Module 4

Economic Operation of Power System &

Unit Commitment

Table of Contents

Economic operation of power systems

4.1. Introduction ..........................................................................................................................................................2
4.2. Performance Curves .............................................................................................................................................3
4.3. Economic Generation Scheduling Neglecting Losses And Generator Limits......................................................5
4.4. Economic Schedule Including Limits on Generator (Neglecting Losses)............................................................9
4.5. Economic Dispatch Including Transmission Losses ..........................................................................................11
4.6. Derivation of Transmission Loss Formula .........................................................................................................16
Unit Commitment ........................................................................................................................................................22
4.7. Introduction ........................................................................................................................................................22
4.8. Constraints in Unit Commitment .......................................................................................................................23
4.8.1. Spinning reserve ............................................................................................................................................23
4.8.2. Thermal unit constraints.................................................................................................................................24
4.8.3. Hydro-constraints ...........................................................................................................................................25
4.8.4. Must run .........................................................................................................................................................26
4.8.5. Fuel constraints ..............................................................................................................................................26
4.9. Unit Commitment—Solution Methods ..............................................................................................................26
4.9.1. Priority list method ........................................................................................................................................26
4.9.2. Dynamic-Programming Solution: ..................................................................................................................27
4.1. Introduction
One of the earliest applications of on-line centralized control was to provide a central facility, to
operate economically, several generating plants supplying the loads of the system. Modern integrated
systems have different types of generating plants, such as coal fired thermal plants, hydel plants, nuclear
plants, oil and natural gas units etc. The capital investment, operation and maintenance costs are different
for different types of plants. The operation economics can again be subdivided into two parts.

i) Problem of economic dispatch, which deals with determining the power output of each plant to meet the
specified load, such that the overall fuel cost is minimized.
ii) Problem of optimal power flow, which deals with minimum – loss delivery, where in the power flow,
is optimized to minimize losses in the system. In this chapter we consider the problem of economic dispatch.

During operation of the plant, a generator may be in one of the following states:

1. Base supply without regulation: the output is a constant.

2. Base supply with regulation: output power is regulated based on system load.
3. Automatic non-economic regulation: output level changes around a base setting as area control error
changes.
4. Automatic economic regulation: output level is adjusted, with the area load and area control error,
while tracking an economic setting.

Regardless of the units operating state, it has a contribution to the economic operation, even though its
output is changed for different reasons. The factors influencing the cost of generation are the generator
efficiency, fuel cost and transmission losses. The most efficient generator may not give minimum cost, since
it may be located in a place where fuel cost is high. Further, if the plant is located far from the load centers,
transmission losses may be high and running the plant may become uneconomical. The economic dispatch
problem basically determines the generation of different plants to minimize total operating cost.

Modern generating plants like nuclear plants, geo-thermal plants etc, may require capital investment
of millions of rupees. The economic dispatch is however determined in terms of fuel cost per unit power
generated and does not include capital investment, maintenance, depreciation, start-up and shut down costs
etc.
4.2. Performance Curves
i) Input-Output Curve

This is the fundamental curve for a thermal plant and is a plot of the input in British thermal units
(Btu) perhour versus the power output of the plant in MW as shown in Fig1.

ii) Heat Rate Curve

The heat rate is the ratio of fuel input in Btu to energy output in KWh. It is the slope of the input –
output curve at any point. The reciprocal of heat – rate is called fuel –efficiency. The heat rate curve is a plot
of heat rate versus output in MW. A typical plot is shown in Fig .2

Fig 2: Heat rate curve.

 iii) Incremental Fuel Rate Curve

The incremental fuel rate is equal to a small change in input divided by the corresponding change
in output.

The unit is again Btu / KWh. A plot of incremental fuel rate versus the output is shown in Fig 3

iv) Incremental cost curve

The incremental cost is the product of incremental fuel rate and fuel cost (Rs / Btu or $ / Btu). The
curve in shown in Fig. 4. The unit of the incremental fuel cost is Rs / MWh or $ /MWh.

In general, the fuel cost Fi for a plant, is approximated as a quadratic function of the generated output PGi.
 The incremental fuel cost is given by

The incremental fuel cost is a measure of how costly it will be produce an increment of power. The
incremental production cost, is made up of incremental fuel cost plus the incremental cost of labour, water,
maintenance etc. which can be taken to be some percentage of the incremental fuel cost, instead of resorting
to a rigorous mathematical model. The cost curve can be approximated by a linear curve. While there is
negligible operating cost for a hydel plant, there is a limitation on the power output possible. In any plant,
all units normally operate between PGmin, the minimum loading limit, below which it is technically infeasible
to operate a unit and PGmax, which is the maximum output limit.

