Electric Energy System Analysis I

25753
ECONOMIC DISPATCH

Mehdi Vakilian
Dec. 2023
 Power System Economic Dispatch
• Contents:
1. Operational objectives
2. Economic dispatch
3. Recent developments in power system
operations
• References:
Glover & Sarma, 3rd ed., 2002, pp.525-540
Wood & Wollenberg, 2nd ed., 1996, pp.29-79
 Economic Dispatch
• INTRODUCTION
• Engineering decision making about:
• power system operation
• How to operate installed equipment
• Compare to:
►Power system planning
 Decision making about installation of
new plant
 Economic Dispatch
• 1. OPERATIONAL OBJECTIVES
• 1.1 Economy
• Minimize cost of running the system
• Costs = (fixed costs) + (variable costs)
• Fixed costs: not affected by operation of
plant
e.g. capital repayment
• Variable costs:function of how plant is operated
e.g. generator fuel cost, variable maintenance
 Economic Dispatch
• Operations decisions ignore fixed costs
• Costs = (supply side costs) + (demand side
costs)
Ideally:
- minimize both supply & demand side costs
Traditional practice (but see later)
- treat demand side as load (externally
determined)
- minimize generator variable costs
 Economic Dispatch
2. ECONOMIC DISPATCH
2.1 Problem STATEMENT & ASSUMPTIONS
- Distribute real power loads between
generators to minimize variable costs
ASSUMPTIONS:
(a) Ignore transmission constraints (usually)
(b) Ignore transmission losses (sometimes)
- Thus transmission system is modeled as
single bus
- Power flow model → energy balance equation
 Economic Dispatch
• Figure shows operating cost Ci of a fossil fuel
generating unit versus real power output Pi
• Fuel cost is major portion of variable cost

• Figure 1:
 Economic Dispatch
• The costs that are function of unit output (and
are controlled by operating strategy) enter in to
economic dispatch formulation
• in practice Ci is constructed of piecewise
continuous functions valid for ranges of output
Pi
• Discontinuities in last figure may be due to firing
of equipment such as additional boilers or
condensers as power output is increased
• Often convenient to express Ci in terms of
BTU/hr which is relatively constant over the life
time of unit rather than $/hr which can change
daily or monthly
 Economic Dispatch
• Assume N generators  n  1,..., N  and for
generator n :
Pn = real power output (MW )
Pnmax = maximum power output (MW)
Pnmin = minimum power output (MW)
Cn  Pn  = variable cost rate ($/hr)

Demand side model:

D = total system demand for electrical energy
 Economic Dispatch
• POWER SYSTEM Equivalent Diagram:
P1
gen.1 System model:
D
P1  ...  Pn  ...  PN  D
Pn or
gen.n
P1  ...  Pn  ...  PN  D  L

PN where
gen.N L = transmission losses (MW)

• Generator model:
min max
- operating limits: n
P  Pn  Pn

- variable cost: Cn  Pn 
 Economic Dispatch
• Variable cost models:
Cn  Pn 
Cn is often approximated
by a piecewise linear
function Pn
Pnmin Pnmax

Cn is sometimes Cn  Pn 
approximated by a
quadratic function:
Cn  Pn    n   n Pn   n Pn2 Pn
Pnmin Pnmax
 Economic Dispatch
• Economic dispatch problem
(ignore transmission losses):
• Minimize: C1  P1   ...  Cn  Pn   ...  CN  PN 
• Subject to: P1  ...  Pn  ...  PN  D
Pnmin  Pn  Pnmax for n  1,..., N
• 2.2 Solving the economic dispatch problem
• 2.2.1 Ignore generator operating limits
• minimize: C1  P1   ...  Cn  Pn   ...  CN  PN 
• subject to: P1  ...  Pn  ...  PN  D
 Power System Economic Dispatch
• solution: Lagrange conditions
• i.e. there exists  , P1 ,..., PN such that:
C
•    0 for
n
n  1,..., N
Pn

