Economic Load Dispatch

Generator Cost Curves

• Generator costs are typically represented by up to four different
curves
• input/output (I/O) curve
• fuel-cost curve
• heat-rate curve
• incremental cost curve
• For reference
• 1 Btu (British thermal unit) = 1054 J
• 1 MBtu = 1x106 Btu
• 1 MBtu = 0.293 MWh
• 3.41 Mbtu = 1 MWh

2
I/O Curves
• Shows the amount of heat input energy (Mbtu) required per hour as a
function of the generator’s output (MW).

3
Fuel Cost Curves
• Specifies the cost of fuel ($) used per hour by the generating unit as a
function of the unit’s MW output.

4
Heat-rate Curve
• Plots the heat energy required per MWH of generated electrical
output for the generator as a function of the generator’s MW output.
• Heat-rate curve is the I/O curve scaled by MW
 

5
Incremental (Marginal) Cost Curve

• Plots the incremental $/MWh as a function of MW.

• Found by differentiating the cost curve
 

6
Mathematical Formulation of Costs

• Generator cost curves are usually not smooth. However the curves
can usually be adequately approximated using piece-wise smooth,
functions.
• Two representations predominate
• quadratic or cubic functions
• piecewise linear functions
• Here, we'll assume a quadratic presentation
  C ( P )     P   P 2 $/hr (fuel-cost)
i Gi i i Gi i Gi
dCi ( PGi )
ICi ( PGi )   i  2 i PGi $/MWh
dPGi
7
Coal Usage Example 1

• A 500 MW generator is 35% efficient. It is being supplied with

Western grade coal, which costs 1.70 $/MBtu and has 9000 Btu/lb.
What is the coal usage in lbs/hr? What is the cost?
At 35% efficiency, required fuel input per hour is
500 MWh 1428 MWh 1 MBtu 4924 MBtu
  
hr  0.35 hr 0.29 MWh hr
4924 MBtu 1 lb 547,111 lbs
Now,  
hr 0.009MBtu hr
4924 MBtu $1.70
Cost =   8370.8 $/hr or $16.74/MWh
hr MBtu

8
Coal Usage Example 2

• Assume a 100W lamp is left on by mistake for 8 hours, and that the
electricity is supplied by the previous coal plant and that
transmission/distribution losses are 20%. How much coal has been
used?
With 20% T/D losses, a 100W active load for 8 hrs requires
1 kWh of energy. [(100W  8 hrs) + 20% loss =1000 Wh]
With 35% gen. efficiency this requires
1 kWh 1 MWh 1 MBtu 1 lb
    1.09 lb
0.35 1000 kWh 0.29 MWh 0.009MBtu

9
Incremental Cost Example

For a two generator system assume

C1 ( PG1 )  1000 20 PG1  0.01PG21 $ / hr
C2 ( PG 2 )  400 15 PG 2  0.03PG22 $ / hr
Then
dC1 ( PG1 )
IC1 ( PG1 )   20  0.02 PG1 $/MWh
dPG1
dC2 ( PG 2 )
IC2 ( PG 2 )   15  0.06 PG 2 $/MWh
dPG 2

10
Incremental Cost Example, cont’d

If PG1  250 MW and PG2  150 MW Then

C1 (250)  1000 20  250  0.01  2502  $ 6625/hr
C2 (150)  400 15  150  0.03  1502  $6025/hr
Then
IC1 (250)  20  0.02  250  $ 25/MWh
IC2 (150)  15  0.06  150  $ 24/MWh

11
Economic Dispatch: Formulation

• The goal of economic dispatch is to determine the generation

dispatch that minimizes the instantaneous operating cost, subject to
the constraint that total generation = total load + losses
m
Minimize CT   Ci ( PGi ) Initially we'll
i 1
ignore generator
Such that limits and the
m
losses
 PGi  PD  PLosses
i=1

