mywbut.

com

Economic Operation of Power Systems

Section I: Economic Operation Of Power System

Economic Distribution of Loads between the Units of a Plant

Generating Limits
Economic Sharing of Loads between Different Plants

In an early attempt at economic operation it was decided to supply power from the most efficient
plant at light load conditions. As the load increased, the power was supplied by this most
efficient plant till the point of maximum efficiency of this plant was reached. With further
increase in load, the next most efficient plant would supply power till its maximum efficiency is
reached. In this way the power would be supplied by the most efficient to the least efficient plant
to reach the peak demand. Unfortunately however, this method failed to minimize the total cost
of electricity generation. We must therefore search for alternative method which takes into
account the total cost generation of all the units of a plant that is supplying a load.

Economic Distribution of Loads between the Units of a Plant

To determine the economic distribution of a load amongst the different units of a plant, the
variable operating costs of each unit must be expressed in terms of its power output. The fuel
cost is the main cost in a thermal or nuclear unit. Then the fuel cost must be expressed in terms
of the power output. Other costs, such as the operation and maintenance costs, can also be
expressed in terms of the power output. Fixed costs, such as the capital cost, depreciation etc.,
are not included in the fuel cost.
The fuel requirement of each generator is given in terms of the Rupees/hour. Let us define the
input cost of an unit- i , fi in Rs./h and the power output of the unit as Pi . Then the input cost
can be expressed in terms of the power output as

Rs./h

(5.1)

The operating cost given by the above quadratic equation is obtained by approximating the
power in MW versus the cost in Rupees curve. The incremental operating cost of each unit is
then computed as

mywbut.com

(5.2)
Rs./MWh

Let us now assume that only two units having different incremental costs supply a load. There
will be a reduction in cost if some amount of load is transferred from the unit with higher
incremental cost to the unit with lower incremental cost. In this fashion, the load is transferred
from the less efficient unit to the more efficient unit thereby reducing the total operation cost.
The load transfer will continue till the incremental costs of both the units are same. This will be
optimum point of operation for both the units.

The above principle can be extended to plants with a total of N number of units. The total fuel
cost will then be the summation of the individual fuel cost fi , i = 1, ... , N of each unit, i.e.,
(5.3)

Let us denote that the total power that the plant is required to supply by PT , such that
(5.4)

where P1 , ... , PN are the power supplied by the N different units.

The objective is minimize fT for a given PT . This can be achieved when the total difference dfT
becomes zero, i.e.,
(5.5)

Now since the power supplied is assumed to be constant we have

mywbut.com

(5.6)

Multiplying (5.6) by and subtracting from (5.5) we get

(5.7)

The equality in (5.7) is satisfied when each individual term given in brackets is zero. This gives
us

(5.8)

Also the partial derivative becomes a full derivative since only the term fi of fT varies with Pi, i
= 1, ..., N . We then have

(5.9)

Generating Limits
It is not always necessary that all the units of a plant are available to share a load. Some of the
units may be taken off due to scheduled maintenance. Also it is not necessary that the less
efficient units are switched off during off peak hours. There is a certain amount of shut down and
start up costs associated with shutting down a unit during the off peak hours and servicing it back
on-line during the peak hours. To complicate the problem further, it may take about eight hours

mywbut.com

or more to restore the boiler of a unit and synchronizing the unit with the bus. To meet the
sudden change in the power demand, it may therefore be necessary to keep more units than it
necessary to meet the load demand during that time. This safety margin in generation is called
spinning reserve . The optimal load dispatch problem must then incorporate this startup and shut
down cost for without endangering the system security.

(5.10)
The power generation limit of each unit is then given by the inequality constraints

The maximum limit Pmax is the upper limit of power generation capacity of each unit. On the
other hand, the lower limit Pmin pertains to the thermal consideration of operating a boiler in a
thermal or nuclear generating station. An operational unit must produce a minimum amount of
power such that the boiler thermal components are stabilized at the minimum design operating
temperature.

