EXPERIMENT 10

ECONOMIC DISPATCH IN POWER SYSTEMS

10.1 AIM
To understand the basics of the problem of Economic Dispatch (ED) of optimally adjusting the
generation schedules of thermal generating units to meet the system load which are required for
unit commitment and economic operation of power systems.

To understand the development of coordination equations (the mathematical model for ED)
without and with losses and operating constraints and solution of these equations using direct and
iterative methods

10.2 OBJECTIVES
i. To write a program for solving ED problem without and with transmission losses for a given
load condition / daily load cycle using
(a) Direct method
(b) Lambda-iteration method

ii. To study the effect of reduction in operation cost resulting due to changing from simple load
dispatch to economic load dispatch.

iii. To study the effect of change in fuel cost on the economic dispatch for a given load.

iv. To study the use of ED in finalizing the unit commitment for tomorrow’s operating
conditions of power system

10.3 SOFTWARE REQUIRED

‘ECONOMIC DISPATCH’ module of AUPowerlab or equivalent.

10.4 THEORETICAL BACKGROUND

10.4.1 Mathematical Model for Economic Dispatch of Thermal Units Without
Transmission Loss

Statement of Economic Dispatch Problem

In a power system, with negligible transmission loss and with N number of spinning thermal
generating units the total system load PD at a particular interval can be met by different sets of
generation schedules

{PG ( ) , PG ( ) , - - - - - - - - - - - PG ( ) };
1
k
2
k k
N k = 1, 2, - - - - - -NS

Out of these NS sets of generation schedules, the system operator has to choose that set of
schedule which minimizes the system operating cost which is essentially the sum of the
production costs of all the generating units. This economic dispatch problem is mathematically
stated as an optimization problem.

10-1
Given: the number of available generating units N, their production cost functions, their
operating limits and the system load PD,

To determine: the set of generation schedule,

PGi ; i = 1,2,……N (10.1)

which minimizes the total production cost,

N
Min : FT = ™) i(PGi) (10.2)
i=1

and satisfies the power balance constraint

N
- ™3* i – PD = 0 (10.3)
i=1

and the operating limits

PGi,min ”3* i ”3* i,max (10.4)

The unit production cost function is usually approximated by a quadratic function

Fi (PGi) = ai PG2i + bi PGi +ci ; i =1,2, …….N (10.5)

where ai, bi and ci are constants.

Necessary conditions for the existence of a solution to ED problem

The ED problem is given by the equations (10.1) to (10.4). By omitting the inequality constraints
(10.4) tentatively, the reduced ED problem (10.1),(10.2) and (10.3) may be restated as an
unconstrained optimization problem by augmenting the objective function (10.1) with the
FRQVWUDLQWIXQFWLRQ -PXOWLSOLHGE\/D*UDQJHPXOWLSOLHU WRREWDLQWKH/D*UDQJHIXQFWLRQ/DV

N N
Min: L (PG1, ---PGN ™) i(PGi) –> ™3* i – PD] (10.6)
i=1 i=1

The necessary conditions for the existence of solution to (10.6) are given by

˜/˜3* i = 0 = dFi (PGi) / dPGi – i =1,2, …..N (10.7)

N
˜/˜   ™3* i – PD (10.8)
i=1

The solution to ED problem can be obtained by solving simultaneously the necessary conditions
(10.7) and (10.8) which state that the economic generation schedules not only satisfy the system
power balance equation (10.8) but also demand that the incremental cost rates of all the units be
eTXDOWR ZKLFKFDQEHLQWHUSUHWWHGDV³LQFUHPHQWDOFRVWRIUHFHLYHGSRZHU´

10-2
When the inequality constraints (10.4) are included in the ED problem the necessary condition
(10.7) gets modified as

dFi(PGi) / dPGi  IRU3* i,min ”3* i ”3* i,max

” IRU3* i = PGi,max
•IRU3* i = PGi,min (10.9)

10.4.2 Methods of Solution for ED Wihtout Loss

The solution to the ED problem with the production cost function assumed to be a quadratic
function, equation (10.5), can be obtained by simultaneously solving equations (10.7) and (10.8)
using a direct method as given below.

dFi(PGi) / dPGi = 2aiPGi + bi  L ««1 (10.10)

From equation (10.10) we obtain

PGi  -bi) / 2ai ; i =1,2, …….N (10.11)

Substituting equation (10.11) in equation (10.8) we obtain

N
™ -bi) / 2ai = PD
i=1

N N
 ™D i) - ™E i / 2ai ) = PD
i=1 i=1

N N
 3'™E i / 2ai) / ™D i) (10.12)
i=1 i=1

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economic schedules PGi ; i=1,2, ….N using equation (10.11). In order to satisfy the operating
limits (10.4) the following iterative algorithm is to be used.

