Haramaya University

Haramaya Institute of Technology (HiT)

School of Electrical and Computer

Engineering

By: Fsaha Mebrahtu(MSc. in power

System and Energy Engineering)

1
 Power System Planning
And Operation
Generation System Cost Analysis
ECEg - 4251
Chapter Three
Address
[email protected]
Tell: +251968304222

2
 Introduction
• A power station is required to deliver power to a large number of
consumers to meet their requirements. While designing and building
a power station, efforts should be made to achieve overall economy,
so that the per unit cost of production is as low as possible. This will
enable the electric supply company to sell electrical energy at a
profit and ensure reliable service.
The problem of determining the cost of production of electrical
energy is highly complex and poses a challenge to power engineers.
There are several factors which influence the production cost such
as cost of land and equipment, depreciation of equipment, interest
on capital investment etc.
Therefore, a careful study has to be made to calculate the cost of
production. We shall here focus our attention on the various aspects
of economics of power generation. 3
 Economics of Power Generation(EPG)
• The art of determining the per unit (i.e., one kWh) cost of production of electrical energy is
known as economics of power generation.
• The economics of power generation has assumed a great importance in this fast developing
power plant engineering.
• A consumer will use electric power only if it is supplied at reasonable rate. Therefore, power
engineers have to find convenient methods to produce electric power as cheap as possible so
that consumers are tempted to use electrical methods.
Some important terms in EPG:
i. Interest:- The cost of use of money is known as interest.
A power station is constructed by investing a huge capital. This money is generally borrowed
from banks or other financial institutions and the supply company has to pay the annual interest
on this amount. Even if company has spent out of its reserve funds, the interest must be still
allowed for, since this amount could have earned interest if deposited in a bank. Therefore,
while calculating the cost of production of electrical energy, the interest payable on the capital
investment must be included. The rate of interest depends upon market position and other
factors, and may vary from 4%to 8% per annum

4
 Economics of Power Generation
ii. Depreciation:- The decrease in the value of the power plant equipment and building due to
constant use is known as depreciation.
If the power station equipment were to last for ever, then interest on the capital investment
would have been the only charge to be made.
However, in actual practice, every power station has a useful life ranging from fifty to sixty
years. From the time the power station is installed, its equipment steadily deteriorates due to
wear and tear so that there is a gradual reduction in the value of the plant.
This reduction in the value of plant every year is known as annual depreciation.
Due to depreciation, the plant has to be replaced by the new one after its useful life.
Therefore, suitable amount must be set aside every year so that by the time the plant retires,
the collected amount by way of depreciation equals the cost of replacement. It becomes
obvious that while determining the cost of production, annual depreciation charges must be
included. There are several methods of finding the annual depreciation charges.

5
 Cost of Electrical Energy
• The total cost of electrical energy generated can be divided into three parts,
namely ;
i). Fixed cost ;
ii). Semi-fixed cost ;
iii). Running or operating cost.
i) Fixed cost:- It is the cost which is independent of maximum demand and units
generated.
• The fixed cost is due to the annual cost of central organization, interest on
capital cost of land and salaries of high officials. The annual expenditure on the
central organization and salaries of high officials is fixed since it has to be met
whether the plant has high or low maximum demand or it generates less or more
units. Further, the capital investment on the land is fixed and hence the amount
of interest is also fixed.
• ii. Semi-fixed cost. It is the cost which depends upon maximum demand but is
independent of units generated.
6
 Cost of Electrical Energy
The semi-fixed cost is directly proportional to the maximum demand on power
station and is on account of annual interest and depreciation on capital investment of
building and equipment, taxes, salaries of management and clerical staff. The
maximum demand on the power station determines its size and cost of installation. The
greater the maximum demand on a power station, the greater is its size and cost of
installation. Further, the taxes and clerical staff depend upon the size of the plant and
hence upon maximum demand.
iii). Running cost. It is the cost which depends only upon the number of units
generated.
The running cost is on account of annual cost of fuel, lubricating oil, maintenance,
repairs and salaries of operating staff. Since these charges depend upon the energy
output, the running cost is directly proportional to the number of units generated by the
7
station.
 Expressions for Cost of Electrical Energy
• The overall annual cost of electrical energy generated by a power station can be expressed in
two forms viz three part form and two part form.