4.3. Economic Generation Scheduling Neglecting Losses And Generator Limits

The simplest case of economic dispatch is the case when transmission losses are neglected. The model
does not consider the system configuration or line impedances. Since losses are neglected, the total
generation is equal to the total demand PD. Consider a system with ng number of generating plants supplying
the total demand PD. If Fi is the cost of plant i in Rs/h, the mathematical formulation of the problem of
economic scheduling can be stated as follows:

This is a constrained optimization problem, which can be solved by Lagrange’s method.

Lagrange Method for Solution of Economic Schedule

The problem is restated below:

The second equation is simply the original constraint of the problem. The cost of a plant
Fi depends only on its own output PGi, hence

The above equation is called the co-ordination equation. Simply stated, for economic generation scheduling
to meet a particular load demand, when transmission losses are neglected and generation limits are not
imposed, all plants must operate at equal incremental production costs, subject to the constraint that the total
generation be equal to the demand. From we have
 It can be seen that l is dependent on the demand and the coefficients of the cost function.
Example 1.
The fuel costs of two units are given by
4.4. Economic Schedule Including Limits on Generator (Neglecting Losses)
The power output of any generator has a maximum value dependent on the rating of the generator. It
also has a minimum limit set by stable boiler operation. The economic dispatch problem now is to schedule
generation to minimize cost, subject to the equality constraint.

The procedure followed is same as before i.e. the plants are operated with equal incremental fuel costs, till
their limits are not violated. As soon as a plant reaches the limit (maximum or minimum) its output is fixed
at that point and is maintained a constant. The other plants are operated at equal incremental costs.

Example 3: Incremental fuel costs in $ / MWh for two units are given below:
Now at light loads unit 1 has a higher incremental cost and hence will operate at its lower limit of 20 MW.
Initially, additional load is taken up by unit 2, till such time its incremental fuel cost becomes equal to 2.2$ /
MWh at PG2 = 50 MW. Beyond this, the two units are operated with equal incremental fuel costs. The
contribution of each unit to meet the demand is obtained by assuming different values of l; When l = 3.1 $ /
MWh, unit 2 operates at its upper limit. Further loads are taken up by unit 1. The computations are show in
Table below.

For a particular value of l, PG1 and PG2 are calculated. Fig below Shows plot of each unit output versus the
total plant output. For any particular load, the schedule for each unit for economic dispatch can be obtained.
Example 4.

In example 3, what is the saving in fuel cost for the economic schedule compared to the case where the
load is shared equally. The load is 180 MW.

Solution:

From Table it is seen that for a load of 180 MW, the economic schedule is PG1 = 80 MW and PG2 = 100
MW. When load is shared equally PG1 = PG2 = 90 MW. Hence, the generation of unit 1 increases from 80
MW to 90 MW and that of unit 2 decreases from 100 MW to 90 MW, when the load is shared equally. There
is an increase in cost of unit 1 since PG1 increases and decrease in cost of unit 2 since PG2 decreases.

4.5. Economic Dispatch Including Transmission Losses

When transmission distances are large, the transmission losses are a significant part of the generation
and have to be considered in the generation schedule for economic operation. The mathematical formulation
is now stated as
The minimum operation cost is obtained when the product of the incremental fuel cost and the penalty factor
of all units is the same, when losses are considered. A rigorous general expression for the loss PL is given
by

where Bmn, Bno , Boo called loss – coefficients , depend on the load composition. The assumption here is
that the load varies linearly between maximum and minimum values. A simpler expression is
 The expression assumes that all load currents vary together as a constant complex fraction of the total load
current. Experiences with large systems have shown that the loss of accuracy is not significant if this
approximation is used. An average set of loss coefficients may be used over the complete daily cycle in the
coordination of incremental production costs and incremental transmission losses. In general, Bmn = Bnm
and can be expanded for a two plant system as

Example 5

A generator is supplying a load. An incremental change in load of 4 MW requires generation to be increased

by 6 MW. The incremental cost at the plant bus is Rs 30 /MWh. What is the incremental cost at the receiving
end?

Solution:
4.6. Derivation of Transmission Loss Formula
An accurate method of obtaining general loss coefficients has been presented by Kron. The method is
elaborate and a simpler approach is possible by making the following assumptions:

(i) All load currents have same phase angle with respect to a common reference
(ii) The ratio X / R is the same for all the network branches.
Consider the simple case of two generating plants connected to an arbitrary number of loads through a
transmission network as shown in Fig below.
 Unit Commitment

4.7. Introduction

The total load of the power system is not constant but varies throughout the day and reaches a different
peak value from one day to another. It follows a particular hourly load cycle over a day. There will be
different discrete load levels at each period as shown in Figure 4.1 below.

Fig 4.1: Discrete levels of system load of daily load cycle

Due to the above reason, it is not advisable to run all available units all the time, and it is necessary
to decide in advance which generators are to startup, when to connect them to the network, the sequence in
which the operating units should be shut down, and for how long. The computational procedure for making
such decisions is called unit commitment (UC), and a unit when scheduled for connection to the system is
said to be committed.