Algorithm for ED without loss (For quadratic production cost function)

Step 1: Compute λ using equation (10.12)
Step 2: Compute using equation (10.11) the economic schedules
PGi ; i=1,2,…..N
Step 3: If the computed PGi satisfy the operating limits
PGi,min ”3* i ”3* i,max ; i=1,2,----N (10.13)

then stop, the solution is reached. Otherwise proceed to step 4

10-3
Step 4: Fix the schedule of the NV number of violating units whose generation PGi violates the
operating limits (10.13) at the respective limit, either PGi,max or PGi,min

Step 5: Distribute the remaining system load PD minus the sum of the fixed generation schedules
to the remaining units numbering NR (= N-19E\FRPSXWLQJ XVLQJHTXDWLRQDQGWKH
PGi ; i ∈ α NR using equation (10.11) where α NR is the set of remaining units.

Step 6: Check whether optimality condition (10.9) is satisfied.

If yes, stop the solution is reached. Otherwise, release the generation schedule fixed at PGi,max or
PGi,min of those generators not satisfying optimality condition (10.19), include these units in the
remaining units, modify the sets .NV .NR and the remaining load. Go to step 5

Example 10.1
Determine the economic generation schedules of three generating units in a power system to
meet the system load of 850 MW. The data of the generating units are given below:

Operating limits:
150MW ≤ PG1 ≤ 600 MW
100MW ≤ PG2 ≤ 400 MW
50MW ≤ PG3 ≤ 200 MW

Production cost function in 102 Rs / h

F1 (P1 ) = 0.00128P12 + 6.48P1 + 459
F2 (P2 ) = 0.00194P22 + 7.85P2 + 310
F3 (P3 ) = 0.00482P32 + 7.97P3 + 78

Solution
Substituting the above cost parameters and PD in equation (10.12) we get

  2
Rs / MWh

6XEVWLWXWLQJWKLVYDOXHRI LQHTXDW ion (10.11) we get

P1 = 704.6 MW
P2 = 111.8MW
P3 = 32.6MW

The solution satisfies the power balance equation since the total generation is equal to 830 MW.
But generation schedules of units 1 and 3 are not within the limits. Set unit 1 to its maximum
output and unit 3 to its minimum output. The dispatch becomes

10-4
 P1 = 600 MW
P2 = 200 MW
P3 = 50MW

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dF2 (PG2 )
λ= = 8.626 102 Rs / MWh
dPG2
PG2 = 200

Compute the incremental cost for units 1 and 3 to check whether the conditions (10.9) are
satisfied

dF1 (PG1 )
= 8.016 102 Rs / MWh
dPG1
PG1 = 600

dF3 (PG3 )
= 8.452 102 Rs / MWh
dPG3
PG3 = 50

Now the incremental cost for unit 1 LVOHVVWKDQ VRXQLWVKRXOGEHDWLWVPD[LPXP+RZHYHU

WKHLQFUHPHQWDOFRVWRIXQLWLVQRWJUHDWHUWKDQ VRXQLWVKRXOGQRWEHIL[HGWRLWVPD[LPXP
To find the economic dispatch, fix unit1 at 600 MW and share the remaining load 850-600 = 250
MW between units 2 and 3 using equal IC rule.

dF2 (PG2 )
= 7.85 + 0.00388 PG2 = λ
dPG2

dF3 (PG3 )
= 7.97 + 0.00964 PG3 = λ
dPG3

P2 + P3 = 250 MW

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 SHU0:K
PG2 = 187.1 MW
PG3 = 62.9 MW

10-5
Check for condition (10.9)

dF1 (PG1 )
= 8.016 102 Rs / MWh
dPG1
PG1 = 600

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PG1 = 600 MW ; PG2 = 187.1 MW; PG3 = 62.9 MW