(i). Three part form:- In this method, the overall annual cost of electrical energy generated is
divided into three parts viz fixed cost, semi-fixed cost and running cost i.e.

• Total annual cost of energy = Fixed cost + Semi-fixed cost + Running cost
• = Constant + Proportional to max. demand + Proportional to
kWh generated.
• = (a + b kW + c kWh); in $.
• Where:
a = annual fixed cost independent of maximum demand and energy output. It is on account of
the costs mentioned in Art.2.(Slide.3)
b = constant which when multiplied by maximum kW demand on the station gives the annual
semi-fixed cost.
c = a constant which when multiplied by kWh output per annum gives the annual running cost.

8
 Cont..
(ii). Two part form:- It is sometimes convenient to give the annual cost of
energy in two part form.
In this case, the annual cost of energy is divided into two viz., parts fixed sum
per kW of maximum demand plus a running charge per unit of energy. The
expression for the annual cost of energy then becomes :
Total annual cost of energy = A (kW + B kWh); $.
Where:
A = a constant which when multiplied by maximum kW demand on the
station gives the annual cost of the first part.
B = a constant which when
multiplied by the annual kWh generated gives the annual running cost.
It is interesting to see here that two-part form is a simplification of three-part
form.
A little reflection shows that constant “a” of the three part form has been
merged in fixed sum per kW maximum demand (i.e. constant A) in the two-
part form.

9
 Methods of Determining Depreciation
• There is reduction in the value of the equipment and other property of the plant
every year due to depreciation. Therefore, a suitable amount (known as
depreciation charge) must be set aside annually so that by the time the life span
of the plant is over, the collected amount equals the cost of replacement of the
plant.
• The following are the commonly used methods for determining the annual
depreciation charge:
i. Straight line method;
ii. Diminishing value method;
iii. Sinking fund method;
• (i). Straight line method.
• In this method, a constant depreciation charge is made every year on the basis
of total depreciation and the useful life of the property. Obviously, annual
depreciation charge will be equal to the total depreciation divided by the useful
life of the property. Thus, if the initial cost of equipment is $100,000 and its
scrap value is $10,000 after a useful life of 20 years, then,
𝑇𝑜𝑡𝑎𝑙 𝑑𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛 10000−1000
• Annual depreciation charge = =
𝑢𝑠𝑒𝑓𝑢𝑙 𝑙𝑖𝑓𝑒 20
= 𝑅𝑠 4,500

10
 Cont.
• In general, the annual depreciation charge on the straight line method
may be expressed as
P-S
Annual depreciation charge = ;
n
• Where: P = Initial cost of equipment
n = Useful life of equipment in years
S = Scrap or salvage value after the useful life of the plant.

The straight line method is extremely simple and is easy to apply as the annual depreciation
charge can be readily calculated from the total depreciation and useful life of the equipment.
Fig.1. shows the graphical representation of the method. It is clear that initial value P of the
equipment reduces uniformly, through depreciation, to the scrap value S in the useful life of
the equipment.
The depreciation curve (PA) follows a straight line path, indicating constant annual
depreciation charge. However, this method suffers from two defects. Firstly, the assumption of
constant depreciation charge every year is not correct. Secondly, it does not account for the
interest which may be drawn during accumulation.
11
 Cont.
Determining of Annual Depreciation charge by Straight line method

Fig.1. The straight line method to find annual depreciation charge.