The problem of UC is nothing but to determine the units that should operate for a particular load. To
‘commit’ a generating unit is to ‘turn it on’, i.e., to bring it up to speed, synchronize it to the system, and
connect it, so that it can deliver power to the network.
4.8. Constraints in Unit Commitment

There are many constraints to be considered in solving the UC problem.

4.8.1. Spinning reserve

It is the term used to describe the total amount of generation available from all synchronized
units on the system minus the present load and losses being supplied. Here, the synchronized units
on the system may be named units spinning on the system.

Let PGsp be the spinning reserve, the power generation of the i th synchronized unit, PD the
total load on the system, and pL the total loss of the system:

The spinning reserve must be maintained so that the failure of one or more units does not cause
too far a drop in system frequency. Simply, if one unit fails, there must be an ample reserve on the
other units to make up for the loss in a specified time period.

The spinning reserve must be a given a percentage of forecasted peak load demand, or it must
be capable of taking up the loss of the most heavily loaded unit in a given period of time. It can also be
calculated as a function of the probability of not having sufficient generation to meet the load.

The reserves must be properly allocated among fast-responding units and slow-responding units
such that this allows the automatic generation control system to restore frequency and quickly
interchange the time of outage of a generating unit.

Beyond the spinning reserve, the UC problem may consider various classes of ‘scheduled
reserves’ or off-line reserves. These include quick-start diesel or gas-turbine units as well as most
hydro-units and pumped storage hydro-units that can be brought on-line, synchronized, and brought
upto maximum capacity quickly. As such, these units can be counted in the overall reserve assessment
as long as their time to come up to maximum capacity is taken into consideration.
 Reserves should be spread well around the entire power system to avoid transmission system
limitations (often called ‘bottling’ of reserves) and to allow different parts of the system to run as
‘islands’, should they become electrically disconnected.

4.8.2. Thermal unit constraints

A thermal unit can undergo only gradual temperature changes and this translates into a time
period (of some hours) required to bring the unit on the line. Due to such limitations in the operation
of a thermal plant, the following constraints are to be considered.

Minimum up-time: During the minimum up-time, once the unit is operating (up state), it
should not be turned off immediately.

Minimum down-time: The minimum down-time is the minimum time during which the unit
is in ‘down’ state, i.e., once the unit is decommitted, there is a minimum time before it can be
recommitted.

Crew constraints: If a plant consists of two or more units, they cannot both be turned on at the
same time since there are not enough crew members to attend to both units while starting up.

Start-up cost: In addition to the above constraints, because the temperature and the pressure of
the thermal unit must be moved slowly, a certain amount of energy must be expended to bring the unit
on-line and is brought into the UC problem as a start-up cost.

The start-up cost may vary from a maximum ‘cold-start’ value to a very small value if the unit
was only turned off recently, and it is still relatively close to the operating temperature.

Two approaches to treating a thermal unit during its ‘down’ state:

The first approach (cooling) allows the unit’s boiler to cool down and then heat back up to a
operating temperature in time for a scheduled turn-on.

The second approach (banking) requires that sufficient energy be input to the boiler to just
maintain the operating temperature.
 Fig. 4.2: Time-dependent start-up costs

The best approach can be chosen by comparing the costs for the above two approaches.

Let CC be the cold-start cost (MBtu), C the fuel cost, CF the fixed cost (includes crew
expenses and maintainable expenses), α the thermal time constant for the unit, Ct the cost of
maintaining unit at operating temperature (MBtu/hr), and t the time the unit was cooled (hr).

Start-up cost when cooling = Cc (1 – e-t/α) C + CF;

Start-up cost when banking =Ct × t × C + CF.

Upto a certain number of hours, the cost of banking < cost of cooling is shown in Fig. 4.2.

The capacity limits of thermal units may change frequently due to maintenance or unscheduled
outages of various equipment in the plant and this must also be taken into consideration in the UC
problem.

4.8.3. Hydro-constraints

As pointed out already that the UC problem is of much importance for the scheduling of thermal
units, it is not the meaning of UC that cannot be completely separated from the scheduling of a hydro-
unit. The hydro-thermal scheduling will be explained as separated from the UC problem. Operation of
a system having both hydro and thermal plants is, however, far more complex as hydro-
 plants have negligible operation costs, but are required to operate under constraints of water available
for hydro-generation in a given period of time.

The problem of minimizing the operating cost of a hydro-thermal system can be viewed as one
of minimizing the fuel cost of thermal plants under the constraint of water availability for hydro-
generation over a given period of operation.

4.8.4. Must run

It is necessary to give a must-run reorganization to some units of the plant during certain events
of the year, by which we yield the voltage support on the transmission network or for such purpose as
supply of steam for uses outside the steam plant itself.

