EconomicDispatch

Announcements
ReadChapter12,concentratingonsections
12.4and12.5.
ReadChapter7.
Homework12is6.59,6.61,12.19,12.22,
12.24,12.26,12.28,12.29,7.1,7.3,7.4,7.5,
7.6,7.9,7.12,7.16;dueThursday,12/3.

EconomicDispatch:Formulation
Thegoalofeconomicdispatchisto
determinethegenerationdispatchthat
minimizestheinstantaneousoperatingcost,
subjecttotheconstraintthattotal
generation=totalload+losses
m

Minimize

CT

Ci ( PGi )
i 1

Such that
m

PGi PD PLosses
i 1

Initiallywe'll
ignoregenerator
limitsandthe
losses
3

UnconstrainedMinimization
Thisisaminimizationproblemwithasingle
equalityconstraint
Foranunconstrainedminimizationa
necessary(butnotsufficient)conditionfora
minimumisthegradientofthefunction
mustbezero, f (x) 0
Thegradientgeneralizesthefirstderivative
formultivariableproblems:
f ( x )

f (x) f (x)
f (x)
x , x ,, x
1
2
n
4

MinimizationwithEqualityConstraint
Whentheminimizationisconstrainedwithan
equalityconstraintwecansolvetheproblem
usingthemethodofLagrangeMultipliers
Keyideaistorepresentaconstrained
minimizationproblemasanunconstrained
problem.
That is, for the general problem
minimize f (x) s.t. g (x) 0
We define the Lagrangian L(x, ) f (x) T g(x)
Then a necessary condition for a minimum is the
L x (x, ) 0 and L (x, ) 0

EconomicDispatchLagrangian
For the economic dispatch we have a minimization
constrained with a single equality constraint
L(PG , )

Ci ( PGi ) ( PD PGi )
i 1

(no losses)

i 1

The necessary conditions for a minimum are

dCi
L
( PGi ) 0 (for i 1 to m)
(PG , )
dPGi
PGi
m

PD PGi 0
i 1

EconomicDispatchExample
What is economic dispatch for a two generator
system PD PG1 PG 2 500 MW and
C1 ( PG1 ) 1000 20 PG1 0.01PG21

$/h

C2 ( PG 2 ) 400 15PG 2 0.03PG22

$/h

Using the Lagrange multiplier method we know:

dC1
( PG1 ) 20 0.02 PG1
dPG1

dC2
( PG 2 ) 15 0.06 PG 2
dPG 2

500 PG1 PG 2 0
7

EconomicDispatchExample,
contd
We therefore need to solve three linear equations
0
20 0.02 PG1
15 0.06 PG 2

500 PG1 PG 2 0
1 PG1 20
0
0.02
0
0.06 1 PG 2 15

1 0 500
1
PG1
312.5 MW
P 187.5 MW
G2

26.2 $/MWh

Economicdispatchexample,contd
Atthesolution,bothgeneratorshavethe
samemarginal(orincremental)cost,andthis
commonmarginalcostisequalto.
Intuitionbehindsolution:
Ifmarginalcostsofgeneratorsweredifferent,
thenbydecreasingproductionathighermarginal
costgenerator,andincreasingproductionat
lowermarginalcostgeneratorwecouldlower
overallcosts.
Generalizestoanynumberofgenerators.

Ifdemandchanges,thenchangeintotalcosts
canbeestimatedfrom.

Economicdispatchexample,contd
Anotherwaytosolvetheequationsisto:
RearrangethefirsttwoequationstosolveforPG1
andPG2 intermsof,
Plugintothirdequationandsolvefor,
Usethesolvedvalueof toevaluatePG1 andPG2.

