• Overview of Economic Dispatch (ED)

• Economic Dispatch formulation

• Case 1: No line losses, no generator limit.
• Case 2: No line losses, with generator limit.
• Case 3: With line losses, no generator limit.
• Case 4: With line losses, with generator limit.

Economic Load Dispatch

EE 332: Power Systems

 • In practice and in power flow analysis, there are many choices
for setting the operating points of generators
– in the power flow analysis, generator buses are specified by P and
|V|
– generation capacity is more than load demand - generators can
produce more than the customers can consume
• there are many solution combinations for scheduling generation
– in practice, power plants are not located at the same distance from
the load centers
– power plants use different types of fuel, which vary in cost from
time to time
• For interconnected systems, the objective is to find the real and
reactive power scheduling so as to minimize some operating
cost or cost function

EE 332: Power Systems

 Operating Costs
• Factors influencing the minimum cost of power
generation
– operating efficiency of prime mover and generator
– fuel costs
– transmission losses
• The most efficient generator in the system does not
guarantee minimum costs
– may be located in an area with high fuel costs
– may be located far from the load centers and transmission
losses are high
• The problem is to determine generation at different
plants to minimize the total operating costs

EE 332: Power Systems

 Operating Costs of A Thermal Plant

• Generator heat rate curves lead to the fuel cost curves

• fuel-cost curve of each generating unit is expressed in terms

of the output power
C P   a  b P  c P
i Gi i i Gi i
2

Gi
$/hr Where C  P
i

P
Gi
Gi
 = Cost of generation for unit i
= Output power of unit i

• The derivative is known as the incremental fuel cost

dC  P 
i
 IC  b  2c P $/MWh
Gi
i i i Gi
dP Gi

EE 332: Power Systems

 Economic Dispatch

• Consider cost of operation when selecting generating

units to pick up the load
• ED tries to minimize this cost
• Assume that fuel-cost curve of each generating unit is
known and expressed in terms of the output power,

EE 332: Power Systems

 ED Formulation

• To minimize cost of operation,

m
CT   Ci PGi 
• Subject to: i 1

– Power flow equation (power balance)

m n
f PGi    PGi   PDi  Ploss PG 2 , PG 3 , , PGm   0
i 1 i 1

– Generation limit

PGimin  PGi  PGimax

EE 332: Power Systems

 ED Solution
 The problem can categorized into nonlinear optimization
problem.
min f x 
s.t. g x   0

 Lagrangian of the problem is,

min Lx,    f x   g x 
  is called Lagrange multiplier.

Optimality condition: Lx,  

 0
x
Lx,   Optimal x*,  *
0 Solution


EE 332: Power Systems

 Next……

• We will consider 4 cases.

– Case 1: No line losses, no generator limit.
– Case 2: No line losses, with generator limit.
– Case 3: With line losses, no generator limit.
– Case 4: With line losses, with generator limit.

EE 332: Power Systems

 Case 1: No Line Losses, No Generator Limit

C P
1 G1
 C P
2 G2
 C P
m Gm


P
G1
P
G2
P
Gm

P
D1
P
D2
P
Dn

m
minimize CT   Ci PGi 
i 1
m n
Subject to:  PGi   PDj
i 1 j 1

EE 332: Power Systems

 Case 1: No Line Losses, No Generator Limit

 Lagrangian of the problem is,

C  C    P   P 
~ m n

T T i 1 Gi j 1 Dj

 Optimal condition,
~
C C  P 
T
0    0, i  1,2,, m
i Gi

PGi
P Gi

~
C
0 P  P 0
m n
T

 i 1 j 1
Gi Dj

 Solution, Ci PGi 

ICi    i  1,2,  , m
PGi

EE 332: Power Systems

 Solution Interpretation

 Incremental Cost (IC) is the slope of fuel-cost curve.

 Unit of IC is dollar per MWh.

 IC tells how much it costs to operate this unit for the next
MW power.

 Example: two units with IC1 > IC2.

 This means that, for additional 1 MW power,

– Operating unit 1 cost more than operating unit 2.
– To minimize operation cost, it is reasonable to reduce
power output of unit 1 and increase that of unit 2.
– At optimal, additional cost from unit 1 and 2 should be
the same.