4.8.5. Fuel constraints

A system in which some units have limited fuel or else have constraints that require them to
burn a specified amount of fuel in a given time presents a most challenging UC problem.

4.9. Unit Commitment—Solution Methods

The most important techniques for the solution of a UC problem are:

i. Priority-list method.
ii. Dynamic programming (DP) method.
iii. Lagrange’s relaxation (LR) method.

Now, the priority-list method and the DP method are discussed here.

4.9.1. Priority list method

It is the simplest unit commitment solution which consists of creating a priority list of units.
Full load average production cost= Net heat rate at full load X Fuel

Cost Assumptions:

1. No load cost is zero

2. Unit input-output characteristics are linear between zero output and full load
3. Startup costs are a fixed amount
4. Ignore minimum up time and minimum down time
Steps to be followed

1. Determine the full load average production cost for each units
2. Form priority order based on average production cost
3. Commit number of units corresponding to the priority order
4. Calculate PG1, PG2 ,PGN from economic dispatch problem for the feasible combinations only.
5. For the load curve shown, Assume load is dropping or decreasing, determine whether dropping
the next unit will supply generation & spinning reserve. If not, continue as it is If yes, go to the
next step.
6. Determine the number of hours H, before the unit will be needed again.
7. Check H< minimum shut down time. If not, go to the last step If yes, go to the next step.
8. Calculate two costs, one is the Sum of hourly production for the next H hours with the unit up
and second one is the Recalculate the same for the unit down + startup cost for either cooling or
banking.
9. Repeat the procedure until the priority.

Merits:

1. No need to go for N combinations

2. Take only one constraint
3. Ignore the minimum up time & down time
4. Complication reduced

Demerits:

1. Startup cost are fixed amount

2. No load costs are not considered

4.9.2. Dynamic-Programming Solution:

Dynamic programming has many advantages over the enumeration scheme, the chief
advantage being a reduction in the dimensionality of the problem. Suppose we have found units in a
system and any combination of them could serve the (single) load.

There would be a maximum of 24 - 1 = 23 combinations to test. However, if a strict priority

order is imposed, there are only four combinations to try:
  Priority 1 unit
 Priority 1 unit + Priority 2 unit
 Priority 1 unit + Priority 2 unit + Priority 3 unit
 Priority 1 unit + Priority 2 unit + Priority 3 unit + Priority 4 unit

The imposition of a priority list arranged in order of the full-load average cost rate would result in a
theoretically correct dispatch and commitment only if:

1. No load costs are zero.

2. Unit input-output characteristics are linear between zero output and full load.
3. There are no other restrictions.
4. Start-up costs are a fixed amount.

In the dynamic-programming approach that follows, we assume that:

1. A state consists of an array of units with specified units operating and

2. The start-up cost of a unit is independent of the time it has been off-line
3. There are no costs for shutting down a unit.
4. There is a strict priority order, and in each interval a specified minimum the rest off-line. (i.e., it
is a fixed amount).amount of capacity must be operating.

A feasible state is one in which the committed units can supply the required load and that meets the
minimum amount of capacity each period.

Forward DP Approach:

One could set up a dynamic-programming algorithm to run backward in time starting from the final
hour to be studied, back to the initial hour. Conversely, one could set up the algorithm to run forward
in time from the initial hour to the final hour. The forward approach has distinct advantages in solving
generator unit commitment. For example, if the start-up cost of a unit is a function of the time it has
been off-line (i.e., its temperature), then a forward dynamic-program approach is more suitable since
the previous history of the unit can be computed at each stage. There are other practical reasons for
going forward. The initial conditions are easily specified and the computations can go forward in time
as long as required. A forward dynamic-programming algorithm is shown by the flowchart given in
fig 4.4. The recursive algorithm to compute the minimum cost in hour K with combination I is
Fcost(K,I)= min[Pcost(K,I)+Scost(K-1,L:K,I)+Fcost(K-1,L)]
Fcost(K, I ) = least total cost to arrive at state (K , I )
Pcost(KI, ) = production cost for state( K ,I )
Scost(K - 1, L: K , I)= transition cost from state (K - 1, L) to state(K , I )

State (K, 1) is the Zth combination in hour K. For the forward dynamic programming approach, we
define a strategy as the transition, or path, from one state at a given hour to a state at the next hour.

Note that two new variables, X and N, have been introduced

X = number of states to search each period
N = number of strategies, or paths, to save at each step.

These variables allow control of the computational effort (see below Figure 4.3). For n complete
enumeration, the maximum number of the value of X or N is 2 n – 1.

Fig 4.3: Restricted search paths in DP algorithm with N = 3 and X = 5

Fig 4.4: Flow chart of Unit commitment via forward dynamic
programming