12
 Cont.
• (ii) Diminishing value method.
• In this method, depreciation charge is made every year at a fixed rate on the
diminished value of the equipment. In other words, depreciation charge is first
applied to the initial cost of equipment and then to its diminished value. As an
example, suppose the initial cost of equipment is $10,000 and its scrap value after
the useful life is zero. If the annual rate of depreciations 10%, then depreciation
charge for the first year will be 0·1×10,000 = $1,000. The value of the equipment is
diminished by $1,000 and becomes $9,000. For the second year, the depreciation
charge will be made on the diminished value i.e. ($9,000) and becomes 0·1×9,000 =
$900. The value of the equipment now becomes 9000− 900 = $8100. For the third
year, the depreciation charge will be 0· 1× 8100 = $810 and so on.

Value of equipment after one year

Mathematical treatment = P − Px = P (1 − x)
Let Value of equipment after 2 years
P = Capital cost of equipment; = Diminished value − Annual depreciation
n = Useful life of equipment in years; = [P − Px] − [(P − Px)x]
S = Scrap value after useful life. = P − Px − Px + Px2
= P (x2 − 2x + 1)
Suppose the annual unit* depreciation is = P (1 − x)2
x. It is desired to find the value of x in ∴ Value of equipment after n years = P (1 − x)n
terms of P, n and S. 13
 Cont..
• But the value of equipment after n years (i.e., useful life) is equal to the scrap value S.
∴ S = P(1 – x)n
or (1-x)n = S/P
or 1-x = (S/P)1/n
• or x = 1 - (S/P)1/n ...(i)

From exp. (i), the annual depreciation can be easily found. Thus depreciation to be
made for the first year is given by :
Depreciation for the first year = xP = P[1 − (S/P)1/n]

Similarly, annual depreciation charge for the subsequent years can be calculated.
This method is more rational than the straight line method.
* If annual depreciation is 10%, then, we can say that annual unit depreciation is 0·1.
Fig.2. shows the graphical representation of diminishing value method. The initial value P of
the equipment reduces, through depreciation, to the scrap value S over the useful life of the
equipment. The depreciation curve follows the path PA. It is clear from the curve that
depreciation charges are heavy in the early years but decrease to a low value in the later years.
This method has two drawbacks.
i. low depreciation charges are made in the late years when the maintenance and repair
charges are quite heavy.
ii. the depreciation charge is independent of the rate of interest which it may draw during
14
accumulation. Such interest moneys, if earned, are to be treated as income.
 Cont…
Determining of Annual Depreciation charge by Diminishing value method.

Fig.2. The Diminishing value method to find annual depreciation charge.

15
 Cont..
(iii) Sinking fund method. In this method, a fixed depreciation charge is made every year and
interest compounded on it annually. The constant depreciation charge is such that total of annual
installments plus the interest accumulations equal to the cost of replacement of equipment after
its useful life.
Let P = Initial value of equipment
n = Useful life of equipment in years
S = Scrap value after useful life
r = Annual rate of interest expressed as a decimal
Cost of replacement = P − S
Let us suppose that an amount of q is set aside as depreciation charge every year and
interest compounded on it so that an amount of P − S is available after n years. An amount q at
annual interest rate of r will become * q(1 + r)n at the end of n years.
Now, the amount q deposited at the end of first year will earn compound interest for n − 1
years
and shall become q(1 + r) n − 1 i.e.,Amount q deposited at the end of first year becomes

= q (1 + r) n−1

* This can be easily proved.

