Lecture 2 & 3

ECONOMIC DISPATCH

3.0 INTRODUCTION
The power system engineer is faced with the challenging task of planning and
successfully operating one of the most complex systems of today's civilization. The
efficient planning and optimum economic operation of power system has always
occupied an important position in the electric power industry.

A typical electric power system comprises of three main elements. Firstly,

there are consumers, whose requirements of electrical energy have to be served by
electrical power system. Secondly, there has to be means by which these requirements
are served i.e., the generating plants. Finally, there is transmission and distribution
network, which transports the power from producers to the consumers.

3.1 ECONOMIC DISPATCH IN SYSTEM OPERATION

AN ESSENTIAL BACKGROUND
The prime objective of a power system is to transfer electrical energy from the
generating stations to the consumers with;
 Maximum safety of personal and equipment.
 Maximum continuity (security reliability and stability)
 Maximum quality (frequency and voltage with in limits)
 Minimum cost (optimum utilization of resources).

Electrical energy cannot be stored economically. However, it can be stored as

potential energy in hydro systems and pumped storage schemes, but this represents a
small fraction of the installed capacity of most industrialized nations. The larger
portion of generating plant is thermal. For cold turbo alternator set 6 to 8 hours are
 Lecture 2 & 3

required for preparation and readiness for synchronization. A hot unit can be
synchronized within 15 minutes and fully loaded in 30-60 minutes. It is therefore
essential that the demand must be met as and when it occurs. The present day load
demand handling is a challenging task for Power System Operation Engineer. In this
context system operation necessitates the following for power system:
 it must be highly interconnected
 it must be automated
 it must have Operational Planning
In the early days the power system consisted of isolated stations and their
individual loads. But at present the power systems are highly interconnected in which
several generating stations run in parallel and feed a high voltage network which then
supplies a set of consuming centers. Operating an automated electric power system is
an extremely complex task.
The objective of power system control is to provide a secure supply at a
minimum cost. Figure 3.1 illustrates the operation and data flow in a modern power
system on the assumption of a fully automated power system based on real-time
digital control. Although such an extreme degree of automation has not yet been
implemented, the activities in the boxes are performed by most utilities.

In some cases computation is performed off-line, in others on-line, the degree

of human supervision or intervention, varying considerably from utility to utility.
There are three stages in system control, namely generator scheduling or unit
commitment, security analysis and economic dispatch.
 Generator scheduling involves the hour-by- hour ordering of generator
units on off the system to match the anticipated load and to allow a safety
margin.
 With a given power system topology and number of generators on the
bars, security analysis assesses the system response to a set of
contingencies and provides a set of constraints that should not be violated
 Lecture 2 & 3

if the system is to remain in secure state.

 Economic dispatch orders the minute-to-minute loading of the connected
generating plant so that the cost of generation is a minimum with due
respect to the satisfaction of the security and other engineering
constraints.
These three control functions require reliable knowledge of the system
configuration, i.e., circuit breaker and isolator position and system actual P and Q
flows. This data is collected from thousands of metering devices and transmitted to
control centers, usually over hired telephone lines. It is statistically inevitable that
owing to the numbers of devices involved, interference over communication lines
unreliable data will be present. State estimation is a mathematical algorithm that
provides reliable database out of an unreliable set of information.
In traditional power control centers where all activities are channeled through
human operator, the experienced control engineer looking at wall mimic diagram of
power system takes in multiplicity of data. He mentally assesses their compatibility
with a degree of confidence and he can pinpoint grossly corrupted piece of
information. Human beings are good state estimators.
 Lecture 2 & 3

Figure 3.1 Power System Control Activities

3.3 TIMES SCALES INVOLVED FOR ACTIVITIES IN PLANNING

OPERATION AND CONTROL
Various activities that are combined under the broader area of power system
operation and control do not have the same time scale. For example at one extreme is
the time taken to build a hydropower station (up to 10 years), while on the other
extreme is the time interval between detection and interruption of a fault on power
 Lecture 2 & 3

system (up to 80 m sec). Time scales involved for various activities in power system
planning, operation and control are summarized as follows:
 YEARS
System expansion planning, construction, maintenance scheduling and planned
outages.
 MONTHS
Preliminary load forecasting, generation estimation and contingency planning
 DAYS
Short term load forecasting, reserve assessment and generation scheduling.
 HOURS
Unit commitment, preliminary economic dispatch and contingency analysis.
 MINUTES
Economic dispatch, power interchanges, frequency control and security
assessment.
 SECONDS
Protection and C.B operation, automatic voltage and frequency control.
Time scale particular to system operation point of view may be stated as:
 Unit Commitment – hours to days to week
 Economic Dispatch – minutes to hours
 Security Analysis – every few minutes and on demand
 System equipment – milliseconds to seconds
(Automatic voltage control i.e., tap changers and excitation control and generator set governor
control)