Thisworksevenwhenrelationshipbetween
generationlevelsand ismorecomplicated:
Equationsaremorecomplicatedthanlinearwhen
therearemaximumandminimumgeneration
limitsorweconsiderlosses.
10

LambdaIterationSolutionMethod
Discussiononpreviouspageleadstolambda
iteration method:
thismethodrequiresauniquemappingfromavalue
oflambda(marginalcost)toeachgeneratorsMW
output: PGi().
foranychoiceoflambda(commonmarginalcost),
thegeneratorscollectivelyproduceatotalMW
output,
themethodthenstartswithvaluesoflambdabelow
andabovetheoptimalvalue(correspondingtotoo
littleandtoomuchtotaloutput),andthen
iterativelybracketstheoptimalvalue.
11

LambdaIterationAlgorithm
Pick L and H such that
m

L
P
(

Gi ) PD 0
i 1

H
P
(

Gi ) PD 0
i 1

H L Do

While

M ( H L ) / 2
m

If

M
H
M
P

)
0
Then

Gi
D
i 1

Else L M
End While

12

LambdaIteration:GraphicalView
Inthegraphshownbelowforeachvalueoflambda
thereisauniquePGi for each generator. This
relationship is the PGi() function.

13

LambdaIterationExample
Consider a three generator system with
IC1 ( PG1 ) 15 0.02 PG1
$/MWh
IC2 ( PG 2 ) 20 0.01PG 2

$/MWh

IC3 ( PG 3 ) 18 0.025PG 3

$/MWh

and with constraint PG1 PG 2 PG 3 1000 MW

Rewriting generation as a function of , PGi ( ),
we have
PG1 ( )

15

0.02
18
PG 3 ( )
0.025

PG 2 ( )

20
0.01
14

LambdaIterationExample,contd
Pick L so

L
P
(

Gi ) 1000 0 and
i=1
m

H
P
(

Gi ) 1000 0
i=1

Try L 20 then

PGi (20) 1000

i 1

15 20 18
0.02

0.01

Try H 30 then

0.025

1000 670 MW

PGi (30) 1000

1230 MW

i 1

15

LambdaIterationExample,contd
Pick convergence tolerance 0.05 $/MWh
Then iterate since H L 0.05

M ( H L ) / 2 25
m

Then since

H
P

25

(25)
1000
280
we
set
Gi
i 1

Since 25 20 0.05

M (25 20) / 2 22.5

m

L
P

22.5

(22.5)
1000
195
we
set
Gi
i 1

16

LambdaIterationExample,contd
Continue iterating until H L 0.05
The solution value of , , is 23.53 $/MWh
*

Once * is known we can calculate the PGi

23.53 15
PG1 (23.5)
426 MW
0.02
23.53 20
PG 2 (23.5)
353 MW
0.01
23.53 18
PG 3 (23.5)
221 MW
0.025
17

ThirtyBusEDExample
Caseiseconomicallydispatched(withoutconsidering
theincrementalimpactofthesystemlosses).

18

GeneratorMWLimits
Generatorshavelimitsontheminimumand
maximumamountofpowertheycan
produce
Typicallytheminimumlimitisnotzero.
Becauseofvaryingsystemeconomicsusually
manygeneratorsinasystemareoperatedat
theirmaximumMWlimits:
Baseload generatorsareattheirmaximumlimits
exceptduringtheoffpeak.
19

LambdaIterationwithGenLimits
In the lambda-iteration method the limits are taken
into account when calculating PGi ( ) :
if calculated production for PGi PGi ,max
then set PGi ( ) PGi ,max
if calculated production for PGi PGi ,min
then set PGi ( ) PGi ,min
20

LambdaIterationGenLimitExample
In the previous three generator example assume
the same cost characteristics but also with limits
0 PG1 300 MW 100 PG 2 500 MW
200 PG 3 600 MW
With limits we get:
m

PGi (20) 1000

i 1

PG1 (20) PG 2 (20) PG 3 (20) 1000

250 100 200 1000

450 MW (compared to 670MW)
m

PGi (30) 1000

i 1

300 500 480 1000 280 MW

21

LambdaIterationLimitExample,contd
Again we continue iterating until the convergence
condition is satisfied.
With limits the final solution of , is 24.43 $/MWh
(compared to 23.53 $/MWh without limits).
Maximum limits will always cause to either increase
or remain the same.
Final solution is:
PG1 (24.43) 300 MW (at maximum limit)
PG 2 (24.43) 443 MW
PG 3 (24.43) 257 MW
22

BackofEnvelopeValues
$/MWhr =fuelcost *heatrate +variableO&M

Typicalincrementalcostscanberoughly
approximated:
Typicalheatrate foracoalplantis10,modern
combustionturbineis10,combinedcycleplantis6
to8,oldercombustionturbine15.
Fuelcosts($/MBtu)arequitevariable,withcurrent
valuesaround2forcoal,3to5fornaturalgas,0.5
fornuclear,probably10forfueloil.
Hydrocoststendtobequitelow,butarefuel
(water)constrained
23
Windandsolarcostsarezero.