At the end of first year, amount is = q + rq = q(1 + r)
At the end of second year, amount is = (q + (rq) + r(q + rq) = q + rq + rq + r2q
Similarly, at the end of n years, amount is = q(1 + r)n 16
 Cont..
Amount q deposited at the end of 2nd year becomes = q (1 + r) n−2
Amount q deposited at the end of 3rd year becomes = q (1 + r) n−3
Similarly amount q deposited at the end n of − 1 year becomes = q (1 + r) n−(n−1)
= q (1 + r)
∴ Total fund after n years = q (1 + r) n−1 + q (1 + r) n−2 + .... + q (1 + r)
= q [(1 + r) n−1 + (1 + r) n−2 + .... + (1 + r)]
q(1 + r)n - 1
• This is a G.P. series and its sum is given by : Total fund = ;
This total fund must be equal to the cost of replacement of equipmentr i .e., P−S.

q(1 + r)n - 1
P-S = ;
r
or Sinking fund, …..(i)
 r 
q  P - S  n ;
 (1 + r) - 1 
The value of q gives the uniform annual depreciation charge. The parenthetical term in eq.
(i) is frequently referred to as the “sinking fund factor”.
r
∴ Sinking fund factor = n
;
(1 + r) - 1
Though this method does not find very frequent application in practical depreciation
accounting, it is the fundamental method in making economy studies. 17
 Cont…
Example.1. A transformer costing $90,000 has a useful life of 20 years. Determine the annual
depreciation charge using straight line method . Assume the salvage value of the
equipment to be $10,000
Solution
Initial cost of transformer, P = $ 90,000
Useful life, n = 20 years
Salvage value, S = $10,000
Using straight line method,
Annual depreciation charge P - S 90, 000  10, 000
   $ 4000.00
n 20

Example.2. A distribution transformer costs $2,00,000 and has a useful life of 20 years. I f the
salvage value is $10,000 and rate of annual compound interest is 8%, calculate the
amount to be saved annually for replacement of the transformer after the end of 20 years
by sinking fund method.

Solution :

Initial cost of transformer, P = $2,00,000

Salvage value of transformer, S = $10,000
Useful life, n = 20 years
Annual interest rate, r = 8% = 0·08
 0.08 
Annual payment for sinking fund = q   200, 000 - 10, 000   =20 
 (1 + 0.08 ) - 1 

 0.0818   1, 90, 000  0.08   $ 4153

  200, 000 - 10, 000   20 
7/13/2020  4.66 - 1 
 (1 + 0.08 ) - 1 
 Cont..
Exercise1. The equipment in a power station costs $15,60,000 and has a salvage value
of $60,000 at the end of 25 years. Determine the depreciated value of the equipment
at the end of 20 years on the following methods:
i. Straight line method ;
ii. Diminishing value method ;
iii. Sinking fund method at 5% compound interest annually

Importance of High Load Factor

The load factor plays a vital role in determining the cost of energy. Some important
advantages of high load factor are listed below :
i. Reduces cost per unit generated: A high load factor reduces the overall cost per unit
generated. The higher the load factor, the lower is the generation cost. It is because
higher load factor means that for a given maximum demand, the number of units
generated is more. This reduces the cost of generation.
ii.Reduces variable load problems: A high load factor reduces the variable load
problems on the power station. A higher load factor means comparatively less
variations in the load demands at various times. This avoids the frequent use of
regulating devices installed to meet the variable load on the station.
Ex. A generating station has a maximum demand of 50,000 kW. Calculate the cost per
unit generated from the following data :
 Capital cost = $ 95x 106 ;
 Annual load factor = 40%
 Annual cost of fuel and oil = $ 9 x 106 ;
 Taxes, wages and salaries etc. = $ 7.5x106
 Interest and depreciation = 12%
19
 Cont.
Solution :
Units generated/annum = Max. demand x L.F. x Hours in a year = (50,000) x (0·4) x (8760) kWh = 17·52x 107 kWh

Annual fixed charges

Annual interest and depreciation = 12% of capital cost = $ 0·12 x 95 x 106 = $ 11·4 x 106
Annual Running Charges
Total annual running charges = Annual cost of fuel and oil + Taxes, wages etc.
= $ (9 x 106 + 7.5 x 106) = $ 16·5 x 106
Total annual charges = $ (11.4x 106 + 16·5 x 106) = $ 27.9 x 106
27.9 106
Cost per unit $  0.16 cents
17.52 107

Exercise2. A generating station has an installed capacity of 50,000 kW and

delivers 220 ×106 units per annum. If the annual fixed charges are $160 per kW
installed capacity and running charges are 4 cents per kWh, determine the cost
per unit generated.