3.4 ECONOMIC DISPATCH

Having solved the unit commitment problem and having ensured through
security analysis that present system is in a secure state then the efforts are made to
adjust the loading on the individual generators to achieve minimum production cost
on minute-to-minute basis. This loading of generators subjected to minimum cost is
 Lecture 2 & 3

in essence the economic dispatch problem and can be defined as a computational

process of allocating generation levels to the generating units in the mix so that the
system load may be supplied entirely and most economically.
Load dispatching is essentially an online activity and is normally
associated with an online forecasting / prediction system. The economic dispatch
calculations are performed every few minutes, which must ensure that all the
committed units, sharing in the economic dispatch calculations, are operating in
such a way that the overall system operation cost is minimum and the recognized
system constraints are satisfied. The comprehensive discussion on basic economic
dispatch problem, review of recent advances and optimal power dispatch can be
referred in [5], [6] and [7] respectively; however, approaches may be listed as:
 Merit Order Approach (old method)
 Equal Incremental Cost Criterion (widely used)
 Linear Programming (Easy Constraint Handling)
 Dynamic Programming
 Non-Linear Programming (Exact Methods)
a) Ist Order Gradient Based Techniques
(Dommel & Tinney Method)
b) Second Order Method (Optimal Power Flow )

3.5 ECONOMIC DISPATCH OF THERMAL UNITS-------METHOD OF

SOLUTIONS
Equal Incremental Cost Criterion (Neglecting Transmission Loss)
Let there be a system of thermal generating units connected to a single bus-bar serving
a received electrical load Pload. It is required to run the machines so that cost of
generation is minimum subject to total generation are equal to total demand when
transmission losses have been neglected.
This problem may be solved by using “Equal Incremental Cost Criterion”.
 Lecture 2 & 3

Working philosophy of the criterion is as: “When the incremental costs of all the
machines are equal, and then cost of generation would be minimum subject to equality
constraints”.

Economic Dispatch – Mathematical Formulation

The economic dispatch problem mathematically may be defined as:
N
Minimize FT   Fi Pi  (3.1)
i 1

N n
Subject to PD   Pi or Φ  Pload   Pi (3.2)
i 1 i 1

Where
FT = F1 + F2 + ……FN is the total fuel input to the system
Fi = Fuel input to ith unit
Pi = The generation of ith unit
This is the constrained optimization problem with equality constraints only.
Three methods can be applied for locating the optimum of the objective function.
These methods are:
 Direct substitution
 Solution by constraint variation
 The method of Lagrange multipliers
However, in this analysis method of Lagrange multiplier will be used. The
working philosophy of this method is that constrained problem can be converted into
an unconstrained problem by forming the Lagrange, or augmented function. Optimum
is obtained by using necessary conditions.
Case-1
No Generation Limits i.e. Pi min.  Pi  Pi max. Neglected.

The augmented unconstrained cost function is given by

 Lecture 2 & 3

L  FT  λ.Φ
 N
 (3.3)
 FT  λ. PD   Pi 
 i 1 
The necessary conditions for constrained local minima of L are the following:
L
0 (3.4)
Pi

L
0 (3.5)
λ
C-I
First condition gives
L FT
  λ.0  1  0
Pi Pi
or
FT F
λ 0 T  λ
Pi Pi
 FT  F1  F2        FN
then
FT dFT
 λ
Pi dPi
and therefore the condition for optimum dispatch is
dFT
λ (3.6)
dp i
or
b i  2c i Pi  λ (3.7)
where
FT  a i  b i Pi  c i Pi2
C-II
Second condition results in
 Lecture 2 & 3

L N
 PD   Pi  0
λ i 1

or
N

P
i 1
i  PD (3.8)