• P1  ...  Pn  ...  PN  D
• note: (N+1) equations and (N+1) unknowns
• proof: problem is equivalent to :
• minimize : F  P1 ,..., PN 1 
• where: F  C1  P1   ...  CN 1  PN 1   CN  D  P1  ...  PN 1 
F C C
0  n
0 N
• Thus: P n P P
n n for n  1,..., N  1
 Power System Economic Dispatch
• Interpretation of Lagrange multiplier λ
• let : S  D   min C1  D1   ...  C N  DN  : P1  ...  PN  D
• = minimum system cost to supply load D
S cost of supplying D increase in load
• Then:  
D D
 $ / hr 
= system marginal cost   $ / MWh 
 MW 

• Justification:
• let : P1 ,..., PN solve S  D  with multiplier λ
• Let: P1   P1 ,..., PN   PN solve S D   D
 Power System Economic Dispatch
• Then for  D small :
S  D   D   S  D   C1  P1   P1   ...  CN  PN   PN 
C1  P1   ...  C N  PN 
C1 C N
  P1  ...   PN
P1 PN
  . P1  ...   . PN    P1  ...   PN    . D
S ( D  D )  S ( D )
• i.e.: D


• Interpretation of economic dispatch result:

• optimal economic dispatch if:
individual generator system
=
incremental cost marginal cost
 Power System Economic Dispatch

• Heuristic justification (2 generators – can be generalized)

• suppose it is not true (and argue for a contradiction)
• then one generator has higher incremental
cost
• without loss of generality: P1  P2  D
C1 C2
•  and
P1 P2
• Consider a small increase to P1 of size δP
• And a small decrease to P2 of size δP
• (so that  P1   P    P2   P   D ) then → next
 Power System Economic Dispatch
• then: C1  P1   P   C2  P2   P   C1  P1   C2  P2 
C1 C2  C1 C2 
 P P   P  0
P1 P2  P1 P2 
• i.e. for a small change in dispatch, can reduce
costs
• thus if generator incremental costs are not
equal can change dispatch to reduce total costs
by shifting load to a generator with lower
incremental costs
 Power System Economic Dispatch
• 2.2.2: include generator operating limits
minimize: C1  P1   ...  C N  PN 
subject to : P1  ...  PN  D
P1
min
 P1  P
1
max


P  PN  P
min
N
max
N
• optimal dispatch condition:

P1  ...  PN  D
and
• there exists λ such that for each generator :
 Power System Economic Dispatch
Cn Pn  Pnmin
• either:  and
Pn
Cn Pnmin  Pn  Pnmax
• or  and
P
• or Cnn Pn  Pnmax
 and
Pn
• Proof: by Kuhn-Tucker conditions :(Wood & Wollenberg )
• Justification: (realizing three possibilities)
P
►if n  Pn
min
at economic dispatch then:
– increasing Gen. n output will increase total system costs
– i.e. (gen. n incremental cost) > (system marginal cost)
– or Cn Pn  
 Power System Economic Dispatch
►If Pn  Pnmax at economic dispatch then:
– decreasing Gen. n output will increase total system costs
– i.e. (gen. n incremental cost) < (system marginal cost)
– or Cn Pn  

►If nP min
 Pn  Pn
max
at economic dispatch then:
- changing gen. n output will increase total system costs
- i.e. (gen. n incremental cost) = (system marginal cost)
- or Cn Pn  
i.e. if one or more units reach their limit values, then these units are held at
their limits and the remaining units operate at equal incremental cost λ.
 Examples
Economic Dispatch
• For Figure 1, the minimum incremental cost as
shown in Figure below, occur at 600 MW
production
 Examples
Economic Dispatch
• Since at this point heat rate is C/P=9000
BTU/kWhr
• And Efficiency is :