Exercise3. A generating plant has a maximum capacity of 100 kW and costs

$160,000. The annual fixed charges are 12% consisting of 5% interest, 5%
depreciation and 2% taxes. Find the fixed charges per kWh if the load factor is (i)
100% and (ii) 50%.
20
 Cont.
Exercise4. Estimate the generating cost per kWh delivered from a generating
station from the following data :
Plant capacity = 50 MW ;
Annual load factor = 40%
Capital cost = 1·2 bill ;
annual cost of wages, taxation etc. = $4 mil ;
cost of fuel, lubrication, maintenance etc. = 1·0 Cents/kWh
generated.
Interest 5% per annum, depreciation 6% per annum of initial value.
Exercise5 . A generating station has the following data
 Installed capacity = 300 MW ;
 Capacity factor = 50% ;
 Annual load factor = 60%
 Annual cost of fuel, oil etc. = $ 9 × 107 ;
 capital cost = $ 109 ;
 annual interest and depreciation= 10%.
Calculate
(i) the minimum reserve capacity of the station and
(ii) (ii) the cost per kWh generated.

21
 Introduces techniques of power system optimization
• Consider N - numbers of thermal-generating units connected to a single
bus-bar serving a received electrical load.
• The input to each units is Fi, which represents the cost rate of the unit and
the output of each unit is pi, which is the electrical power generated by
particular unit.
• The total cost rate of this system is, the sum of the costs of each of
the individual units

Generating units consume fuel at a specific rate e.g., MBtu/h, kcal/hr)

1 Btu (British thermal unit) = 1054 J 22
 Cont.…
• The essential constraint on the operation of this system is that the sum
of the output powers must equal the load demand.
• Mathematically speaking, The problem is to minimize FT (total fuel
cost) subject to the sum of the powers generated must equal the received
load plus power loss.
• All units must operate in its operating limits
• The aim of real power economic dispatch is to make the generator’s fuel
consumption Or the operating cost of the whole system minimal by
determining.
• The power out put of each generating units under the constraints Condition
of the system load demand.
• This is also called classic economic dispatch.
• In which the line security are neglected. The fundamental of the economic
dispatch problem is the input out put characteristic of a power generating
units.

23
 Input output characteristic of generating units
• For thermal units, we call the input-output characteristic the generating unit
fuel consumption function, or operating cost function. The unit of the
generator fuel consumption function is Btu per hour heat input to the unit (or
MBtu(h).
• The fuel cost rate times Btu/h is the $ per hour ($/h) input to the unit for fuel.
The output of the generating unit will be designed by PG, the megawatt net
power output of the unit. In addition to the fuel consumption cost, the
operating cost of a unit includes
 labor cost,
 maintenance cost, and
 fuel transportation cost.
• It is difficult to express these costs directly as a function of the output of the
unit, so these costs are included as a fixed portion of the operating cost.
• The thermal unit system generally consists of the boiler, the steam turbine, and
generator. The input of the boiler is fuel, and the output is the volume of steam.
The relationship of the input and output can be expressed as a convex curve.
• The input of the turbine-generator unit is the volume of steam, and the output
is the electrical power. 24
 Cont.…
• A typical boiler-turbine-generator unit consists of a single boiler that generates steam
to drive a single turbine-generator set. The input-output characteristic of the whole
generating unit system can be obtained by combining directly the input-output
characteristic of the boiler and the input-output characteristic of the turbine-generator
unit.
• It is a convex curve, which is shown in Figure below.