In summary,
“When losses are neglected with no generator limits, for most economical
operation, all plants must operate at equal incremental production cost while
satisfying the equality constraint given by equation (3.2).” From equation (3.7), we
have
λ.  b i
Pi  (3.9)
2c i
The relations given by equation (3.9) are known as the co-ordination
equations. They are function of λ. An analytical solution for λ is given by
substituting the value of Pi in equation (3.8), i.e.,
N
λ.  b i

i 1 2c i
 PD (3.10)

N N
1 b
.λ    i  PD
i 1 2c i i 1 2c i
N
bi
PD  
i 1 2c i
λ N
(3.11)
1

i 1 2c i

Optimal schedule of generation is obtained by substituting the value of λ from eq.

(3.11) into equation (3.9).

Solution of Equation (3.9) Iteratively

In an iterative search technique, starting with trial value of λ, a better value of λ
 Lecture 2 & 3

is obtained by extrapolation, and process is continued until ∆Pi is within a specified

accuracy. However rapid solution is obtained by the use of gradient method. Equation
(3.10) can be written as
f λ.  PD
Expanding left hand side of the above equation in Taylor’s series about an
operating point λ (k) and neglecting higher order terms results in

 df λ. 
k

f λ.
k  k 
  Δλ.  PD
 dλ 
PD  f λ.
k 
Δλ.k   k 
 df λ. 
 
 dλ 
. k  ΔP k  ΔP k 
Δλ  k   (3.16)
 df λ.  1
   2c
 dλ  i

and therefore
λ.k 1  λ.k   Δλ.k  (3.17)
where
N
ΔP k   PD   Pik  (3.18)
i 1

The process is continued until ∆P(k) is less than a pre-specified accuracy.

Case II
Generation limits i.e., Pi(min) ≤ Pi ≤ Pi(max.) Included
The power output of any generator should not exceed its rating nor should it be
below that necessary for stable boiler operation. Thus generators are restricted to be
within given maximum and minimum limits. The problem is to find the real power
generation for each unit such that objective function (i.e., total production cost) is
minimum, subject to equality constraints and the inequality constraints i.e.,
N
Minimize: FT   Fi Pi 
i 1
 Lecture 2 & 3

N
Subject to: Φ  PD   Pi
i 1

Pi  Pi max.  0
and:  for i =1,2,…,N
Pi min.  Pi  0 

This is constrained optimization problem both with equality and inequality
constraints. The optimization problem with equality and inequality constraints is
handled well by Lagrange multiplier method. However, Khun-Tucker conditions
complement the Lagrange conditions to include inequality constraints as additional
terms.
For establishing optimal solution for this problem, we consider the case of two
machines and would be generalized for N machines. The problem may be stated as:
Minimize: FT  F1 P1   F2 P2 
Subject to: ΦP1 , P2   PD  P1  P2

 g  P   P  P   0
  
P  P1  P   1  1  1 1
 
1 1

 g 2  P1   P1  P1  0
  

 g  P   P  P   0
  
P2  P2  P2   3  2  2 2

 g 4  P2   P2  P2  0


Lagrange function becomes

LP, λ, μ   FT  λ.ΦP1 , P2   μ 1g1 P1   μ 2 g 2 P1   μ 3 g 3 P2   μ 4 g 4 P2 
  
 F1 P1   F2 P2   λ.PD  P1  P2   μ.1 P1  P1  μ. 2 P1  P1 
  
 μ. 3 P2  P2  μ. 4 P2  P2 
The necessary conditions for an optimum for the point Po, λo, µo are:
Condition 1
L
P, λ, μ  0
Pi
 Lecture 2 & 3

F1P1   λ  μ.1  μ. 2  0
F2 P2   λ  μ.3  μ. 4  0

Condition 2
Φ i P  0
PD  P1  P2  0
Condition 3
g i P  0

P1  P1  0

P1  P1  0

P2  P2  0

P2  P2  0

Condition 4
μ.g i P  0
μ.i   0

 
μ.1 P1  P1  0 μ.  0 1

μ. P
2 1

 P   0 μ.  0
1 2

μ. P
3 2  P   0 μ.  0

2 3

μ. P
4

2  P   0 μ.  0
2 4

Case-I
If optimum solution occurs at values for P1 and P2 that are not at either upper
limit or lower limit’ then all µ values are equal to zero and
F1P1   F2 P2   λ
That is, the incremental cost associated with each variable is equal and this
value is exactly the λ.
 Lecture 2 & 3