Example 5.2
let us consider a generating station that contains a total number of three generating units. The
fuel costs of these units are given by

Rs./h

Rs./h

Rs./h
The generation limits of the units are

mywbut.com

The total load that these units supply varies between 90 MW and 1250 MW. Assuming that all
the three units are operational all the time, we have to compute the economic operating settings
as the load changes.
The incremental costs of these units are

Rs./MWh

Rs./MWh

Rs./MWh
At the minimum load the incremental cost of the units are

Rs./MWh

Rs./MWh

Rs./MWh
Since units 1 and 3 have higher incremental cost, they must therefore operate at 30 MW each.
The incremental cost during this time will be due to unit-2 and will be equal to 26 Rs./MWh.
With the generation of units 1 and 3 remaining constant, the generation of unit-2 is increased till
its incremental cost is equal to that of unit-1, i.e., 34 Rs./MWh. This is achieved when P2 is equal
to 41.4286 MW, at a total power of 101.4286 MW.
An increase in the total load beyond 101.4286 MW is shared between units 1 and 2, till their
incremental costs are equal to that of unit-3, i.e., 43.5 Rs./MWh. This point is reached when P1 =
41.875 MW and P2 = 55 MW. The total load that can be supplied at that point is equal to
126.875. From this point onwards the load is shared between the three units in such a way that

mywbut.com

the incremental costs of all the units are same. For example for a total load of 200 MW, from
(5.4) and (5.9) we have

Solving the above three equations we get P1 = 66.37 MW, P2 = 80 MW and P3 = 50.63 MW and
an incremental cost ( ) of 63.1 Rs./MWh. In a similar way the economic dispatch for various
other load settings are computed. The load distribution and the incremental costs are listed in
Table 5.1 for various total power conditions.

Table 5.1 Load distribution and incremental cost for the units of Example 5.1
PT (MW)

P1 (MW)

P2 (MW)

P3 (MW)

(Rs./MWh)

90
101.4286
120
126.875
150
200
300
400
500
600
700
800
906.6964
1000
1100
1181.25
1200
1250

30
30
38.67
41.875
49.62
66.37
99.87
133.38
166.88
200.38
233.88
267.38
303.125
346.67
393.33
431.25
450
500

30
41.4286
51.33
55
63.85
83
121.28
159.57
197.86
236.15
274.43
312.72
353.5714
403.33
456.67
500
500
500

30
30
30
30
36.53
50.63
78.85
107.05
135.26
163.47
191.69
219.9
250
250
250
250
250
250

26
34
40.93
43.5
49.7
63.1
89.9
116.7
143.5
170.3
197.1
223.9
252.5
287.33
324.67
355
370
410

At a total load of 906.6964, unit-3 reaches its maximum load of 250 MW. From this point
onwards then, the generation of this unit is kept fixed and the economic dispatch problem
involves the other two units. For example for a total load of 1000 MW, we get the following two
equations from (5.4) and (5.9)

mywbut.com

Solving which we get P1 = 346.67 MW and P2 = 403.33 MW and an incremental cost of 287.33
Rs./MWh. Furthermore, unit-2 reaches its peak output at a total load of 1181.25. Therefore any
further increase in the total load must be supplied by unit-1 and the incremental cost will only be
borne by this unit. The power distribution curve is shown in Fig. 5.1.

Fig.5.1 Power distribution between the units of Example 5.2.

Example 5.3
Consider two generating plant with same fuel cost and generation limits. These are given by

For a particular time of a year, the total load in a day varies as shown in Fig. 5.2. Also an
additional cost of Rs. 5,000 is incurred by switching of a unit during the off peak hours and
switching it back on during the during the peak hours. We have to determine whether it is
economical to have both units operational all the time.

mywbut.com

Fig. 5.2 Hourly distribution of load for the units of Example 5.2.
Since both the units have identical fuel costs, we can switch of any one of the two units during
the off peak hour. Therefore the cost of running one unit from midnight to 9 in the morning
while delivering 200 MW is

Rs.
Adding the cost of Rs. 5,000 for decommissioning and commissioning the other unit after nine
hours, the total cost becomes Rs. 167,225.
On the other hand, if both the units operate all through the off peak hours sharing power equally,
then we get a total cost of

Rs.
which is significantly less that the cost of running one unit alone.

