1  )
dPGi PGi
• Therefore,  k 
ai PGi  bi   1   2 Bij PGj 
 j 1 
Dependence of PL on PG using
B-Loss coefficients method
k
ai PGi  bi    2 Bij PGj  
j 1
k
 ai PGi  bi   2 Bii PGi   2 Bij PGj  
j 1
j i
k
 ( ai  2Bii ) PGi    bi    2 Bij PGj
j 1
j i

k
bi
1    2 Bij PGj
 j 1
j i
 PGi 
ai
(  2 Bii )

 Solving Economic Dispatch
considering transmission line losses
1. Assume suitable value of λ (should be greater than largest
value of bi)
2. Calculate PGj using simple incremental cost principle.
3. Solve the equation for PGi iteratively.
k
bi
1    2 Bij PGj
 j 1
j i
 PGi 
ai
(  2 Bii )

k k
4. Calculate PL   PGm Bmn PGn
m 1 n 1

5. If P
i 1
Gi  PD  PL  , stop iteration
 Solving Economic Dispatch
considering transmission line losses
k
• Else if  PGi  PD  PL  0 , then increase λ
i 1

k
• Else if P i 1
Gi  PD  PL  0
, then decrease λ
6. Then go to step 2
 Problem
• Determine the economic operating schedule of two plant
system to meet a load demand of 160MW.The incremental
fuel costs and loss coefficients of the two plants are given
below
dC1 dC2
 0.01PG1  2 $ / MWh  0.01PG 2  1.5 $ / MWh
dPG1 dPG 2

B11  0.0015 / MW , B12  B21  0.0005 / MW , B22  0.0025 / MW

Solution
Solution
Solution
Solution
 Problem
• The figure shows a two generator system supplying a load of
=PD40MW connected at bus 2. The fuel costs of generators
and are:G1 G2
C1 ( PG1 )  10000 $ / MWh
C2 ( PG 2 )  12500 $ / MWh
• The loss in the line is
Ploss ( pu )  0.5 PG21( pu )

• Where the loss coefficient is specified in pu on a 100MVA

base. Find the most economic power generation schedule.
Solution
Solution
 Problem
• The incremental costs of operating two generating units are
functions of their respective powers P1 and P2 in MW and
are given by
dC1
IC1   0.2 P1  50 , 20MW  P1  150MW
dP1
dC2
IC2   0.24 P2  40 , 20MW  P2  150MW
dP2

For a certain load demand, P1 and P2 have been chosen such

that IC1  76$ / MWhand IC2  68.8$ / MWh. If the generations
are rescheduled to minimize the total cost, then find
P2
Solution
 Problem
• Consider economic dispatch problem for a power plant
having two generating units.

C1 ( P1 )  0.01P 21 30 P1  10 , 100MW  P1  150 MW

C2 ( P2 )  0.05 P22  10 P2  10 , 100 MW  P2  180 MW

What is the incremental cost (in $/MWh) of the power plant

when it supplies 200MW power?
Solution
11 UNIT COMMITMENT
Economic dispatch gives the optimum schedule corresponding to one
particular load on the system. The total load in the power system varies
throughout the day and reaches different peak value from one day to another.
Different combination of generators, are to be connected in the system to meet
the varying load.

When the load increases, the utility has to decide in advance the sequence in
which the generator units are to be brought in. Similarly, when the load
decreases, the operating engineer need to know in advance the sequence in
which the generating units are to be shut down.