Case- II
Now suppose that the optimum solution requires that P1 be at its upper limit
i.e., P  P
1 1


 0 and that P2 is not at its upper or lower limit. Then

μ.1  0 and μ. 2  μ.3  μ. 4  0

From condition-1
F1P1   λ  μ.1  F1P1   λ
F2 P2   λ

Therefore, the incremental cost associated with the variable that is at is upper
limit will always be less than or equal to λ, whereas the variable that is not at
limit will exactly equal to λ.
Case- III
Now suppose that optimum solution requires that P1 be at its lower limit
i.e., P
1


 P1  0 and that P2 is not at its upper and lower limit. Then

μ. 2  0 and μ1  μ.3  μ. 4  0
From Condition I, we get:
 F1P1   λ  μ. 2  F1P1   0
F2 P2   λ

Therefore, the cost associated with a variable at its lower limit will be greater
than or equal to λ, whereas, again incremental cost associated with variable
that is not at limit will exactly equal to λ.
Case- IV
If the optimum solution requires that both P1, P2 are at limit and equality
constraint can be met, then λ and non-zeroµ values are indeterminate. Let
P1  P1  0

P2  P2  0
Then μ.1  0 μ.3  0 μ. 2  μ. 4  0
Condition-1 would give
 Lecture 2 & 3

F1P1   λ  μ.1
F2 P2   λ  μ. 2
Specific values for λ, µ1 and µ2 would be undetermined.
For the general problem of N variables
Minimize: FT Pi   F1 Pi   F2 P2   ...  FN PN 

Subject to: L  P1  P2  ...  PN  0

P  P  0 
And: i

i  for 1  1,2,..., N
Pi  Pi  0 


Let the optimum lie at Pi = Pi0, i= 1,2,…,N and assume that at least one xi is
not at limit. Then,
if Pi   Pi and Pi   Pi then FiPi   λ

if Pi   Pi then FiPi   λ

if Pi   Pi then FiPi   λ

3.7.3 λ ITERATION METHOD

The incremental production cost of a given plant over a limited range is given
by
dFi
 a i  b i Pi (1)
dPi
Where bi = slope of incremental production cost curve
ai = y-intercept of incremental production cost curve
The necessary condition for optimum schedule is as:
dFi
λ (2)
dPi
Subject to equality and inequality constraints i.e.,
 Lecture 2 & 3

N
Φ  PD   Pi (3)
i 1

Pi  Pi max.  0
fori  1,2,3,..., N
Pi min.  Pi  0 

For optimal schedule equations (2) and (3) can be solved simultaneously. As
inequality constraints have also to be taken into account, the following iterative
method known as λ iteration method may be used for solution.

1. Assume suitable value λo. This value should be more than the largest intercept
of the incremental cost characteristic of various generators.
2. Compute the individual generations P1, P2,…,PN corresponding to the
incremental cost of production from equation 2. In case generation at any bus
is violated during that iteration and the remaining load is distributed among the
remaining generators.
3. Check if the equality
N

P
i 1
i  PD is satisfied.

4. If not, make a second guess λ′ and repeat the above steps.

3.10 PROBLEM
PROBLEM #1
This problem has been taken as standard test system for testing the algorithms in IEEE Transaction
papers.
The fuel costs functions for three thermal plants in $/h are given by
F1 (P1) = 500 + 5.3 P1 + 0.004 P12
F2 (P2) = 400 + 5.5 P2 + 0.006 P22
F3 (P3) = 200 + 5.8 P3 + 0.009 P32

If the total load to be supplied PD = 800 MW, then find the optimal
 Lecture 2 & 3

dispatch and total cost by the following methods:

1. Analytical method
2. Graphical demonstration
3. Iterative technique using gradient method
Given that line losses and generation limit have been neglected.