InclusionofTransmissionLosses
Thelossesonthetransmissionsystemarea
functionofthegenerationdispatch.
Ingeneral,usinggeneratorsclosertothe
loadresultsinlowerlosses
Thisimpactonlossesshouldbeincluded
whendoingtheeconomicdispatch
Lossescanbeincludedbyslightlyrewriting
theLagrangian toincludelossesPL:

L(PG , ) Ci ( PGi ) PD PL ( PG ) PGi

i 1
i 1
m

24

ImpactofTransmissionLosses
The inclusion of losses then impacts the necessary
conditions for an optimal economic dispatch:
m

L(PG , ) Ci ( PGi ) PD PL ( PG ) PGi .

i 1
i 1
The necessary conditions for a minimum are now:
m

dCi
PL
L
(PG , )
( PGi ) 1
( PG ) 0
dPGi
PGi
PGi

PD PL ( PG ) PGi 0
i 1

25

ImpactofTransmissionLosses

dCi
PL
Solving for , we get:
( PGi ) 1
( PG ) 0
dPGi
PGi

dCi
1

( PGi )

dPGi
PL
1 P ( PG )

Gi
Define the penalty factor Li for the i th generator
(don't confuse with Lagrangian L!!!)
1
Thepenaltyfactor
Li
attheslackbusis

PL
1 P ( PG )
alwaysunity!

Gi

26

ImpactofTransmissionLosses
The condition for optimal dispatch with losses is then
L1 IC1 ( PG1 ) L2 IC2 ( PG 2 ) Lm ICm ( PGm )
1
. So, if increasing PGi increases
Li

PL
1 P ( PG )

Gi
PL
the losses then
( PG ) 0 Li 1.0
PGi
This makes generator i appear to be more expensive
(i.e., it is penalized). Likewise Li 1.0 makes a generator
appear less expensive.
27

CalculationofPenaltyFactors
Unfortunately, the analytic calculation of Li is
somewhat involved. The problem is a small change
in the generation at PGi impacts the flows and hence
the losses throughout the entire system. However,
using a power flow you can approximate this function
by making a small change to PGi and then seeing how
the losses change:
PL
PL
( PG )
PGi
PGi

1
Li
PL
1
PGi

28

TwoBusPenaltyFactorExample

PL
( PG ) 0.0387
PG 2

PL 0.37 MW

0.037
PG 2
10 MW

L2 0.9627

L2 0.9643

29

ThirtyBusEDExample
Nowconsiderlosses.
Becauseofthepenaltyfactorsthegeneratorincremental
costsarenolongeridentical.

30

AreaSupplyCurve
Theareasupplycurveshowsthecosttoproducethe
nextMWofelectricity,assumingareaiseconomically
dispatched 10.00
7.50

Supply
curvefor
thirtybus
system

5.00

2.50

0.00
0

100

200
Total Area Generation (MW)

300

400

31

EconomicDispatch Summary
Economicdispatchdeterminesthebestwayto
minimizethecurrentgeneratoroperatingcosts.
Thelambdaiterationmethodisagoodapproachfor
solvingtheeconomicdispatchproblem:
generatorlimitsareeasilyhandled,
penaltyfactorsareusedtoconsidertheimpactoflosses.

Economicdispatchisnotconcernedwithdetermining
whichunitstoturnon/off(thisistheunitcommitment
problem).
Basicformofeconomicdispatchignoresthe
transmissionsystemlimitations.
32

SecurityConstrainedED
orOptimalPowerFlow
Transmissionconstraintsoftenlimitabilityto
uselowercostpower.
Suchlimitsrequiredeviationsfromwhatwould
otherwisebeminimumcostdispatchinorderto
maintainsystemsecurity.
Needtosolveorapproximatepowerflowin
ordertoconsidertransmissionconstraints.