Economic Sharing of Loads between Different Plants

So far we have considered the economic operation of a single plant in which we have discussed
how a particular amount of load is shared between the different units of a plant. In this problem
we did not have to consider the transmission line losses and assumed that the losses were a part
of the load supplied. However if now consider how a load is distributed between the different
plants that are joined by transmission lines, then the line losses have to be explicitly included in
the economic dispatch problem. In this section we shall discuss this problem.
When the transmission losses are included in the economic dispatch problem, we can modify
(5.4) as

mywbut.com

(5.11)

(5.12)
where PLOSS is the total line loss. Since PT is assumed to be constant, we have

(5.13)
In the above equation dPLOSS includes the power loss due to every generator, i.e.,

Also minimum generation cost implies dfT = 0 as given in (5.5). Multiplying both (5.12) and

(5.14)
(5.13) by and combining we get

(5.15)
Adding (5.14) with (5.5) we obtain

The above equation satisfies when

mywbut.com

(5.16)

Again since

(5.17)
from (5.16) we get

(5.18)
where Li is called the penalty factor of load- i and is given by

Example 5.4

Consider an area with N number of units. The power generated are defined by the vector

Then the transmission losses are expressed in general as

10

mywbut.com

(5.19)

where B is a symmetric matrix given by

The elements Bij of the matrix B are called the loss coefficients . These coefficients are not
constant but vary with plant loading. However for the simplified calculation of the penalty factor
Li these coefficients are often assumed to be constant.
When the incremental cost equations are linear, we can use analytical equations to find out the
economic settings. However in practice, the incremental costs are given by nonlinear equations
that may even contain nonlinearities. In that case iterative solutions are required to find the
optimal generator settings.

Section II: Automatic Generation Control

Load Frequency Control

Automatic Generation Control

Electric power is generated by converting mechanical energy into electrical energy. The rotor
mass, which contains turbine and generator units, stores kinetic energy due to its rotation. This
stored kinetic energy accounts for sudden increase in the load. Let us denote the mechanical
torque input by Tm and the output electrical torque by Te . Neglecting the rotational losses, a
generator unit is said to be operating in the steady state at a constant speed when the difference
between these two elements of torque is zero. In this case we say that the accelerating torque
(5.20)
is zero.
When the electric power demand increases suddenly, the electric torque increases. However,
without any feedback mechanism to alter the mechanical torque, Tm remains constant. Therefore
the accelerating torque given by (5.20) becomes negative causing a deceleration of the rotor
mass. As the rotor decelerates, kinetic energy is released to supply the increase in the load. Also
note that during this time, the system frequency, which is proportional to the rotor speed, also
decreases. We can thus infer that any deviation in the frequency for its nominal value of 50 or 60

11

mywbut.com

Hz is indicative of the imbalance between Tm and Te. The frequency drops when Tm < Te and
rises when Tm > Te .
The steady state power-frequency relation is shown in Fig. 5.3. In this figure the slope of the

(5.21)
Pref line is negative and is given by

where R is called the regulating constant . From this figure we can write the steady state power
frequency relation as

(5.22)
Fig. 5.3 A typical steady-state power-frequency curve.

Suppose an interconnected power system contains N turbine-generator units. Then the steadystate power-frequency relation is given by the summation of (5.22) for each of these units as

12

mywbut.com

(5.23)

In the above equation, Pm is the total change in turbine-generator mechanical power and Pref is
the total change in the reference power settings in the power system. Also note that since all the
generators are supposed to work in synchronism, the change is frequency of each of the units is

(5.24)
the same and is denoted by f. Then the frequency response characteristics is defined as

(5.25)
We can therefore modify (5.23) as

Example 5.5
Consider an interconnected 50-Hz power system that contains four turbine-generator units rated
750 MW, 500 MW, 220 MW and 110 MW. The regulating constant of each unit is 0.05 per unit
based on its own rating. Each unit is operating on 75% of its own rating when the load is
suddenly dropped by 250 MW. We shall choose a common base of 500 MW and calculate the
rise in frequency and drop in the mechanical power output of each unit.

13

mywbut.com

The first step in the process is to convert the regulating constant, which is given in per unit in the
base of each generator, to a common base. This is given as
(5.26)
We can therefore write

Therefore

per unit
We can therefore calculate the total change in the frequency from (5.25) while assuming Pref =
0, i.e., for no change in the reference setting. Since the per unit change in load - 250/500 = - 0.5
with the negative sign accounting for load reduction, the change in frequency is given by

Then the change in the mechanical power of each unit is calculated from (5.22) as

14

mywbut.com

It is to be noted that once Pm2 is calculated to be - 79.11 MW, we can also calculate the changes
in the mechanical power of the other turbine-generators units as

This implies that each turbine-generator unit shares the load change in accordance with its own
rating.