Solution:

N b
PD   i
i1 2ci
λ N
1
 2c
i1 2
b b b
PD  1  2  3 5.3 5.5 5.8
2c1 2c2 2c3 800 0.008 0.012 0.018
 1  1  1  1  1  1
2c1 2c2 2c3 0.008 0.012 0.018

800  1443.0555
λ  8.5$/MWh
263.8889
The co-ordination equation is given by
λ  b2
P2 
2c 2

Substituting the values of , we have optimal dispatch,

λ  b1 8.5  5.3
P10    400.00
2c1 2(0.004)

0 λ  b 2 8.5  5.6
P2    250.00
2c 2 2(0.006)

0 λ  b 3 8.5  5.8
P3    150.00
2c 3 2(0.009)
 Lecture 2 & 3

P10 + P20 + P30 = 400+250+150 = 800 MW = PD

2. The necessary conditions for optimal dispatch are.

dF1
 5.3  0.008P1  λ
dP1

dF2
 5.5  0.012P2  λ
dP2

dF3
 5.8  0.018P3  λ
dP3
Subject to P1 + P2 + P3 = PD
To demonstrate the concept of equal incremental cost for optimal dispatch, we
plot the equal incremental cost of each plant on the same graph as shown in figure3.
To obtain a solution various values of  could be tried until one is found which
produces Pi = PD for each , if Pi < PD, we increase  otherwise if Pi > PD we
reduce . Thus the horizontal dashed line move up or down until at optimum point 0,
Pi = PD
For 0 = 8.5 P10 = 400 P20 = 250 P30 = 150
Satisfying Pi = PD
 Lecture 2 & 3

Figure 3.2 Plot of Incremental Costs

3. For the solution using iterative method, we assume starting value of (1) = 6.0
from the co-ordination equations.

λ  bi
Pi 
2c i

We find Pi and then check Pi = PD if this condition is not satisfied, we

update  by
(k 1) (k) k
λ λ  Δλ
(k)
(k) ΔP
Where Δλ 
1

2c 2

ITERATION 1
λ (1)  6.0
6.0  5.3
P1(1)   87.50
2(0.004)
6.0  5.5
P2(1)   41.67
2(0.006)
 Lecture 2 & 3

6.0  5.8
P3(1)   11.11
2(0.009)

Pi(1) = 87.50 + 41.67 + 11.11 = 140.28

PD = 800 MW
P(1) = 800-140.2777 = 659.72
Pi(1)  PD we calculate
ΔP (1) 659.7222
Δλ (1)
   2.5
1 1 1 1 1 1
   
2c1 2c 2c 3 0008 0.12 0.019

Thus new value of  is

(2) = (1) +(1) = 6.0+2.5=8.5

ITERATION 2
8.5  5.3
P1(2)   400.00
2(0.004)
8.5  5.5
P2(2)   250.00
2(0.006)
8.5  5.8
P3(2)   150.00
2(0.009)
 Pi(2) = PD - Pi(2) = 800 – (400+250+150) = 800 – 800 = 0
Pi(2) = 0, the equality constraint is met in two iteration.

Optimal Dispatch
P10 = 400 MW
P20 = 250 MW
P30 = 150 MW
0 = 8.5
 Lecture 2 & 3

Total fuel cost is given by

Ft = F1 (P1) + F2 (P2) + F3 (P3)
= {500 + 5.3(400) + 0.004(400)2} + {400+5.5(250) + 0.006(250)}
+ {200+5.8(150)+0.009 (150)2}
Ft = 6, 682.5 $/h.

PROBLEM 2
Let there be three units with following data:

Unit 1: Coal fired steam units

Input - output curve:
 MBtu 
H1    510  7.2 P1  0.00142 P1 150  P1  600
2

 h 

Unit 2: coal fired steam unit

Input - output curve:
 MBtu 
H2   310  7.85P2  0.00194 P2 100  P1  400
2

 h 

Unit 3: coal fired steam unit

Input - output curve:
 MBtu 
H3   78  7.97 P3  0.00482 P3 50  P1  200MW
2

 h 

It is required to determine the economic operating point for these three

units when delivering a total of 850 MW with reference to the following cost data:
Case-I
Unit 1: fuel cost = 1.1 $/MBtu
Unit 2: fuel cost = 1.0 $/MBtu
 Lecture 2 & 3