Fig 3.1. Incremental fuel cost characteristic for thermal unit 25

 Calculation of Input output characteristic
• It can be observed from the input-output characteristic of the generating unit that the
power output is limited by the minimal and maximal capacity of the generating unit,
that’s is;

Generally, the input-output characteristic of the generating unit is non-linear. The

widely used input-output characteristic of the generating unit is a quadratic function i.e

Where a, b, and c are the coefficients of the input-output characteristic. The constant c is
equivalent to the fuel consumption of the generating unit opera-lion without power output,
which is shown in Figure 3.1.
Let (Fk, Pk) be obtained from the statistical data, where k =1, 2 ... n, and the fuel curve will be
a quadratic function. To determine the coefficients a, b, and c, compute the following error for
each data pair (Fk, Pk)

According to the principle of least squares, we form the following objective function
and make it minimal, i.e
26
 Cont.…

Function when we take the first derivative of the above function J with respect to each
of the independent variables a, b, and c and set the derivatives equal to zero.

From equation (3.5) -(3.7) we get

Coefficients a, b, and c can be obtained by solving equation (4.8)-(3.10) 27

 Principle of Equal Incremental Rate
• Given a system that consists of two generators connected to a single bus serving a
received electrical load. The input-output characteristics of two generating units are
FI(PGI) and F2(PG2), respectively. "The total fuel consumption of the system F is the
sum of the fuel consumptions of the two generating units. Assuming there is no
power output limitation for both generators, the essential constraint on the operation
of this system is that the sum of the output powers must equal the load demand. The
economic power dispatch problem of the system, which is to minimize F under the
above-mentioned constraint, can be expressed as;

According to the principle of equal incremental rate, the total fuel consumption F will
be minimal if the incremental fuel rates of two generators are equal, that is,

𝑑𝐹𝑖
Where is the incremental fuel rate of generating unit i, which corresponds to the
𝑑𝑃𝐺𝑖
slope of the input-output curve of the generating unit. If two generators operate
under the different incremental fuel rate, and the total output power maintain the
28
 Cont.…
• If generator 1 reduce output power ΔP, generator 2 will increase output power ΔP.
𝑑𝐹
Then generator 1 will reduce fuel consumption 𝑖 ΔP, and generator 2 will increase
𝑑𝑃𝐺𝑖
𝑑𝐹𝑖
fuel consumption ΔP. The total saving of fuel consumption will be
𝑑𝑃𝐺𝑖

𝑑𝐹1 𝑑𝐹
It can be observed from equation (3.14) that ΔP will be zero when = 2 that
𝑑𝑃𝐺1 𝑑𝑃𝐺2
is the incremental fuel rates of two generators are equal.
Example; The input output characteristics of two generating units are as follows;
F1=0.0008P12+0.2P1+10 $ /h

F2=0.0005P22+0.3P2+8 $ /h
Total power demand delivering is (PD) =500MW
The incremental fuel rate of two generating units as follow.

29
 Cont.…
According to the principle of equal incremental rate equation (3.13), we have

30
 Cont..
Example1: consider three units operate together
Unit 1: Coal-fired steam unit: Max output = 600 MW
Min output = 150 MW
Input-output curve: = 510.0 + 7.2p1 + 0.00142P12 [Mbtu/h]
Unit 2 Oil-fired steam unit: Max output = 400 MW
Min output = 100 MW
Input-output curve: 310.0 + 7.85P2 + 0.00194P22[Mbtu/h]
Unit 3: Oil-fired steam unit: Max output = 200 MW
Min output = 50 MW
Input-output curve: = 78.0 + 7.97P3 + 0.00482P32[Mbtu/h]
• Dispatch economically the three units to the power demand of 850 MW
neglecting transmission line loss. Consider a fuel cost of Unit 1 = 1.1 $/MBtu
, fuel cost of Unit 2 = 1.0 $/MBtu and fuel cost of Unit 3 = 1.0 $/MBtu .