Load Frequency Control

Modern day power systems are divided into various areas. For example in India , there are five
regional grids, e.g., Eastern Region, Western Region etc. Each of these areas is generally
interconnected to its neighboring areas. The transmission lines that connect an area to its
neighboring area are called tie-lines . Power sharing between two areas occurs through these tielines. Load frequency control, as the name signifies, regulates the power flow between different
areas while holding the frequency constant.
As we have in Example 5.5 that the system frequency rises when the load decreases if Pref is
kept at zero. Similarly the frequency may drop if the load increases. However it is desirable to
maintain the frequency constant such that f=0 . The power flow through different tie-lines are
scheduled - for example, area- i may export a pre-specified amount of power to area- j while
importing another pre-specified amount of power from area- k . However it is expected that to
fulfill this obligation, area- i absorbs its own load change, i.e., increase generation to supply extra
load in the area or decrease generation when the load demand in the area has reduced. While
doing this area- i must however maintain its obligation to areas j and k as far as importing and
exporting power is concerned. A conceptual diagram of the interconnected areas is shown in Fig.
5.4.

15

mywbut.com

Fig. 5.4 Interconnected areas in a power system.

We can therefore state that the load frequency control (LFC) has the following two objectives:

Hold the frequency constant ( f = 0) against any load change. Each area must contribute
to absorb any load change such that frequency does not deviate.
Each area must maintain the tie-line power flow to its pre-specified value.

(5.27)
The first step in the LFC is to form the area control error (ACE) that is defined as

where Ptie and Psch are tie-line power and scheduled power through tie-line respectively and the
constant Bf is called the frequency bias constant .
The change in the reference of the power setting Pref, i , of the area- i is then obtained by the

(5.28)
feedback of the ACE through an integral controller of the form

where Ki is the integral gain. The ACE is negative if the net power flow out of an area is low or
if the frequency has dropped or both. In this case the generation must be increased. This can be
achieved by increasing Pref, i . This negative sign accounts for this inverse relation between
Pref, i and ACE. The tie-line power flow and frequency of each area are monitored in its control
center. Once the ACE is computed and Pref, i is obtained from (5.28), commands are given to
various turbine-generator controls to adjust their reference power settings.

Example 5.6

16

mywbut.com

Consider a two-area power system in which area-1 generates a total of 2500 MW, while area-2
generates 2000 MW. Area-1 supplies 200 MW to area-2 through the inter-tie lines connected
between the two areas. The bias constant of area-1 ( 1 ) is 875 MW/Hz and that of area-2 ( 2 )
is 700 MW/Hz. With the two areas operating in the steady state, the load of area-2 suddenly
increases by 100 MW. It is desirable that area-2 absorbs its own load change while not allowing
the frequency to drift.
The area control errors of the two areas are given by
and
Since the net change in the power flow through tie-lines connecting these two areas must be
zero, we have

Also as the transients die out, the drift in the frequency of both these areas is assumed to be
constant, i.e.,

If the load frequency controller (5.28) is able to set the power reference of area-2 properly, the
ACE of the two areas will be zero, i.e., ACE1 = ACE2 = 0. Then we have

This will imply that f will be equal to zero while maintaining Ptie1 =Ptie2 = 0. This signifies
that area-2 picks up the additional load in the steady state.

Coordination Between LFC And Economic Dispatch

Both the load frequency control and the economic dispatch issue commands to change the power
setting of each turbine-governor unit. At a first glance it may seem that these two commands can
be conflicting. This however is not true. A typical automatic generation control strategy is shown
in Fig. 5.5 in which both the objective are coordinated. First we compute the area control error.
A share of this ACE, proportional to i , is allocated to each of the turbine-generator unit of an
area. Also the share of unit- i , i X ( PDK - Pk ), for the deviation of total generation from actual
generation is computed. Also the error between the economic power setting and actual power

17

mywbut.com

setting of unit- i is computed. All these signals are then combined and passed through a
proportional gain Ki to obtain the turbine-governor control signal.

Fig. 5.5 Automatic generation control of unit-i.

18