The problem of finding the order in which the units are to be brought in and the
order in which the units are to be shut down over a period of time, say one day,
so the total operating cost involved on that day is minimum, is known as Unit
Commitment (UC) problem. Thus UC problem is economic dispatch over a day.
The period considered may a week, month or a year.
But why is this problem in the operation of electric power system? Why not
just simply commit enough units to cover the maximum system load and leave
them running? Note that to “commit” means a generating unit is to be “turned
on”; that is, bring the unit up to speed, synchronize it to the system and make
it to deliver power to the network. “Commit enough units and leave them on
line” is one solution. However, it is quite expensive to run too many
generating units when the load is not large enough. As seen in previous
example, a great deal of money can be saved by turning units off
(decommiting them) when they are not needed.
Example 7
The following are data pertaining to three units in a plant. Unit 1: Min. =
150 MW; Max. = 600 MW
C1 = 5610 + 79.2 P1 + 0.01562 P 2 Rs / h
1

Unit 2: Min. = 100 MW; Max. = 400 MW

C2 = 3100 + 78.5 P2 + 0.0194 P 2 Rs / h
2

Unit 3: Min. = 50 MW; Max. = 200 MW

C3 = 936 + 95.64 P3 + 0.05784 P 2 Rs / h
3

What unit or combination of units should be used to supply a load of 550 MW

most economically?
Solution
To solve this problem, simply try all combination of three units.

Some combinations will be infeasible if the sum of all maximum

MW for the units committed is less than the load or if the sum of
all minimum MW for the units committed is greater than the load.

For each feasible combination, units will be dispatched using

equal incremental cost rule studied earlier. The results are
presented in the Table below.
 Unit Min Max
1 150 600
2 100 400
3 50 200

Unit 1 Unit 2 Unit 3 Min. Gen Max. Gen P1 P2 P3 Total cost

Off Off Off 0 0 Infeasible
On Off Off 150 600 550 0 0 53895
Off On Off 100 400 Infeasible
Off Off On 50 200 Infeasible
On On Off 250 1000 295 255 0 54712
Off On On 150 600 0 400 150 54188
On Off On 200 800 500 0 50 54978
On On On 300 1200 267 233 50 56176

Note that the least expensive way of meeting the load is not with all the three
units running, or any combination involving two units. Rather it is economical
to run unit one alone.
Example 8
Daily load curve to be met by a plant having three units is shown below.

1200
MW

500
MW

12 noon 4 pm 8 pm 2 am 6 am 12 noon

Data pertaining to the three units are the same in previous example.
Starting from the load of 1200 MW, taking steps of 50 MW find the shut-
down rule.
Solution
For each load starting from 1200 MW to 500 MW in steps of 50 MW, we simply
use a brute-force technique wherein all combinations of units will be tried as
in previous example. The results obtained are shown below.
Optimum combination
Load
Unit 1 Unit 2 Unit 3

1200 On On On
1150 On On On
1100 On On On
1050 On On On
1000 On On Off
950 On On Off
900 On On Off
850 On On Off
800 On On Off
750 On On Off
700 On On Off
650 On On Off
600 On Off Off
550 On Off Off
500 On Off Off
 Optimum combination
Load
Unit 1 Unit 2 Unit 3

1200 On On On
1150 On On On
1100 On On On
1050 On On On
1000 On On Off
950 On On Off
900 On On Off
850 On On Off
800 On On Off
750 On On Off
700 On On Off
650 On On Off
600 On Off Off
550 On Off Off
500 On Off Off

The shut-down rule is quite simple.

When load is above 1000 MW, run all three units; more than 600 MW and less than 1000
MW, run units 1 and 2; below 600 MW, run only unit 1.
12 PRIORITY- LIST METHOD
In this method the full load average production
cost of each unit is calculated first. Using this,
priority list is prepared.
Full load average
Production cost corresponding to full load
production of a unit 
Full load

Example 9

The following are data pertaining to three units in a plant.

Unit 1: Max. = 600 MW
2
C1 = 5610 + 79.2 P1 + 0.01562 P1
Rs / h
Unit 2:
Max. = 400 MW
2
C2 = 3100 + 78.5 P2 + 0.0194 P2
Unit 3: Rs / h
Max. = 200 MW
2
C3 = 936
Obtain the priority list+ 95.64 P3 + 0.05784 P3
Rs / h
Solution
Full load average
5610  79.2 x 600  0.01562 x 6002  97.922
production of a unit 1 
600

Full load average

3100  78.5 x 400  0.0194 x 4002  94.01
production of a unit 2 
400

Full load average

936  95.64 x 200  0.05784 x 2002  111.888
production of a unit 3 
200

A strict priority order for these units, based on the average production cost,
would order them as follows:

Unit Rs. / h Max. MW

2 94.01 400
1 97.922 600
3 111.888 200
The shutdown scheme would (ignoring min. up / down time, start – up
costs etc.) simply use the following combinations.