%efficiency = (1/9000) x (3413 BTU/kWhr) x

100 =37.92 %
 Examples
Economic Dispatch
• An area of an interconnected power system has two
fossil-fuel units operating on economic dispatch
• Variable operating costs of these units given by:
• C1=10 P1+ 0.008 P1^2 $/hr
• C2= 8 P2 + 0.009 P2^2 $/hr
• P1 and P2 in MW
• (a) Determine power output of each unit
• (b) Incremental operating cost
• (c) Total operating cost CT that minimizes as total load
demand PT varies from 500 to 1500 MW
 Examples
Economic Dispatch
• Incremental operating costs of units:
dC1/dP1 = 10 + 0.016 P1 $/MWhr
dC2/dP2= 8 + 0.018 P2 $/MW hr
• Min. total operating cost occurs:
dC1/dP1 = 10 + 0.016 P1 $/MWhr= dC2/dP2=
8 + 0.018 P2 $/MW hr
P2=PT- P1
• 10 + 0.016 P1 $/MWhr=
8 + 0.018 (PT- P1 ) $/MW hr
 P1 = [0.018 PT -2] / [0.034] = 0.5294 PT -58.82 MW
• dC1/dP1 = dC2/dP2 = 10 + 0.016 P1 =
10 + 0.016 (0.5294 PT -58.82) =
9.0582 +0.0084704PT $/MWhr
• minimum total operating cost:
CT=C1+C2 = (10 P1 + 0.08 P1^2)+(8P2+0.009 P2^2) $/hr
 Examples
Economic Dispatch
• Economic dispatch solution: PT =500-1500 MW
 Power System Economic Dispatch
Example 2
• 2.3 Simple example G1
500 MW C1  P1   20 P1 $/hr 0  P1  500 MW
• Data: 20 $/MWh
G2
D
1000 MW C2  P2   50 P2 $/hr 0  P2  1000MW
50 $/MWh
G3
1000 MW C3  P3   70 P3 $/hr 0  P3  1000 MW
70 $/MWh

($/MWh)
60

40

20
• Solution:
1000 2000 3000
D (MW)
Power System Economic Dispatch
Example 3
• Incremental fuel costs in dollars per MWh for a plant
consisting two units are:
dF1 dF2
 0.0080 P1  8.0  0.0096 P2  6.4
dP1 dP2
• Assume that both units operating at all times, that
total load varies from 250 to 1250 MW, and max. &
min. loads on each unit are 625 and 100 MW. ,
respectively
• Find incremental fuel cost & the allocation of load
between units for minimum cost of various total loads
Power System Economic Dispatch
Example 3
• At light loads unit 1 have higher incremental fuel cost &
will operate at its lower limit of 100 MW for which =
$8.8/MWh dF
1
dP
• unit 2 O/P is also 100 MW,
1
=$7.36/MWh
2dF
dP
• therefore as plant O/P increases additional load should
2

come from unit 2 until dF2/dP2=8.8

• Until that point ; incremental fuel cost λ of plant
determined by unit 2 alone
• when plant load 250 MW, unit 2 supply 150 MW with
dF2/dP2=$7.84/MWh
 Power System Economic Dispatch
Example 3
• When dF2/dP2=$8.8/MWh
• 0.0096P2+6.4=8.8P2= 2.4/(0.0096)=250 MW
• And the total plant output is 350 MW
• From this point on required O/P of each unit for economic load
distribution is found by various λ
• & calculating each unit’s O/P & total plant O/P
λ ($/MWh) P1 (MW) P2 (MW) P1+P2
7.84 100 150 250
8.8 100 250 350
9.6 200 333 533
10.4 300 417 717
11.2 400 500 900
12.0 500 583 1083
12.4 550 625 1175
13.0 625 625 1250
Power System Economic Dispatch
Example 3
• Incremental fuel cost:
• for a total O/P of 1000 MW
• 0.008P1+8.0=0.0096(1000-P1)+6.4
 P1=454.55MW,P2=545.45 MW ,
λ=11.636
•
 Power System Economic Dispatch
Example 3
• Saving effect of economic dispatch of load rather than some
arbitrary distribution
• Determine saving in fuel cost in $/hr for economic dispatch of
last example for total load of 900 MW
• Unit 1 should supply 400 MW, unit 2 500 MW
• Compare when each unit supplies 450 MW
• 450 450
 (0.008P1  8)dP1  0.004 P1  8P1  $570 / hr
2
400 400
450 450
500 (0increase
.0096 P1  6.4$570-$548=$22
)dP1  0.0048P  6.4/P1hr  $548 / hr
2
• net 1 400

