Fr. C.

Rodrigues Institute of Technology, Vashi, Navi-Mumbai

Module 1

Economic Operation of Power System

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 Fr. C. Rodrigues Institute of Technology, Vashi, Navi-Mumbai

Introduction to Optimal System Operation

• The optimal system operation involved the consideration of economy
of operation, system security, emissions at certain fossil-fuel plants,
optimal releases of water at hydro-generation, etc.
• All these considerations may make for conflicting requirements
• A compromise has to be made for optimal system operation.
• Here we consider the economy of operation only, also called
the economic dispatch problem.

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Economic Operation of Power plants

• The main aim in the economic dispatch problem is to minimize the
total cost of generating real power (production cost) at various
stations while satisfying the loads and the losses in the transmission
lines.
• For simplicity we consider the presence of thermal plants only.
• Economy of operation is naturally predominant in determining
allocation of generation to each station for various system load levels.
• The economic considerations are that of operating (running) cost and
not the capital outlay.

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Optimal Operation of Power plants

• There are two problems of optimal operation of power plants
Optimum allocation or Load scheduling (LS) problem: Allocation of
generation to each station for system load levels.
Unit commitment (UC) problem: Commitment of generating units at
each generating station

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Optimal Operation of Thermal Power plants

• There are three curves to study optimal operation of thermal power
plants
Heat rate curve
Input-output curve of a generating unit
Incremental Fuel cost Vs Power output curve of a generating unit

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HEAT RATE CURVE

• The thermal unit is most efficient at a
minimum heat rate, which corresponds
to a particular generation PG.
• The curve indicates an increase in heat
rate at low and high power limits.
• Thermal efficiency of the unit is
affected by following factors:
 Condition of steam
 System cycle used
 Re-heat stages
 Condenser pressure, etc.
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Input-output curve
• The major component of generator
operating cost is
Fuel input/hour
Maintenance
• The fuel cost is meaningful in case of
thermal and nuclear stations.
• But for hydro stations the operating cost as
such is not meaningful.
• (MW)min is the minimum loading limit
below which it is uneconomical (or may be
technically infeasible) to operate the unit.
• (MW)max is the maximum output limit
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Incremental Fuel cost Vs Power output curve

• Operating cost of generating unit,

• The slope of the cost curve, i.e.

dCi/dPGi is called the incremental
fuel cost (IC).
• Expressed in units of rupees per
megawatt hour (Rs/MWh), a linear
relationship

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Coordination equation

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Coordination equation
• Let us assume that it is known a priori which generators are to be run
to meet a particular load on the station.
• Suppose there is a station with k generators committed and the active
power load PD is given, the real power generation is PG for each
generator has to be allocated so as to minimize the total cost.
• The optimization problem (objective function) can be stated as

Minimize

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Coordination equation
• Under the equality constraint of meeting the load demand
subject to (i) power balance equation

(ii) inequality constraint

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Coordination equation
• The problem of loading on each generator can be solved by the
method of Lagrange multipliers in which a function is minimized (or
maximized).
𝐿 𝑃𝐺𝑖 , λ = 𝑂𝑏𝑗𝑒𝑐𝑡𝑖𝑣𝑒 𝑓𝑢𝑐𝑡𝑖𝑜𝑛 + λ ∗ (Constraint)

• Where λ is the Lagrange multiplier.

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Coordination equation
• The partial derivative of the Lagrange function defined by

• Minimization is achieved by the condition

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Coordination equation
• Where dCi/dPGi is the incremental cost of the ith generator (units:
Rs/MWh), a function of generator loading PGi.

• The Optimal Operations of Generators corresponds to the equal

incremental cost point of all the generators.

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Coordination equation
• This equation is called the coordination equation.
• It is solved to yield a solution for the Lagrange multiplier (λ) and the
optimal loading of k generators.
• It can be expressed as
IC1 = IC2 = ………. =ICk = λ

• The Optimal Operations of Generators corresponds to the equal

incremental cost point of all the generators.

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Example 1
• Two generating units of a power system are having the following fuel
cost curves:
• 𝐹1 = 0.4𝑃12 + 10𝑃1 +25 Rs/h
• 𝐹2 = 0.35𝑃22 + 6𝑃2 +20 Rs/h
• 𝑃1 , 𝑃2 are in MW. Both the units operate all the time. Determine the
economic dispatch for the units for a total load of 220MW, neglecting
the transmission lines losses.
• What is the saving realized against equal distribution of power?