Combination Load PD
2+1+3 1000 MW ≤ PD < 1200
MW
2+1
2 400 MW ≤ PD < 1000
MW PD < 400 MW

Note that such a scheme would not give the same shut – down sequence
described in Example 7 wherein unit 2 was shut down at 600 MW leaving
unit 1. With the priority – list scheme both units would be held on until load
reached 400 MW, then unit 1 would be dropped.
 Unit Commitment
• Process of deciding when and which generating units at each power station to
start-up and shut-down
• Economic dispatch is the process of deciding what the individual power
outputs should be of the scheduled generating units at each time-point.
• Unit commitment table
• Dependent on total demand at every time instant
• Generally prepared by dynamic programming
• Corresponding to each demand
• Optimal combination of units
• Optimal loading on selected combination of units

FN (x) = Minimum cost of generating ‘x’ MW by ‘N’ units ($/h)

f N ( y ) = Cost of generating ‘x’ MW by ‘Nth’ unit

• So if ‘y’ MW is generated at ‘N’th unit then ‘x-y’ MW must be generated by

‘N-1’ units.
FN ( x )  min  f N ( y )  FN 1 ( x  y ) 
 Unit Commitment Table
• Can be prepared by having knowledge of:
• Number of units
• Characteristics of units
• Demand
• Increasing or decreasing generation at units is in fixed steps.
1
Ci  ai PGi2  bi PGi  d i
2
Unit MWmin MWmax ai bi di
1 1 13 1.0 24 8
2 1 11 1.5 26 3
= Minimum cost of generating ‘x’ MW by ‘N’ units ($/h)
3 1 12 2.0 29 5
= Cost of generating ‘x’ MW by ‘Nth’ unit
4 1 15 2.5 31 4
• So PD may vary from 1MW to 51MW.

• Suppose at any time instant, PD  8MW. How many units to operate? Which
units to operate? (Unit commitment)
 Unit Commitment Table
• If only one unit, then
1
F1 (8)  f1 (8)  ai PGi2  bi PGi  d i  232 ($ / h)
2
• So cost is 232 $/h if demand (8MW) is met by unit ‘1’ alone

• Now checking cost if demand is satisfied by two units.

F2 (8)  min  f 2 ( y )  F1 (8  y ) 
 f 2 (1)  F 1(7) ,  f 2 ( 2)  F 1(6) ,  f 2 (3)  F 1(5) ,  f 2 ( 4)  F 1(4) ,
 min  

 2f (5 )  F 1 ( 3 ) ,  f 2 ( 6)  F 1( 2 ) ,  f 2 ( 7 )  F 1(1)  
29.75  200.5, 58  170 , 87.75  140.5, 119  112 ,
 
 151.75  84 . 5 , 186  58 , 221 .75  32 .5  
 228 ($ / h)

• So for 228 ($/h), we can write

F2 (8)  min  f 2 ( y )  F1 (8  y )   f 2 ( 2)  F 1(6)
 Unit Commitment Table
• No need to check for combination of any other two units we we have already
obtained the minimum cost for two units.
1
F1 (8)  f1 (8)  ai PGi2  bi PGi  d i  232 ($ / h)
2
• Now checking cost if demand is satisfied by three units.

F3 (8)  min  f 3 ( y )  F2 (8  y ) 
 f 3 (1)  F 2(7) ,  f 3 ( 2)  F 2(6) ,  f 3 (3)  F 2(5) ,  f 3 ( 4)  F 2(4) ,
 min  
 f 3 (5)  F 2 (3) ,  f 3 ( 6)  F 2 ( 2) ,  f 3 ( 7 )  F 2 (1)  
Example of Unit Commitment
Table
Quiz
???
53