33

SecurityConstrainedED
orOptimalPowerFlow

ThegoalofasecurityconstrainedEDor
optimalpowerflow(OPF)istodeterminethe
best waytoinstantaneouslyoperatea
powersystem,consideringtransmission
limits.
Usuallybest =minimizingoperatingcost,
whilekeepingflowsontransmissionbelow
limits.
Inthreebuscasethegenerationatbus3must
belimitedtoavoidoverloadingthelinefrom
bus 3 to bus 2
34

SecurityConstrainedDispatch
Bus 2

-22 MW
4 MVR

22 MW
-4 MVR

Bus 1
1.00 PU

357 MW
179 MVR

1.00 PU
0 MW
37 MVR

100%
194 MW OFF AGC -142 MW
49 MVR
232 MVR AVR ON
145 MW 100%
-37 MVR

Home Area

Bus 3

Scheduled Transactions
100.0 MW

-122 MW
41 MVR

100 MW

124 MW
-33 MVR
1.00 PU
179 MW
89 MVR

448 MW AGC ON
19 MVR AVR ON

Needtodispatchtokeepline
frombus3tobus2fromoverloading
35

MultiAreaOperation
Inmultiareasystem,rules havebeenestablished
regardingtransactionsontielines:
InEasterninterconnection,inprinciple,uptonominal
thermalinterconnectioncapacity,
InWesterninterconnectiontherearemorecomplicated
rules

Theactualpowerthatflowsthroughtheentirenetwork
dependsontheimpedanceofthetransmissionlines,
andultimatelydeterminewhatareacceptablepatterns
ofdispatch:
Canresultinneedtocurtail transactionsthatotherwise
satisfyrules.

Economicallyuncompensatedflowthroughotherareas
isknownasparallelpath orloopflows.
SinceERCOTisonearea,alloftheflowsonAClinesare
insideERCOTandthereisnouncompensatedflowon
AClines.
36

SevenBusCase:Oneline
Systemhas
threeareas

44 MW

-42 MW
-31 MW
0.99 PU
3

1.05 PU
1

106 MW -37 MW
AGC ON

62 MW

1.00 PU

-32 MW

Case Hourly Cost

16933 $/MWH

94 MW
AGC ON

79 MW

-77 MW
5

8029 $/MWH
-39 MW

40 MW

1.01 PU
130 MW
40 MVR

168 MW AGC ON
-40 MW
1.04 PU
6

Leftarea
hasone
bus

Toparea
hasfive
buses

-14 MW
32 MW

Top Area Cost

40 MW
20 MVR

80 MW
30 MVR

110 MW
40 MVR

38 MW
-61 MW
1.04 PU

31 MW

20 MW

-20 MW

40 MW
1.04 PU

20 MW

200 MW
0 MVR Left Area Cost
4189 $/MWH
200 MW AGC ON

No net
interchange
between
Any areas.

-20 MW

Right Area Cost

4715 $/MWH

200 MW
0 MVR

201 MW AGC ON

Rightareahasone
bus

37

SevenBusCase:AreaView
Top
40.1 MW
0.0 MW

Area Losses
7.09 MW

-40.1 MW
0.0 MW

Systemhas
40MWof
LoopFlow
Left
Area Losses
0.33 MW

Right
40.1 MW
0.0 MW

Actual
flow
between
areas
Scheduled
flow

Area Losses
0.65 MW

Loopflowcanresultinhigherlosses
38

SevenBus LoopFlow?
Top
4.8 MW
0.0 MW

-4.8 MW
0.0 MW

Left
Area Losses
-0.00 MW

100MWTransaction
betweenLeftandRight

Area Losses
9.44 MW

Right
104.8 MW
100.0 MW

Notethat
Tops
Losseshave
increased
from
7.09MWto
9.44MW

Area Losses
4.34 MW

Transactionhas
actuallydecreased
theloopflow

39