• savings for whole year: $ 192,720

 Power System Economic Dispatch
Transmission Loss
• Transmission Loss as a function of Plant Gen.
• losses in transmission from plant with lower
incremental cost may be so great that:
economy may dictate lowering load at plant
with lower incremental cost & increasing it at
plant with higher incremental cost
• To coordinate transmission loss in determining
economic loading of plants, total transmission loss
should be expressed as function of plant loadings
 Power System Economic Dispatch
Transmission Loss
• Transmission loss in a simple system
• Ra, Rb, Rc resistances
of lines a, b, and c
total loss in terms of O/P
of plants:
assuming I1 & I2 are in phase:
2 2 2
PL  3 I1 Ra  3 I 2 Rb  3 I1  I 2 Rc
I1  I 2  I1  I 2
2 2
PL  3 I1 ( Ra  Rc )  3  2 I1 I 2 Rc  3 I 2 ( Rb  Rc ) P1 P2
I1  I2 
3 V1 pf1 3 V2 pf 2
Ra  Rc Rc Rb  Rc
PL  P 1
2
2
 2 P1 P2  P22
2

V1 ( pf1 ) 2
V1 V2 ( pf1 )( pf 2 ) V2 ( pf 2 ) 2

 P12 B11  2 P1 P2 B12  P22 B22

 Power System Economic Dispatch
Transmission Loss
• These B coefficients are named: loss coefficients

• loss coefficients are : reciprocal of MWs

• Example: for the last system if I1=1.0 0 pu
I2=0.8 0 pu V3=1.0 0 pu
• 0.04+j0.16 pu, 0.03+j0.12 pu, 0.02+j0.08 pu
line impedances for sections a, b, and c
respectively
• determine loss coefficients
 Power System Economic Dispatch
Transmission Loss
• bus voltages can be calculated:
• V1=1.0+(1.0+j0)(0.04+j0.16)=1.04+j0.16 pu
• V2=1.0+(0.8+j0)(0.03+j0.12)=1.024+j0.096 pu
0.04  0.02
• B
11 2
 0.0554 pu
1.04
0.02
B12   0.0188 pu
1.024  1.04

0.03  0.02
B22  2
 0.0477 pu
1.024
 Power System Economic Dispatch
Transmission Loss
• Example: calculate transmission loss for last
example
• P1=Re{(1.0+j0)(1.04+j0.16)}=1.04 pu
• P2=Re{(0.8+j0)(1.024+j0.096)}=0.192 pu
• PL= 1 . 0 2
 0 . 04  1. 8 2
 0 . 02  0 . 8 2
 0.03  0.04  0.0648  0.0192  0.124 pu

= 1.04  0.0554  2 1.04  0.8192 0.0188  0.8192  0.0477  0.06  0.032  0.032  0.124 pu
2 2

PL  P T BP
 Power System Economic Dispatch
Transmission Loss
• Distribution of Load Between Plants
K
•  Pn  PL  PR  0 (1)
n 1
• PR=total power received by loads
• PL=transmission loss
• Pn=individual plant inputs to network
• Since PR is constant dPR =0
• K
(2)
• 
Sincen 1
dPn  dPL  0 cost means dF T=0
minimum
• (3) (4)
K
FT P
dFT  
K
dPn dP   L
dP
n 1
n P L

n 1P n
n
 Power System Economic Dispatch
Transmission Loss
• Substituting dPL from (4) in (2), multiplying by λ and
substracting from (3) yield:
•  ( F P
K

P
T

P
L
  ) dP  0
n (5)
n 1 n n

• this equation is satisfied provided that:

• F   P    0
T L (6)
P n P n
• recognizing that change in O/P of only one plant can
affect cost at only that plant
• dF 1 n dF
L 
n
 n
dP 1  P dP
• n L
P
n 1
n
the penalty factor
Ln 
PL
1
Pn
 Power System Economic Dispatch
Transmission Loss
• Example 4: A system consists of two plants connected by a transmission
line
• Only load located at plant 2. when 200 MW is transmitted from plant 1 to
plant 2 power loss in line 16 MW
• Find required gen. for each plant & power received by load when λ for
system is $12.5 /MWh
• Assume incremental fuel costs are :

dF1
 0.010 P1  8.5$ / MWh
dP1
• Since all load is at plant 2; varying
2dF
 P2 cannot
0.0152P  affect
9.5$P/L MWh
 B22=0 & B12=0
dP
• when P1=200 MW, PL=16 MW; so 16=
2

• B11=0.0004 1/ MW

200 2 B11
Power System Economic Dispatch
Transmission Loss
PL
 2 P1 B11  2 P2 B12  0.0008P1
P1
PL
 2 P2 B22  2 P1 B12  0
P2

1
Penalty  factor  L1  and .....L2  1.0
1  0.0008P1
 Power System Economic Dispatch
Transmission Loss
• For λ=12.5 
• 0.010 P1  8.5
 12.5P1=200 MW
1  0.0008 P1
• 0.015P2+9.5=12.5 P2=200 MW
• Economic dispatch therefore requires division of load
between two plants for λ=12.5
• Power loss in transmission is:
• PL=0.0004X =2 16 MW
200
• And the delivered load is :
PR=P1+P2-PL=384 MW
 Power System Economic Dispatch
2.4 Transmission losses (considered)
• L  P1 ,..., PN , D   transmission losses
• often approximated N
by
N
aN quadratic form :
• L  L0   an Pn    anm Pn Pm
n 1 n 1 m 1
• ignoring generator output minimum and maximum
limits;
• minimize: C1  P1   ...  Cn  Pn   ...  CN  PN 
• subject to: P1  ...  PN  D  L
• Lagrange conditions: P1 ,..., PN satisfy economic dispatch if there
exists λ such that: Cn   1  L   0 for n  1,..., N
 
• Pn  Pn  P1  ...  PN  D  L
 Power System Economic Dispatch
• Notes:
  1  L 
• Define penalty factor n 1 
 Pn  for each
Gen. n so that economic dispatch condition
becomes:
Cn 
•   0 for n  1, 2,..., N
Pn n
•  n depends on the location of generator (two
generators at one location have same penalty
factor)
• if (increase in Gen.
L
n output)→ (large increase
C
in losses) then: P large   n large  n
reduced
n P
 Pn
n
 Power System Economic Dispatch
large incremental  large penalty  reduced
• That is: loss contribution factor, n output, Pn
• can include limits on generator output
• Generalizations:
• dispatch of reactive power resources;
including complete power flow model (realizing
voltages and bus voltage constraints, reactive
power balance, line flow constraints and losses,
…): is named “optimal power flow”
 Example 5
Economic Dispatch realizing
Transmission losses
• Total transmission losses for the power system are
given
• dC1/dP1 = 10 + 0.016 P1 $/MWhr
dC2/dP2= 8 + 0.018 P2 $/MW hr
PL=0.00015 P1^2 + 0.00002 P1P2 +0.00003P2^2 MW
• P1 & P2 in MW
• (a) determine output of each unit,
• (b) total transmission losses,
• (c) total load demand, & total operating cost C T when
the area λ =16.00 $/MWhr
Example:Economic Dispatch realizing
Transmission losses
 Economic Dispatch Including Losses
considering the plant generation limitation*
• Realizing transmission power losses with simple equation:
• (1)
• and the costn asnfunction of plant output
g g

• PL    Pi Bij Pj (2)
i 1 j 1
• Subject to following constraints:
ng ng
• Ct   Ci    i   i Pi   i Pi 2 (3)
• i 1 i 1 (4)
• Using Lagrange multiplier and adding additional terms to include inequality constraints:
ng
• (5)
P
i 1
i  PD  PL

Pi (min)  Pi  Pi (max) , i  1,..., ng

n n n
• * power sys. Analysis g
: Hadi Saadat
g g

  Ct   ( PD  PL   Pi )   i (max) ( Pi  Pi (max) )   i (min) ( Pi  Pi (min) )

i 1 i 1 i 1
Economic Dispatch Including Losses considering
the plant generation limitation*
• The constraints mean:
  0, when : P  P
• i (max)
(6)i i (max)