10.4.3. Economic Dispatch of Thermal Units with Transmission Losses Considered

The problem statement differs from that of the previous problem only in the power balance
constraints equation (10.3.). With the transmission losses added the constraint (10.3) is modified
as

N
3 = ∑ PG i − PD − PL (PG ) = 0 (10.14)
i =1

The transmission loss is a nonlinear function of generation schedules. This will introduce a
change in the LaGrange function equation (10.6). The necessary conditions for the existence of
solution then becomes

∂L dF (PGi ) ∂PL
=0= i −λ +λ ; i = 1,2,− − − − N
∂PGi dPGi ∂PGi (10.15)

∂L N
= 0 = ∑ PGi − PD − PL(PG ) (10.16)
∂λ i =1

Equation (10.15) can be written as

dFi dPGi
=λ ; i = 1,2 − − − N (10.17)
1 − ∂PL ∂PGi

or

Li dFi dPGi = λ ; i = 1,2,− − − N

where Li = penalty factor of ith unit

1
= (10.18)
1 − ∂PL ∂PGi

10-6
The term ∂PL ∂PGi is called the incremental transmission loss with reference to unit i which can
be interpreted as the change in transmission loss resulting due to the change in unit generation in
ith unit. The transmission loss can be represented [1] by nonlinear function (vector-matrix
formulation) of unit generations as

PL = PGt B PG + PGt B0 + B00 (10.19)

Rewriting equation (10.19) in scalar form we get

N N N
PL = ∑∑ PG m B mn PG n + ∑ B mo PG m + B 00
m =1 n =1 m =1 (10.20)
= PL 2 + PL 1 + PL 0

The B terms are called loss coefficients or ‘B-Coefficients’ and the NxN matrix B is always
symmetrical

Equation (10.19) may be rewritten to conform to industry practice, say for a 2 unit system, as

B B12 B10   PG 1 
 11 2
 
PL = [PG1 PG2 1]  B21 B22 B20  PG 2  (10.21)
 2  
 
 B10 2 B20 B00   1 
2 

in which B12 equals B21.

The loss coefficients are assumed to be constant over a certain range of operating condition.

From equation (10.20)

  N  
∂PL 2  ∂   N N N
  
=   ∑ ∑ PG m B mn PG n + PG i ∑ B in PG n +  ∑ PG m B mi  PG i + PG i B ii PG i 
∂PG i  ∂PG i  m=1 n =1 n =1  m≠ i=1  
 ≠i ≠ i ≠i   
(10.22)

Noting that Bmn = Bnm and on simplification, equation (10.22) becomes

N
(∂PL2 ∂PGi ) = 2 ∑ B ij PG j (10.23)
j=1

From equation (10.20) and equation (10.23) we get

N
(∂PL ∂PGi ) = 2 ∑ Bij PG j + B i0 (10.24)
j=1

10-7
Assuming a quadratic production cost function for generator the incremental cost is

(dFi (PGi ) dPGi ) = 2a i PGi + bi (10.25)

Substituting equation (10.24) and (10.25) in equation (10.15) we get

 N 
(2ai PGi + bi ) − λ + λ  2 ∑ Bij PG j + Bi0  = 0 (10.26)
 j =1 

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 ai  N (1 − Bi0 ) bi
 + Bii  PG i + ∑ Bij PG j = − ; i=1,2,……..N (10.27)
λ  j =1
2 2λ
≠i

Equation (10.27) can be written as a system of linear equation as

a1 + B11 B12 B1N PG1 (1-B10) – b1

   

B21 a2 + B22 B2N PG2 = (1-B20) – b2

   

BN1 BN2 aN + BNN PGN (1-BN0) – bN

   

(10.28)

Substituting in equation (10.16) for PL from equation (10.20), we obtain

 N N N
 N
∆P = PD +  ∑∑ PGm Bmn PGn + ∑ Bm 0 PGm + B00  - ∑ PG i = 0 (10.29)
 m =1 n=1 m =1  i =1

which is the power-balance equation. The solution to economic dispatch is given by a set of PGi ;
i=1,2,----1DQG WKDWVDWLVI\ERWKWKHHTXDWLRQVDQG7KHLWHUDWLRQDOJRULWKP
given below can be used to obtain the solution.