Unit 3: fuel cost = 1.0 $/Mbtu

Case-II
The fuel cost of Unit 1 decreased to 0.9 $/MBtu

Solution.
Case-I
Fuel costs are given by:
F1 (P1) = H1 (P1) x 1.1 = 561+7.92P1 + 0.001562 P12 $/h
F2 (P2) = H2 (P2) x 1.0 = 310+7.85P2 + 0.00194 P22 $/h
F3 (P3) = H3 (P3) x 1.0 = 78+7.97P3 + 0.00482 P32 $/h
If  is the incremental cost, then condition for optimal dispatch are:

dF1
 7.92  0.003124P  λ (1)
dP1

dF2
 7.85  0.00388  λ
dP2

dF3
 7.97  0.00964  λ
dP3

and P1+P2+P3 = 850 (4)

  7.92
P1 
0.003124
  7.85
P2 
0.00388
  7.97
P3 
0.00964
 Lecture 2 & 3

Putting the values of P1, P2, & P3 in = (4), we have

  7.92   7.85   7.97
   850
0.003124 0.00388 0.00964
 = 9.148 $/MWh

Now
P10 = 393.2 Mw 150  P1  600
P20 = 334.6 Mw 100  P2  400
P30 = 122.2 Mw 50  P3  250
 Pi0 = 393.2 + 334.6+122.2=850
All the generations are within their limits and equality constraint is also
satisfied.
Case-II
Cost of Coal for Unit 1 decreases to = 0.9 $/MBtu
The fuel cost of coal-fired plats is given by
F1 (P) = H1 (P) x 0.9 = ( 510 + 7.2 P1 + 0.00142 P12) x 0.9
= 459 + 6.48 P1 + 0.0128 P12
F2 (P2) = 310 + 7.85 P2 + 0.00194 P22
F3 (P3) = 78 + 7.97 P3 + 0.00482 P32

dF1
 6.48  0.0256P1
dP1

dF2
 7.85  0.00388P2
dP2

dF3
 7.97  0.00964P3
dP3
The necessary conditions for an optimum dispatch are:
 Lecture 2 & 3

dF1
 6.48  0.0256P1  λ (1)
dP1

dF2
 7.85  0.00388P2  λ (2)
dP2

dF3
 7.97  0.00964P3  λ (3)
dP3
And
P1 + P2 + P3 = 850 MW (4)
From equations (1), (2) & (3), we have.
λ  6.48
P1 
0.00256
λ  7.85
P2 
0.00388
λ  7.97
P3 
o.oo964

Substituting the value in equation (4), we get

 = 8.284 $ / Mwh
Substituting the value of , we have optimal schedule as:
P1 = 704.6 MW
P2 = 111.8 MW
P3 = 32.6 MW
Pi = P1 + P2 + P3 = 849.0 Mw  850 Mw
This schedule satisfies the equality constraint, but unit 1 and unit 3 are not
within the limits. Unit 1 violate upper limit & unit 3 violate lower limit. To
solve this problem, we clamp the violated generations to their
corresponding limits and optimal set is obtained by satisfying necessary
conditions.
Unit 1 is fixed to Max limit i.e., P1 = 600 Mw
 Lecture 2 & 3

Unit 3 is fixed to Min limit i.e., P3 = 50 Mw

 P1 + P2 + P3 = 850
P2 = 850- (P1+P3) = 850- (600+50) = 200 Mw
Now the schedule is as:
P1 = 600 Mw
P2 = 200 Mw
P3 = 50 Mw
The necessary conditions for this schedule are as:
dF1
C1   λ  P1  P1 (Max)  600 MW (Clamped)
dP1

dF2
C2   λ Since P2 is within inequality 200  P2  400 = 200Mw
dP2

dF3
C3   λ  P3  P3 (Min)  50MW (Clamped)
dP3

dF1
600  6.48  0.0256(600)  8.016$/MWh
dP1

dF2
200  7.85  0.00388(200)  8.626$/MWh
dP2

dF3
50  7.97  0.00964(50)  8.626$/MWh
dP3
Condition 1
dF1
600  8.016  8.626 True
dP1
Condition 2
 = 8.626 $/MWh True
Condition 3
 Lecture 2 & 3

dF3
50  8.452  8.626 False
dP3

Condition 3 is violated, so for the optimal schedule, we keep unit 1 at its max
limit, allow unit 2 and unit 3 incremental costs equal to .
P1 = 600 Mw
dF2
 7.85  0.00388P2  λ (1)
dP2

dF3
 7.97  0.00964P3  λ (2)
dP3
P2 + P3 = 850 – P1 = 250 MW (3)
From equations (1) & (2), we have
λ  7.85 λ  7.97
P2    250
0.00388 0.00964
 λ  8.576
Now the economic schedule for unit 2 and 3 corresponding to value of  = 8.576
$/MWh
P2 = 187.1 Mw
P3 = 62.90 Mw
dF1
600  8.016 < 8.576 True
dP1

dF2 dF3
  8.576. True
dP2 dP3
The figure represents the graph of the economic schedule.