  0, when : P  P
i (min) i i (min)
• in other words if constraints is not violated, its
associated μ variable is zero & the corresponding
term in last equation does not exist
• the minimum of unconstrained function is found at
point the partial derivatives of function to its
variables are zero:
• , , , (7)

0
  
0  Pi  Pi (max)  0  Pi  Pi (min)  0
Pi  i (max) i (min)
Economic Dispatch Including Losses considering
the plant generation limitation*

• The last equations imply that Pi should not allowed

to go beyond its limit, and when Pi is within its
limits
• i (min)  i (max)  0 (8)
• and Kuhn-Tucker function becomes the same as
Lagrangian one
 Ct   (0  PL  1)  0 since: Ct  C1  C2  ...  Cn
Pi Pi
• then: C dC for opt. disp dC
 
P
  , i  1,..., n
i L
t
 i
dP P
g

• And second P dP
i
condition .
i ng
(9) i i

P  P  P
i 1
i D L
Economic Dispatch Including Losses considering
the plant generation limitation
• i.e. for C1:
• dCi   PL   , i  1,..., n (10)
g
dPi Pi
ng ng ng

PL   PB
i 1 j 1
i ij Pj  ( B0 i Pi  B00 )
i 1
ng ng

Ct   Ci    i   i Pi   i Pi 2
• i 1 i 1 (11)
• dC1 (12)
 from
• Substituting 1  2  1&
(11) P1(12) in (10) 
dP1
• dPL (13)
  2B11 P1  2B12 P2  ...  B01
• dP1

1  2 1 P1  2B11 P1  2B12 P2  ....  B01  

1 1 1
[(  B11 ) P1  B12 P2  ......]  [(1  B01 )  ]
 2 
 Economic Dispatch Including Losses
considering the plant generation limitation*
(1)

1   1 
   B11 B12 ... B1ng   P1   1  B 01 
 
 2    
 B21  B22 ... B2 ng   P2  1  1  B02   2 
   :   2   
 : : :    : 
  ng   Png    ng 
 Bng 1 Bng 2 ...  Bng ng  1  B0 ng  
     

( k )   i ng
Pi ( k )
ng
 i  Bii  i
(k )

Pi
2( i  ( k ) Bii )  (
i 1 
) 
i 1 2( i  
(k )
Bii ) 2
P ( k )
(k )

dPi ( k )
 d )
(
 Example 6: Economic Dispatch
realizing Transmission losses
• Fuel cost in $/h of three thermal plants of a power system:
C1  200  7.0 P1  0.008 P12 $ / h

• where P1, P2, & P3 are in MW C2  180  6.3P2  0.009 P22 $ / h

C3  140  6.8 P3  0.007 P32 $ / h
• plant outputs are subject to following limits:

10 MW  P1  85MW
• assume real power loss is given by:
10 MW  P2  80 MW
10 MW  P3  70 MW
• Loss coefficients in pu on 100 MVA base

PL ( pu )  0.0218P12( pu )  0.0228P22( pu )  0.0179P32( pu )

 Example 6: Economic Dispatch
realizing Transmission losses
• Determine optimal dispatch of generation when total
system load is 150 MW
• Since in cost function, Pi expressed in MW real
power loss in terms of MW generation is:
P1 2 P P
PL ( pu )  [0.0218( )  0.0228( 2 ) 2  0.0179( 3 ) 2 ]  100 MW 
100 100 100
0.000218 P12  0.000228 P22  0.000179 P32 MW
• For numerical solution using gradient method,
assume initial value of from coordination
equations given by (15):   8.0
(1)

• , 8.0  6.3
P  2  78.5292MW
(1)

8 .0  7 .0 2(0.009  8.0  0.000228)

P 
1
(1)
 51.3136MW 8.0  6.8
2(0.008  8.0  0.000218) P3(1)   71.1575MW
2(0.007  8.0  0.000179)
 Example 6: Economic Dispatch
realizing Transmission losses
• The real power loss is :
PL(1)  0.000218(51.3136) 2  0.000228(78.5292) 2  0.000179(71.1575) 2  2.886
• since:
ng