10-8
– Iteration Algorithm
Step1: Specify system load level PD

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equation (10.12) and the optimal dispatch PGi ;i=1,2,---N using equation (10.11). Use this value
RI DVWKHLQLWLDOYDOXH

6WHS6XEVWLWXWHWKHYDOXHRI LQHTXDWLRQDQGVROYHIRU3* i ;i=1,2,---N using matrix

inverse or L-U factors

Step 4: Using the PGi ;i=1,2,---1FRPSXWHWKHWUDQVPLVVLRQORVVDQGWKHQPLVPDWFK û3IURP

equation (10.29)

Step 5: With the mismatch tolerance given as ∈, check whether

_ û3_ ∈

If yes stop. Otherwise go to step 6

6WHS8SGDWH E\VHWWLQJ

 (k +1) =  (k ) + û (k ) (10.30)
where

 (k ) −  (k −1)
û (k ) = N N
[û3 ( ) ]
k
(10.31)
∑ PG
i =1
(k )
i − ∑ PG i
i =1
(k −1)

Goto Step 3

Inclusion of operating limits of generator units

The generator unit output is limited by
PG i, min ≤ PG i ≤ PG i, max (10.32)

In order to satisfy this inequality in the above algorithm, after getting the PGi ; i=1,2,……N
from step 3, check for operating limit violations and reset the schedule of the generating unit
hitting the upper limit / lower limit as PGi,max / PGi,min and use these revised schedules in step 4
to compute loss and mismatchû3

10.4.4 Economic Dispatch Software in Unit Commitment Problem

Unit commitment problem is a more complex problem. Tomorrow’s unit commitment (UC)
problem may be stated as follows

Given: The expected system demand levels for the 24 hours of tomorrow and the operating cost,
start up cost and shut down cost of the available N units.

10-9
To determine: from among the many feasible subsets of N generating units , that subset of units
that would satisfy the expected demand at minimum operating cost.

The complexity of the UC problem goes with its dynamic nature. That is , we are interested not
only in determining one subset of units satisfying economically the demand in one particular
hour, we want 24 subsets to satisfy the 24 consecutive hour demands. This involves
consideration of start up and shunt down costs as well as constraints on minimum up time /down
time of the units

Let us now consider a relatively simple sub problem of obtaining a “shut – down rule” in a
system where load changes from a peak to a valley using a “brute-force technique”. This can be
solved using available economic dispatch software. Let us consider the problem given in
Exercise 10.5.5 where the load changes from a peak of 1200 MW to a value of 500 MW in steps
of 50 MW instead 100 MW as given in the exercise. The three connected units has the following
limits

150 ≤ P1 ≤ 600 MW
100 ≤ P2 ≤ 400 MW
50 ≤ P3 ≤ 200 MW

To obtain a ‘shut-down rule’, use a “brute -force technique” where in all combination of units
will be tried for each load level (taken in steps of 50 MW from 1200 to 500). For each of these
combinations apply economic dispatch algorithm and determine the economic dispatch schedules
and the corresponding total fuel cost. Choose that combination which has the lowest cost.

For example, for a load level of 550 MW, the various unit combinations are given below:

S.No Unit 1 Unit 2 Unit 3 Max Min Feasible /

Generation Generation Infeasible
1 Off Off Off 0 0 Infeasible
2 Off Off On 200 50 Infeasible
3 Off On Off 400 100 Infeasible
4 Off On On 600 150 Feasible
5 On Off Off 600 150 Feasible
6 On Off On 800 200 Feasible
7 On On Off 1000 250 Feasible
8 On On On 1200 300 Feasible

Out of the eight available unit combinations only the last five combinations are feasible to supply
the 550 MW. For each one of these combinations run the economic dispatch software and
determine the generation schedules and the corresponding total fuel costs. It may be checked that
the combination 5 gives the least cost schedule. Hence when the system load level is 500 MW, it
is preferable to keep generating unit 1 running.

10-10
10.5 EXERCISES

10.5.1 Write a program in ‘C’ language to solve the Economic Dispatch problem of a power
system with thermal units only for a given daily load cycle. Assume that the production
cost function of these units is quadratic and the transmission loss of the system is
negligible. Use the algorithm given in section 10.4. The program should have three
sections: input section, compute section and output section.

I. Input Section
The data to be read from an input file should contain the following:
(i) Number of thermal units in the system
(ii) Cost coefficients ai , bi , and ci , with cost in hundreds of rupees per hour for all
the units.
(iii) Maximum and minimum MW operating limits of all the units.
(iv) Daily load cycle in MW.