PROBLEM # 3
Unit 1: H1 = 80 + 8 P1 + 0.024 P12 20  P1  100
Unit 2: H2 = 120 + 6 P2 + 0.04 P22 20  P2  100
Where
 Lecture 2 & 3

Hi = Fuel input to unit i in Mbtu/hour

Pi = Unit output in Mw.
1. Plot input/output characteristic for each unit.
2. Calculate net heat rate in Btu/Kwh and plot against output in Mw
3. Assume Fuel cost 1.5 $/Mbtu. Calculate the incremental production cost in $/Mwh
of each unit and plot against output in Mw.

Solution
1. Plot input/output characteristic for each unit.
UNIT 1 UNIT 2
P1 (Mw) H1 (Mbtu/h) P2 (Mw) H2 (Mbtu/h)
20 249.6 20 256.0
30 341.6 30 336.0
40 438.4 40 424.0
50 540.0 50 520.0
60 646.4 60 624.0
70 757.6 70 736.0
80 873.6 80 856.0
90 994.4 90 984.0
100 1120.0 100 1120.0

20  P1  100
H1=8 P1+0.024 P12+80
 Lecture 2 & 3

1200

1000

800
H1
BTU/hr 600

400

200

0
20 30 40 50 60 70 80 90 100
P1 (MW)

20  P1  100
H2=6 P2+0.04 P22+120
 Lecture 2 & 3

1200

1000

800
H2
BTU/hr
600

400

200

0
20 30 40 50 60 70 80 90 100
P2 (MW)

b) Calculate net heat rate in Btu/Kwh and plot against output in MW

UNIT 1 UNIT 2
P1 H1/P1 P2 H2/P2
20 249.6/20 = 12.48 20 256/20 = 12.80
30 341.6/30 = 11.38 30 336/30 = 11.20
40 438.4/40 = 10.96 40 424/40 = 10.60
50 540/50 = 10.8 50 520/50 = 10.40
60 646.4/60 = 10.77 60 624/60 = 10.40
70 757.6/70 = 10.82 70 736/70 = 10.50
80 873.6/80 = 10.92 80 856/80 = 10.70
90 994.4/90 = 11.04 90 984/90 = 10.93
100 1120/100 = 11.20 100 1120/100 = 11.20
 Lecture 2 & 3

H1/P1 vs P1

15

10
H1/P1 5

0
0 20 40 60 80 100 120
P1

H2/P2 vs P2

15

10
H2/P2

0
0 20 40 60 80 100 120
P2

2. Assume Fuel cost 1.5 $/Mbtu. Calculate the incremental production cost in
$/Mwh of each unit ad plot against output in Mw.
F1 (P1) = H1 x 1.5 = 120 + 12P1 + 0.036 P12
F1 (P2) = H2 x 1.5 = 180 + a P2 + 0.06 P22
dF1
 12  0.072 P1
dP1

dF2
 9  0.12 P2
dP2
P1& P2 (Mw) dF1/dP1 ($/Mwh) dF2/dP2 ($/Mwh)
20 13.44 11.4
 Lecture 2 & 3

30 14.16 12.6
40 14.88 13.0
50 15.6 15.0
60 16.32 16.2
70 17.04 17.4
80 17.76 18.6
90 18.48 19.8
100 19.20 21.0

PROBLEM # 4
Unit 1: Coal Fired Steam
H1 (P1) = 510 + 7.2 P1 + 0.00142 P12 150  P1  600 Mw Fuel Cost = 1.1 Rs/Mbtu
Unit 2: Coal Fired Steam
H2 (P2) = 310 + 7.85 P2 + 0.00194 P22 100  P2  400 Mw Fuel cost = 1.0 Rs/Mbtu