PD  150 MW , error P (1)

 PD  P
L
(k )
  Pi ( k )  150  2.8864  (51.3136  78.5292  71.1575)  48.1139
i 1

• From equation (16):

3
Pi (1) 0.008  0.000218  7.0 0.009  ... 0.007 
(
1 
)   
2(0.008  8.0  0.000218) 2(0.009  ...) 2(0.007  ...)
 152.4924
•
2 2 2
iFrom (17)
• 
P (k )
 48.1139
( k )  (1)   0.31552
• dPi ( k ) 152.4924
 d )
(

( 2 )  8.0  0.31552  7.6845

 Example 6: Economic Dispatch
realizing Transmission losses
• Continuing the process for second iteration, we have:
7.6845  7.0
P1( 2 )   35.3728MW
2(0.008  7.6845  0.000218)
7.6845  6.3
P2( 2 )   64.3821MW
2(0.009  7.6845  0.000228)
• P3( 2 ) 
7.6845  6.8
 52.8015MW
2(0.007  7.6845  0.000179)
•
PL( 2)  1.717  P ( 2)  0.8395
3
P
•  ( )  154.588    0.005431  

i 1
i ( 2) ( 2) ( 3)
 7.679

•  1.small
PL(is3) very 699  Pequality
and the
( 3)
 constraint
0.01742is met in four iterations
optimal Pi (3)
3 dispatch for λ=7.6789  P1=35.0907,P2=64.1317,P3=52.4767MW

 (  )
i 1
 154.624    0.0001127  
( 3) ( 4)
 7.6789
 ( 3)
 Power System Economic Dispatch
3. RECENT DEVELOPMENTS
►Recent changes in power systems operating
environment:
- inter-connected systems
- environmental constraints:
- acid rain (NOX, COX)
- urban/regional air quality
- CO2  green-house effect
- ash disposal from coal-fired plant
- regional water quality impacts
 Power System Economic Dispatch
• increasingly cost-effective renewable technologies:
- solar: photo-voltaic and solar thermal
- wind
- biomass
• demand side options
- conservation and end-use efficiency
- end-use storage
- end-use fuel substitution (e.g. passive solar)
- co-generation and third-party generation
 Power System Economic Dispatch
• technological changes: evolving cost structures
- generation and transmission
- demand side equipment and control
- computers and communications
• political changes
- micro-economic reform, corporatisation, privatization
► Consequences:
1- Emphasis on demand side options
2- Move from vertically-integrated monopoly supply authority to competitive,
decentralized supply industry
3- Markets for Electric Energy:
e.g. Iran Grid Management Co. (IGMC) In IRAN using offers for generation
from power plants, prepares hourly generation schedule for the next day
e.g. National Electricity Market (NEM) In Australia, NEMMCO was
established as market operator of NEM and operator of power
system that supports NEM
► Note: electric energy not like motor cars; so cannot identify
generator at point of supply
 Power System Economic Dispatch
• Power Pools (Nodal Prices ($/MWh)
offers to
auction markets) generate
market
(theory): clearing
• Suppliers submit offers to price
bids to
generate
consume
 as (the quantity: MW, the
price: $/MWh) dispatch Quantities (MW
• Consumers (or their agents) quantity
submit bids to consume
 as (quantity MW, price
$/MWh)
• Market clearing sets price to
maximize “benefit of trade”
 Power System Economic Dispatch
• Consequences (of Recent Developments) :
1- possibilities of many generators, large and
small, competing on a “level playing field”
2- fluctuating market price:
– in theory, can reflect industry conditions: e.g.
scarcity of cheap generation high price consumers
conserve, generation encouraged
– in practice, possibility of “gaming” the market
because of market power of a few large generators
 Power System Economic Dispatch
3- need for forward contracts and other financial
instruments to manage risk of market prices
4- increased “customer focus” and business
orientation of supply industry
5- technical constraints on operation of market:
- generator operating constraints
- need for instantaneous balance of power
- need to maintain voltages, waveform purity,
etc. (quality of supply)
Thus: market rules are quite complex
 Power System Economic Dispatch
6- Power System Economic Dispatch
7- Electrical power engineers often become
“traders in electrical energy”
►CONCLUSIONS (on Recent Developments) :
• economic dispatch: minimum operating cost
use of generators
• changes to power system operating
environment
 Power System Economic Dispatch
• i.e.:
– economic and technical
– environmental
– Political
• changing structure of electricity industry:
– markets for power
– competition
– marketing
– new entrants
 Power System Economic Dispatch
APPENDIX:OPTIMIZATION
• Objective:
• To maximize or minimize a mathematical
function, called “objective function”.
• The “constraint functions” and “variable limits”
are called “the constraints”
• Example:
• Elliptical objective function: f  x1 , x2   0.25 x1  x2
2 2