31
Solution: first determine fuel cost per hour of each units

F1(P1) = H1(P1) x 1.1 = 561 + 7.92P1 + 0.001562P12: $/h

F2(P2) = H2(P2) x 1.0 = 310 + 7.85P2 + 0.00194P22: $/h

F3(P3) = H3(P3) x 1.0 = 78 + 7.97P3 + 0.00482P32: $/h

Secondly Determine rate of change of fuel cost w.r.t generated power:

 dF1 dF2 dF3
To be economical = = =λ
d PI d P2 d P3

7.92 + 0.003124P1 = λ

7.85 + 0.00388P2 = λ

7.97 + 0.00964P3 = λ

From the constraint P1 + P2 + P3 = 850 MW

From the above simultaneous equations we can determine λ = 9.148

solving for P1, P2, and P3

P1 = 393.2 MW P2 = 334.6 MW P3 = 122.2 MW

Note that all constraints are met; that is, each unit is within its high and low
limit and the total output when summed over all three units meets the desired

850 MW total.
To solve for the most economic dispatch

2. Suppose unit 1 is set to its maximum output and unit 3 to its

minimum output. The dispatch becomes

P1 = 600 MW P2 = 200 MW P3 = 50MW

Next, calculate the incremental cost for units 1 and 3 to see if they
dF1 dF3
meet the conditions of =λ , =λ
dP1 d P3

dF1 dF3
= 8.016 = 8.452
dP1 d P3
Note that the incremental cost for unit 1 is less than the λ (can’t go
beyond its max. limit), so unit 1 should be at its maximum and unit 2
and 3 must be re-dispatch.
 7.85 + 0.00388P2 = λ

7.97 + 0.00964P3 = λ

P2 + P3 = 850 – 600MW

Hence, 8.576 and

P2 = 187.1 MW

P3 = 62.9 MW

dF1
And now check weather ≤ λ,
dP1
dF1
The new is obtained to be 8.016 which is less than 8.576.
dP1
There fore the most economic to dispatch the load is

P1 = 600MW, P2 = 187.1 MW, P3 = 62.9 MW

 Economic load dispatch considering Transmission line losses
 The economic- dispatching problem associated with this particular
configuration is slightly more complicated to set up than the previous case.
 The objective function FT, is the same as that defined in earlier section.
However, the constraint Equation becomes:

The Lagrange function becomes

Fig 3.2. N thermal units serving load through transmission network. 36

 Consider the following network.

Power Loss on the transmission line is as a function of P1 and P2

Where, B11, B12, B22 are called loss coefficient or b coefficient

For a system of N plants, the above equation can be:

37
 From Lagrange multiplier (Expression)
F = Fn + λ(PD + PL - 𝑃𝑛)
The partial differential of this expression when equated to zero
gives the condition for optimal load dispatch.

𝑑𝐹 𝑑FT 𝑑𝑃𝐿
= + λ −1 =0
𝑑𝑃𝑛 𝑑𝑃𝑛 𝑑𝑃𝑛

𝑑Fn 𝑑𝑃𝐿
+ λ = λ
𝑑𝑃𝑛 𝑑𝑃𝑛

Power Loss
But 𝑑𝑃𝐿 = 2 𝐵𝑚𝑛 𝑃𝑚
Incremental cost
𝑑𝑃𝑛
𝑑Fn
= 𝐹𝑛𝑛𝑃𝑛 + 𝑓𝑛 Hence the above equation become:
𝑑𝑃𝑛
 𝐹𝑛𝑛𝑃𝑛 + 𝑓𝑛 + 2λ 𝐵𝑚𝑛 𝑃𝑚 = λ