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Solution
• There are two generators
• IC1= 0.8 P1 +10
• IC2 =0.7 P2+6
• Using coordination equation
• IC1 = IC2 = λ
• 0.8 P1 + 10=0.7 P2+ 6
• 0.8 P1 - 0.7 P2= - 4 ---------(1)
• P1 + P2=220 ---------------(2)
• Solving (1) and (2)

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Solution
• P1 = 100 MW
• P2= 120 MW
• λ=90 Rs/hr
• Calculate F1 and F2 for equal loading
• Calculate F1 and F2 for optimal loading
• Net saving caused by optimal scheduling=75 Rs/h

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• 𝐹1 = 0.4𝑃12 + 10𝑃1 +25 Rs/h
• 𝐹2 = 0.35𝑃22 + 6𝑃2 +20 Rs/h

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 Fr. C. Rodrigues Institute of Technology, Vashi, Navi-Mumbai

Example 2
• The incremental fuel cost of a thermal power plant having two units
are given by

• For load demand of 130MW. What is the saving realized against equal
distribution of power, neglecting the transmission lines losses?
• Solution: Using Coordination Equation,

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Coordination equations
• Solution:
• There are two generators
• IC1 = IC2 = λ
• 0.2 PG1 + 40 = 0.25 PG2+30
• 0.2 PG1 - 0.25 PG2= -10 ---------(1)
• PG1 + PG2= 130 ---------------(2)
• Solving (1) and (2)
• PG1 = 50 MW
• PG2= 80 MW

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Coordination equations
• Solution: If unit 1 and unit 2 supplies 65 MW each for equal
distribution, increase in cost is
• For Unit 1

• For unit 2

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Coordination equations
• Solution: Net saving caused by optimal scheduling

• Total yearly saving due to optimal scheduling

• Hence it is recommended for optimal scheduling compared to equal

sharing

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Example 3

• University of Mumbai QP-2018

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Solution

• Using coordination equation

• IC1 = IC2 = IC3 = λ
• P1 + P2+ P3=800
• λ=8.5 $/hr

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Solution

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Solution

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Exact Coordination equation

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Exact Coordination equations

• If the transmission losses are neglected, the total system load can be
optimally divided among the various generating plants using the equal
incremental cost criterion.
• However, it is unrealistic to neglect transmission losses particularly
when long distance transmission of power is involved.
• The transmission losses may vary from 5 to 15% of the total load.
• Therefore, it is essential to account for losses while
developing an economic load dispatch policy.

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Exact Coordination equations

Plant 1 Plant 2
• Consider a two-bus system with
identical generators at each bus
(i.e. the same IC curves).
• Assume that the load is located
near plant 1 and plant 2 has to Transmission Line
deliver power via a lossy line.
• Equal incremental cost criterion Load
would dictate that each plant
Plant 1 should carry a greater
should carry half the total load.
share of the load demand thereby
reducing transmission losses.

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Exact Coordination equations-Derivation

• The objective is to minimize the overall cost of generation
1. Objective function is
Minimize

2. Equality constraint is to meet the load demand with transmission loss,

Where k = total number of generating plants

PGi = generation of ith plant
PD = system load demand
PL = total system transmission loss
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Exact Coordination equations

• To solve the problem, we write the Lagrangian as
𝐿 𝑃𝐺𝑖 , λ = 𝑂𝑏𝑗𝑒𝑐𝑡𝑖𝑣𝑒 𝑓𝑢𝑐𝑡𝑖𝑜𝑛 + λ ∗ (Constraint)

• The power factor of load at each bus is assumed to remain constant,

the system loss PL can be shown to be a function of active power
generation at each plant, i.e

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Exact Coordination equations

• For Optimum Generation Scheduling real power dispatch

• Rearranging Eq. and recognizing that changing the output of only one
plant can affect the cost at only that plant.
• We have,

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Exact Coordination equations

Where

• Li is called the penalty factor of the ith plant.

• The Lagrangian multiplier λ is in rupees per megawatt-hour, when fuel
cost is in rupees per hour.
• The minimum fuel cost is obtained, when the incremental fuel cost of
each plant multiplied by its penalty factor is the same for all the
plants.

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Exact Coordination equations

• This equation is referred to as the Exact coordination equation.

• Thus it is clear that to solve the Optimum Generation Scheduling
problem, it is necessary to compute ITL for each plant.
• Therefore we must determine the functional dependence of
transmission loss on real powers of generating plants.