EE 332: Power Systems

 Example
 Two generators with the following cost curve ($/h).
C1 PG1   900  45PG1  0.01PG21 C2 PG 2   2500  43PG 2  0.003PG22
PD  700 MW

C1 PG1  C2 PG 2 

IC1   45  0.02 PG1 IC2   43  0.006 PG 2
PG1 PG 2
PG1  PG 2  PD  700 MW

IC  IC1 2
 45  0.02 P  43  0.006700  P
G1 G1

PG1  84.6 MW PG 2  615.4 MW
IC  IC  46.69 $/MWh
1 2

EE 332: Power Systems

 Example

60

58

56 1
54

52

50
IC1 = IC2 = 46.69
48 2
46

44

42
0 100 200 300 400 500 600 700

P1 = 84.6 MW P2 = 615.4 MW

EE 332: Power Systems

 Case 1: Solution Outline

 In general case with more than 2 generating units, we

know only
– Total load
– IC curves of each unit
 Iterative procedure:
Step 1: Pick initial 
Step 2: Find corresponding power output of each unit
Step 3: If total power < load, increase  or
If total power > load, decrease 
and go back to step 2.
Else, stop.

EE 332: Power Systems

 Case 2: No Line Losses, With Generator Limit

• The power output of any generator should not exceed its

rating nor be below the value for stable boiler operation
– Generators have a minimum and maximum real power output
limits
• The problem is to find the real power generation for each
plant such that cost are minimized, subject to:
– Meeting load demand - equality constraints
– Constrained by the generator limits - inequality constraints

m
CT   Ci PGi 
i 1
m n
 PGi   PDj PGimin  PGi  PGimax
i 1 j 1

EE 332: Power Systems

 Case 2: No Line Losses, With Generator Limit

 Consider min
PGi max
 PGi  PGi

 Assume that ALL UNITS are in operation.

IC G3 operate at upper limit

1
G2,G3 operate IC1 = IC2
at upper limit 2
IC1= IC2 = IC3
3
G1 operate at lower limit
IC2 = IC3

All three generators

operate at lower limit

 When some generating units hit their limit, we can no

longer operate all units at the same ICs.

EE 332: Power Systems

 • Optimal Conditions:

Ci
  for PGi
min max
 PGi  PGi
PGi
Ci
  for PGi  PGi
max
PGi
Ci
  for PGi  PGi
min
PGi

EE 332: Power Systems

 Case 3: With Line Losses, No Generator Limit

C P
1 G1
 C P
2 G2
 C P
m Gm


P
G1
P
G2
P
Gm

Transmission network with losses Ploss

P
D1
P
D2
P
Dn

EE 332: Power Systems

 Case 3: With Line Losses, No Generator Limit

m
 Minimize, CT   Ci PGi 
i 1

 Subject to power flow equation

m n
f PGi    PGi   PDi  Ploss PGi   0
i 1 i 1

 Lagrangian of the problem is,

 m n

CT  CT     PGi   PDi  Ploss PGi 
~
 i 1 i 1 

EE 332: Power Systems

 Case 3: With Line Losses, No Generator Limit
 Optimality condition,

C P   P 
~
CT
 0  i Gi   1  loss   0, i  1,2,3, , m,
PGi PGi  PGi 
~
CT m n
 0   PGi   PDi  Ploss  0
 i 1 i 1

 Rewrite optimality condition #1,

1 Ci PGi 
  i  1,2, , m
 Ploss  PGi
1  
 PGi 
1
Define “penalty factor”, Li Li 
 P
1  loss
PGi
m n
Li  ICi   i  1,2,, m P P Gi Di  Ploss  0
i 1 i 1
EE 332: Power Systems
 Case 3: Solution Outline, Penalty Factor Known

 Assume that the following is known.

– Total load
– IC curves of each unit
– Penalty factor of each unit (from explicit loss
expression)
 Iterative procedure:
Step 1: Pick initial 
Step 2: Find corresponding power output of each unit
from Li  ICi   i  1,2,, m
Step 3: If total power < load, increase  and go back
to step 2. Else, stop.

EE 332: Power Systems

 Case 4: With Line Losses, Generator Limit

• The solution outline to this case is basically the same as Case

#3.
• However, lower and upper limit of each generating units need
to be check.

EE 332: Power Systems

 Example

• The IFC for two plants are:

dC1
 0.075PG1  18 Rs. / MWh
dPG1
dC2
 0.08PG 2  16 Rs. / MWh
dPG 2

PL  0.0015PG21  0.0008PG1PG 2  0.0032PG22 for   25 Rs. / MWh

Find the real power generations, total loss and total demand

EE 332: Power Systems