𝐹𝑛𝑛𝑃𝑛– fn + 2λ𝐵𝑛𝑛𝑃𝑛 + 2λ 𝑚≠𝑛 𝐵𝑚𝑛𝑃𝑛 =λ

𝑃𝑛(𝐹𝑛𝑛 + 2λBnn) = λ – fn−2λ 𝑚≠𝑛 𝐵𝑚𝑛𝑃𝑚

λ – fn − 2λ 𝑚≠𝑛 𝐵𝑚𝑛𝑃𝑚
𝑃𝑛 =
𝐹𝑛𝑛 + 2λ𝐵𝑛𝑛
Divided all quantities to λ

fn
1– − 2 𝑚≠𝑛 𝐵𝑚𝑛𝑃𝑚
𝑃𝑛 = λ
𝐹𝑛𝑛
+ 2𝐵𝑛𝑛
λ
Example3: from example1 considering a transmission loss of

Ploss = 0.00003P12 + 0.00009P22 + 0.00012P32

Determine the economic load dispatch of the three units.

Solution: from the Lagrange function:

7.92 + 0.003124P1 = λ[ 1 - 2(O.OOOO3)P1]

7.85 + 0.003880P2 = λ[ 1 - 2(O.OOOO9)P2]
7.97 + 0.009640P3 = λ[ 1 - 2(O.OOO12)P3] and

P1 + P2 + P3 - 850 - Ploss = 0
We no longer have a set of linear equations as above Examples

It requires a more complex solution procedure as follows.

Step 1 Pick a set of starting values for P1, P2, and P3 that sum to the load.

Step 2 Calculate the incremental losses dPloss/dPn as well as the total losses
Ploss & The incremental losses and total losses will be considered constant until
we return to step 2.

Step 3 Calculate the value of λ that causes P1, P2, and P3 to sum to the total
load plus losses.

Step 4 Compare the P1, P2, and P3 from step 3 to the values used at the start of
step 2. If there is no significant change in any one of the values, go to step 5,
otherwise go back to step 2.

Step 5 Done. Using this procedure, we obtain

Step 1 Pick the Pl, P2, and P3 starting values as

Pl = 400.0 MW

P2 = 300.0 MW

P3 = 150.0 M W

Step 2 Incremental losses are

Total losses are 15.6 MW.

Step 3 We can now solve for I using the following

These equations are now linear, so we can solve for λ directly.

The results are
λ = 9.5252
Pl = 440.68
P2 = 299.12
P3 = 125.77
Step 4 Since these values for Pl, P2, and P3 are quite different from
the starting values, we will return to step 2.
Table below summarizes the iterative process used to solve this
problem.
 Consider The Constraints Of Power Output
We have discussed the equal incremental principle of economic operation.
Thus we know that the necessary condition for thermal power system
economic Operation is that the incremental fuel rates (incremental cost
rate)
Of all the units are equal. However we have not considered the two
Inequalities i.e the power output of each unit must be greater than
Or equal to the minimum power permitted and must also be less than
or equal to the maximum power permitted on that particular unit.

45
 Cont.…..
• Considering the inequality constraints the problem of economic dispatch can
be written as follows.
𝑚𝑖𝑛𝑖 𝐹 = 𝐹1 (𝑃𝐺1 ) + 𝐹2 𝑃𝐺2 . … + 𝐹𝑛 𝑃𝐺𝑛 = 𝑁 𝑖=1 𝐹𝑖 𝑃𝐺𝑖 (3.22)
𝑁

𝑃𝐺𝑖 = 𝑃𝐷 (3.23)
𝑖=1
𝑃𝐺𝑖𝑚𝑖𝑛𝑖 ≤ 𝑃𝐺𝑖 ≤ 𝑃𝐺𝑖𝑚𝑎𝑥 (3.4)
The equal incremental principle can be still applied to equation (3.22)-(3.24)
the calculation process is as follows.
1. Neglect the inequality equation (3.24) distribute the power among the
units to the equal incremental principle
2. Check the power output limits for each unit according the equation (3.24).
if the power output is out of the limits set the power output equal to the
corresponding limit that’s is;

3. Handle the violate unit as a negative load, i.e

46
Cont.…

47
Cont.

48
Environmental and Social costs

49
50