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Exact Coordination equations

1) In a system with two plants, incremental cost are given by
𝐼𝐶1 = 0.01𝑃1 +30 Rs/MWh
𝐼𝐶2 = 0.015𝑃2 +35 Rs/MWh
The system is running under optimal schedule is 𝑃1 = 𝑃2 =100 MW.
𝜕𝑃𝐿 𝜕𝑃𝐿
If =0.2, find the plant penalty factor and .
𝜕𝑃𝐺2 𝜕𝑃𝐺1
• Solution:

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Exact Coordination equations

• For plant 2, 𝑃𝐺2 =100 MW

• 𝜆= 𝐼𝐶2 ∗ 𝐿2
1
• 𝜆 =(0.015*100+35)
(1−0.2)
• 𝜆=45.625 Rs/MWh

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Exact Coordination equations

1
• 𝑃𝑒𝑛𝑎𝑙𝑡𝑦 𝑓𝑎𝑐𝑡𝑜𝑟 𝑜𝑓 𝑝𝑙𝑎𝑛𝑡 2, 𝐿2 = =1.25
(1−0.2)
• 𝜆= 𝐼𝐶1 ∗ 𝐿1 = 45.625 Rs/MWh
• 𝑃𝑒𝑛𝑎𝑙𝑡𝑦 𝑓𝑎𝑐𝑡𝑜𝑟 𝑜𝑓 𝑝𝑙𝑎𝑛𝑡 1, 𝐿1 =1.472
𝜕𝑃𝐿
• =0.32
𝜕𝑃𝐺1

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Bmn coefficients
• One of the most important, simple but approximate, methods of
expressing transmission loss as a function of generator powers is
through B-coefficients.
• This method is reasonably adequate for treatment of loss coordination
in economic scheduling of load between plants.
• The general form of the loss formula using B-coefficients is

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Bmn coefficients

• If PGs are in megawatts,

• Bmn are in reciprocal of megawatts.
• Computations may be carried out in per unit.
• Also, Bmn = Bnm.

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Bmn coefficients
• Equation for transmission loss may be written in the matrix form as

• Where

• It may be noted that B is a symmetric matrix

.
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Bmn coefficients
• For a two plant system, we can write the expression for loss as

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Example (Nagrath and Kothari-Power system Engineering)

For a two-bus system, if 100 MW is transmitted from plant 1 to the

load, a transmission loss of 10 MW is incurred. Find the required
generation for each plant and the power received by load when the
system λ is Rs 25/MWh. The incremental fuel costs of the two plants
are given below:
𝐼𝐶1 = 0.02𝑃𝐺1 +16 Rs/MWh
𝐼𝐶2 = 0.04𝑃𝐺2 +20 Rs/MWh

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For Optimum Generation Scheduling,

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Example 1
• Three generating plants supply powers of P1=200 MW, P2=400 MW,
P3=600 MW to a power network. Calculate transmission loss in the
network in MW and in pu.
• Given: B11=0.01, B22=0.03, B33=0.04, B12=0.001, B13=-0.001,
B23=0.0004.
• Solution:

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Example

• PL=1971.12 MW
• PL=1.9712 pu

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Example 2
• Incremental fuel cost of two generating units shown for the given
system in Rs/MWh are:
• 𝐼𝐶1 = 0.07𝑃1 + 15 Rs/MWh
• 𝐼𝐶2 = 0.08𝑃2 + 11 Rs/MWh
• The loss coefficients are given:
0.002 −0.0004
•𝐵= 𝑀𝑊 −1
−0.0004 0.0024
• For a λ =25Rs/MWh, find the economically scheduled generation of
plants, total load and losses.

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Example

Consider transmission losses, using exact coordination equation

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Example
• P1=67.85 MW
• P2=76.78 MW
• PL=19.19 MW
• PD=125.44 MW

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Optimal Unit Commitment(UC)

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Optimal Unit Commitment(UC)

• It is not economical to run all the units available all the time.
• To determine the units of a plant that should operate for a particular
load is the problem of unit commitment (UC).
• This problem is of importance for thermal plants as for other types of
generation such as hydro; their operating cost and start-up times are
negligible, Nuclear; base load plants so that their on-off status is not
important.
• A simple but sub-optimal approach to the problem is to impose
priority ordering, wherein the most efficient unit is loaded first to be
followed by the less efficient units in order as the load increases.

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Priority ordering
• The full-load average production costs
• Unit 1: F1(600) / 600 = 9.7922
• Unit 2: F2 (400) / 400 = 9.4010
• Unit 3: F3 (200) / 200 = 11.1848
• A strict priority order for these units: [2, 1, 3]
Combination Min demand (MW) Max demand (MW)
1+2+3 300 1200
1+2 250 1000
2 100 400
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Optimal Unit Commitment(UC)

• A straight forward but highly time-consuming way of finding the most
economical combination of units to meet a particular load demand is,
 To try all possible combinations of units that can supply this load;
 To divide the load optimally among the units of each combination
by use of the coordination equations
 Then, to determine the combination which has the least operating
cost among all these.
• Considerable computational saving can be achieved by using a
dynamic programming method.