• Note: its minimum is zero and it has no finite

maximum value.
• Consider following optimization problem →
 Power System Economic Dispatch
APPENDIX:OPTIMIZATION

• Minimize: f  x1 , x2   0.25 x12  x22

• Subject to constraints:   x1 , x2   0
• Where :   x1 , x2   5  x1  x2

• x2
f=5 min f at x1=4, x2=1
f=2
f=1
x1

5- x1-x2=0

Elliptical objective function with equality constraint.

 Power System Economic Dispatch
APPENDIX:OPTIMIZATION

• Solution:
• Lagrange equation: L  x1, x2 ,    f  x1 , x2     x1 , x2 
• where λ is the scaling variable (Lagrange
multiplier).
• To find optimum values, require partial
derivatives w.r.t. each unknown be equal to
L L
zero, i.e. x  0.5 x1    0
x
 2 x2    0
1 2
L
 5  x1  x2  0

• Solution: x1  4 , x2  1 , 2
 Power System Economic Dispatch
APPENDIX:OPTIMIZATION

• The Kuhn-Tucker conditions:

• Optimization problems that involve equality as
well as inequality constraints:
• Minimize: f x

• Subject to: i  x   0 for i  1, 2,..., N

gi  x   0 for i  1, 2,..., Ng
• x = vector of real numbers, dimension N
 Power System Economic Dispatch
APPENDIX:OPTIMIZATION

• Forming Lagrange function:

N Ng
L  x,  ,    f  x    i . i  x    i .gi  x 
i 1 i 1
• Conditions for an optimum for the point x 0 ,  0 ,  0are:
1- L  x0 ,  0 ,  0   0 for i  1,2,..., N
x i
2-  
i x0  0 for i  1, 2,..., N
3- gi  x 0   0 for i  1, 2,..., Ng
4- i0 gi  x 0   0; i0  0 for i  1, 2,..., Ng
• Example; Minimize: f  x1 , x2   0.25 x12  x22
• Subject to constraints   x1, x2   5  x1  x2  0
g  x1 , x2   x1  0.2 x2  3  0
 Power System Economic Dispatch
APPENDIX:OPTIMIZATION

• Example: x2
f=5
f=2
f=1
x1

5  x1  x2  0

x1  0.2 x2  3  0
Elliptical objective function with
equality and inequality constraints.

• Solution; Lagrange equation:

• L  f  x1 , x2      x1 , x2     g  x1 , x2 
 0.25 x1  x2   5  x1  x2     x1  0.2 x2  3
2 2
 Power System Economic Dispatch
APPENDIX:OPTIMIZATION

• Conditions to achieve minimum:

L
• Condition 1: x
 0.5 x1      0
1
L
 2 x2    0.2   0
x2
• Condition 2: 5  x1  x2  0
• Condition 3: x1  0.2 x2  3  0
• Condition 4:   x1  0.2 x2  3  0
 0
• To solve, need to experiment with various
solutions until find one that met all four
conditions.
 Power System Economic Dispatch
APPENDIX:OPTIMIZATION

• First try   0, no good. Next try   0 then by

conditions 2 and 3: x1  2.5 and x2  2.5. By
condition 1:   5.9375 and   4.6875 . All
conditions are met.