1. Determine Economic Schedule for load demand of 728 Mw.

2. Determine total fuel cost/hour.
3. Determine the specific cost at Economic Scheduled generation.
4. Determine the average specific cost of unit 1 & unit 2.
5. For the following capacity charges determine the total cost per unit for unit  1
& Unit # 2
Capacity Charges for Unit 1 = 6 times the av. sp. cost
Capacity Charges for Unit 2 = 4 times the av. sp. cost
Solution
F1 (P1) = H1 (P1) x 1.1 = 561 + 7.92 P1 + 0.001562 P12
F2 (P2) = H2 (P2) x 1.0 = 310 + 7.85 P2 + 0.00194 P12
 Lecture 2 & 3

dF1
 7.92  0.003124 P1  λ  (1)
dP1
dF2
 7.85  0.00388 P2  λ  (2)
dP2
P1  P2  728 (3)
For economic schedule the necessary condition is:
dF1 dF2
 λ
dP1 dP2
From =S (1) & (2), we have,
λ  7.92 λ  7.85
P1  P2 
0.003124 0.00388
Substituting in equation (3), we get,
 = 9.1486 Rs/Mwh
Corresponding to this value of , the optimum values of P1 and P2 (satisfying
equality constraints are :
P1 = 393 MW
P2 = 335 MW
2. Fuel cost per hour
Ft  F1  F2  F1 393  F2 335  3914.8  3157.5 Rs/h
 7072.3 Rs/h

3. The specific cost at Economic Scheduled generation.

Specific Cost of Unit 1.
Sp Cost1 = 3914.8/393 Rs./Mwh
= 9.96134 Rs./Mwh
= 0.996134 Paisa/Kwh
Specific Cost of Unit 2
Sp Cost2 = 3157.5/335
= 9.4253 Rs./Mwh
 Lecture 2 & 3

= 0.9425 Paisa/Kwh
Specific Cost of System = 9.801466 Rs./Mwh = 0.97146 Paisa/Kwh.

4. Specific Cost of Unit 1

% Load Fuel Cost Per Hour (Rs./h) Speicfic Cost (Rs./M wh)
F1 P10  Various Load F1 ( P1 ) / P1
0 F1 P10  561 561/0 
25% F1 P1150  1784.145 178.145/150  11.8943
50% F1 P1300  3077.58 3077.58/300  10.2586
60% F1 P1360  3614.64 3614.64/360  10.0406
70% F1 P1 420  4162.94 4162.94/420  9.911754
80% F1 P1 480  4722.48 4722.48/480  9.83851
90% F1 P1540  5293.28 5293.28/540  9.80236
100% F1 P1600  5875.32 5875.32/600  9.7922

Average Sp Cost of Unit 1 = 61.74618/6 = 10.29103 Rs./Mwh = 10.29103 Rs./Mwh

(Average of Six readings 25% to 90%)
Average Specific Cost of Unit 2.
Average Sp Cost of Unit 2 = 58.88669/6 = 9.814778 Rs./Mwh = 0.9814778 Rs./Kwh
(Average of Six readings 25% to 90%)

Capacity Charges Evaluation

Unit 1
Rate of Capacity Charges = 6 x Av. Sp Cost
= 6 x 10.29103 = 61.74618 Rs./Mwh
= 6.174618 Ps./Kwh

Capacity Charges/h for the declared capacity of 600 Mw = 61.74618 x 600

= 37047.708 Rs./h
Unit 2
Rate of Capacity Charges = 4 x Av. Sp. Cost
 Lecture 2 & 3

= 4 x 9.814778
= 39.259 Rs./h

Capacity Charges /h for the declared capacity of 400 Mw = 39.259 x 400

= 15703.6 Rs./hour.

Total Cost per Unit of Energy = Capacity (fixed) Charges + Av. Sp Cost
Unit 1 = 61.7461 + 10.29103 = 72.03721 Rs./Mwh
Unit 2 = 39.259 + 9.81477 =49.07389 Rs./Mwh

3.9 REFERENCE
[1]. A.J.Wood & Bruce F. Wollenberg, Power Generation , Operation & Control,
John Wiley & Sons, 1996.

[2]. T.H.Talaq, Ferial and El-Hawary, “A Summary of Environmental/Econmoic

Dispatch Alghorithms”, IEEE Tran. On Power Systems, Vol.9, No.3,
August1994, pp.1504-1516.