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Dynamic Programming Method

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Dynamic Programming Method

• Data available for DP to be known a priori:
1. The total number of units available
2. Their individual cost characteristics
3. The load cycle on the station are assumed.
• Further, it shall be assumed that the load on each unit of
combination of units changes in suitably small but uniform steps
of size ΔMW (e.g. 1 MW).

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Dynamic Programming Method Steps

1. Starting arbitrarily with any two units, the most economical
combination is determined for all the discrete load levels of the
combined output of the two units.
2. The most economical cost curve in discrete form for the two units
thus obtained, can be viewed as the cost curve of a single
equivalent unit.
3. The third unit is now added and the procedure repeated to find the
cost curve of the three combined units.
4. The process is repeated, till all available units are exhausted.
• In this procedure the operating combinations of third and first are
not required to be worked out resulting in considerable saving in
computational effort.
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Dynamic Programming Method Steps

• Let a cost function FN (x) be defined as follows:
• FN (x) = the minimum cost in Rs/hr of generating ‘x’ MW by N units,
• fN (y) = cost of generating ‘y’ MW by the Nth unit
• FN-1 (x — y) = the minimum cost of generating (x — y) MW by the
remaining (N — 1) units
• Now the application of DP results in the following recursive relation

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Dynamic Programming Method Steps

• Using the above recursive relation, we can easily determine the
combination of units, yielding minimum operating costs for loads
ranging in convenient steps from the minimum permissible load of
the smallest unit to the sum of the capacities of all available units.
• In this process the total minimum operating cost and the load shared
by each unit of the optimal combination are automatically
determined for each load level.

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Dynamic Programming Method Steps

• Consider a sample system having four thermal generating units with
parameters listed in Table 7.2.
• It is required to determine the most economical units to be
committed for a load of 9 MW.
• Let the load changes be in steps of 1 MW.

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Dynamic Programming Method Steps

• Now

• From the recursive relation, computation is made for F2(0), F2(1),

F2(2), …, F2(9).

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Dynamic Programming Method Steps

• On computing term-by-term and comparing, we get

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Recursive relation– F2(9)

Combination Cost Rs
Step F1 F2
(F1,F2) (F1+F2)
0 0,9 0 303.3 303.3
1 1,8 23.885 263.2 287.085
2 2,7 48.54 224.7 273.24
3 3,6 73.965 187.8 261.765
4 4,5 100.16 152.5 252.66
5 5,4 127.125 118.8 245.925
6 6,3 154.86 86.7 241.56
7 7,2 183.365 56.2 239.565
8 8,1 212.64 27.3 239.94
9 9,0 242.685 0 242.685
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Recursive relation- F2(8)

Optimal
Step combination F1 F2 Cost (F1+F2)
(F1,F2)
0 0,8 0 263.2 263.2
1 1,7 23.885 224.7 248.585
2 2,6 48.54 187.8 236.34
3 3,5 73.965 152.5 226.465
4 4,4 100.16 118.8 218.96
5 5,3 127.125 86.7 213.825
6 6,2 154.86 56.2 211.06
7 7,1 183.365 27.3 210.665
8 8,0 212.64 0 212.64
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Dynamic Programming Method Steps

• Similarly, we can calculate F2(8), F2(7), …, F2(1), F2(0).
• Using the recursive relation, we now compute F3(0), F3(1), …, F3(9).

• Proceeding similarly, we get

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Dynamic Programming Method Conclusions

• Examination of F1(9), F2(9), F3(9) and F4(9) leads to the conclusion that
• Optimum units to be committed for a 9 MW load are 1 and 2
sharing the load as 7 MW and 2 MW, respectively with a minimum
operating cost of Rs 239.565/hour.
• If a higher accuracy is desired, the step size could be reduced (e.g.1/2
MW),with a considerable increase in computation time and required
storage capacity.

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UC table
Load Range Unit No 1 Unit No 2 Unit No 3 Unit No 4
(MW)
1-5 1 0 0 0
6-13 1 1 0 0
14-18 1 1 1 0
19-48 1 1 1 1
• 1-Unit running (Committed), 0-Unit not running(not Committed)

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Advantages of Dynamic Programming Method

• The UC table is prepared once and for all for a given set of
units.
• If the load is assumed to increase in small but finite size steps,
dynamic programming (DP) can be used for computing the UC
table, wherein it is not necessary to solve the coordination
equations;
• At the same time the unit combinations to be tried are much
reduced in number.

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