II. Compute Section

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economic generation schedules for each one of the load levels in the load cycle using
the algorithm given in section 10.4.

III. Output Section

Create an output file in a report form comprising the following:
(i) Student information : as specified in exercise 2.5.1 under experiment 2.
(ii) Input data: with proper headings
(iii) Results obtained: with proper headings for each load level
(a) Economic generation schedule of each unit
(b) Incremental fuel cost of each unit at economic schedule
(c) Incremental cost of received power.

10.5.2 Write a program in ‘C’ language for the problem s tated in exercise 10.5.1 but with
transmission loss taken into account and using the -iteration algorithm given in
section 10.4.

I. Input section
Additional data to be read:
Transmission loss coefficient matrix.

II. Compute Section

8VH -iteration algorithm given in section 10.4.
Additional quantity to be computed:
Transmission loss at each one of the load levels in the load cycle.

10-11
 III. Output Section
Additional results to be obtained:
(i) Transmission loss for each one of the load levels in the load cycle
(ii) Penalty factor of all the units for each one of the load levels in the load
cycle
(iii) Incremental cost of received power.
(iv) Details of convergence characteristic: YHUVXVLWHUDWLRQQXPEHURQO\RQ
user demand).

10.5.3 The system load in a power system varies from 250 MW to 1250 MW. Two thermal
units are operating at all times and meeting the system load. Incremental fuel cost in
hundreds of rupees per Megawatt hour for the units are

dF1 / dP1 = 0.0056 P1 + 5.6 ; P1 in MW

dF2/ dP2 = 0.0067 P2 + 4.5 ; P2 in MW
The operating limits of both the units are given by
100 ”31, P2 ”0:

Assume that the transmission loss is negligible.

(a) Determine using the program developed in 10.5.1 the economic (minimum fuel
cost) generation schedule of each unit, the incremental fuel cost of each unit and
the incremental cost of received power for different load levels from 250 to
1250 MW in steps of 100 MW

(b) Draw the following characteristics from the results obtained in (a).
(i) Incremental cost of received power in hundreds of rupees per MWh versus
system load in MW.

(ii) Unit outputs P1 and P2 in MW versus system load in MW.

(c) Determine the saving in fuel cost in hundreds of rupees per hour for the
economic distribution of a total load of 550 MW between the two units
compared with equal distribution of that load between the two units.

10.5.4 For the system given in exercise 10.5.3 take into account the transmission loss.
(a) Determine the economic loading of each unit to meet a total customer load of
550 MW, using the program developed in 10.5.2

(b) What is the transmission loss of the system at the economic loading?
(c) Determine the penalty factor for each unit and the incremental fuel cost at each
generating bus.
10-12
 (d) Determine also the incremental cost of received power (or system λ). Assume
that the loss coefficient in per unit on a 100 MVA base of the customer load level
of 550 MW are given by

B11 B12 B10/2 10-12 8.383183 -0.049448 0.375082

-3
B21 B22 B20/2 = 10 X 5.963568 0.194971
B10/2 B20/2 B00 0.090121

10.5.5 In a power system with negligible transmission loss, the system load varies from a
peak of 1200 MW to a valley of 500 MW. There are three thermal generating units
which can be committed to take the system load. The fuel cost data and generation
operation limit data are given below.

In hundreds of rupees per hour:

F1 = 392.7 + 5.544 P1 + 0.001093 P12 ; P1 in MW

F2 = 217.0 + 5.495 P2 + 0.001358 P22 ; P2 in MW
F3 = 65.5 + 6.695 P3 + 0.004049 P32 ; P3 in MW

Generation limits:
150 ≤ P1 ≤ 600 MW
100 ≤ P2 ≤ 400 MW
50 ≤ P3 ≤ 200 MW

There are no other constraints on system operation. Obtain an optimum (minimum fuel
cost) unit commitment table for each load level taken in steps of 100 MW from 1200 to
500. Adopt “brute force enumeration” technique. For each load level obtain economic
schedules using the Economic Dispatch Program developed in exercise 10.5.1 for each
“feasible” combination of units and choose the lowest fuel cost schedule among these
combinations.

Show the details of economic schedule and the component and total costs of operation for
each feasible combination of units for the load level of 900 MW.

10-13