12
Unconstrained Minimization

• This is a minimization problem without any constraint (no restrictions

on the values of the variables)
• For an unconstrained minimization a necessary (but not sufficient)
condition for a minimum is the gradient of the function must be zero,
f ( x )  0
• The gradient generalizes the first derivative for multi-variable
problems: T
 f (x) f (x) f (x) 
f ( x )   , , , 
 1 x  x 2 x n 

13
Minimization with Equality Constraint

• When the minimization is constrained with an equality constraint we

can solve the problem using the method of Lagrange Multipliers
• Key idea is to modify a constrained minimization problem to be an
unconstrained problem
That is, for the original problem
min f (x)
s.t. g(x)  0
We define the Lagrangian L(x,λ )  f (x)  λ T g(x)
Then a necessary condition for a minimum is
L x (x,λ )  0 and L λ (x,λ )  0
14
Economic Dispatch Lagrangian

For the economic dispatch we have a minimization problem

constrained with a single equality constraint
m m
L(PG ,  )   Ci ( PGi )   ( PD   PGi ) (no losses)
i 1 i 1
The necessary conditions for a minimum are
L(PG ,  ) L(PG ,  )
 0 and 0
PGi 
m
f (x) +.g(x)  0 and PD   PGi  0
i 1
dCi ( PGi )
f (x)  (for i  1 to m) g(x)  1 m x1
dPGi

15
Economic Dispatch Example

What is economic dispatch for a two generator

system with PD  PG1  PG 2  500 MW and
C1 ( PG1 )  1000 20 PG1  0.01PG21 $ / hr
C2 ( PG 2 )  400 15 PG 2  0.03PG22 $ / hr
Using the Largrange multiplier method we know
dC1 ( PG1 )
  20  0.02 PG1   0
dPG1
dC2 ( PG 2 )
  15  0.06 PG 2   0
dPG 2
500  PG1  PG 2  0
16
Economic Dispatch Example, cont’d
We therefore need to solve three linear equations
20  0.02 PG1   0
15  0.06 PG 2   0
500  PG1  PG 2  0
0.02 0 1  PG1   20 
 0 0.06 1  PG 2    15 
    
 1 1      500 
 PG1   312.5 MW 
 P    187.5 MW 
 G2   
    26.2 $/MWh 
17
Lambda-Iteration Solution Method

• The direct solution only works well if the incremental

cost curves are linear and no generators are at their
limits
• A more general procedure is known as the lambda-
iteration method
• the method requires that there be a unique mapping
between a value of lambda and each generator’s MW
output
• the method then starts with values of lambda below and
above the optimal value, and then iteratively attempts to
attain the optimal value

18
Lambda-Iteration Algorithm
Pick  L and  H such that
m m
 Gi )  PD  0
P (  L
 Gi )  PD  0
P (  H

i=1 i=1

While  H   L   Do
 M  ( H   L ) / 2
m
If  Gi
P (  M
)  PD  0 Then  H
  M

i=1
m
Else If  PGi ( M L
)  PD  0 Then    M

i=1
End While
19
Lambda-Iteration Algorithm: Graphically

20
Lambda-Iteration Example
Consider a three generator system with
IC1 ( PG1 )  15  0.02 PG1   $/MWh
IC2 ( PG 2 )  20  0.01PG 2  $/MWh
IC3 ( PG 3 )  18  0.025 PG 3   $/MWh
and with constraint PG1  PG 2  PG 3  1000 MW
Rewriting as a function of  , PGi ( ), we have
  15   20
PG1 ( )  PG2 ( ) 
0.02 0.01
  18
PG3 ( ) 
0.025
21
Lambda-Iteration Example, cont’d

Pick  L and  H such that

m m
 Gi )  1000  0 and
P (  L
 Gi )  1000  0
P (  H

i=1 i=1
m
Try  L  20 then  PGi (20)  1000 
i 1
  15   20   18
   1000  670 MW
0.02 0.01 0.025
m
Try  H  30 then  PGi (30)  1000  1230 MW
i 1

22
Lambda-Iteration Example, cont’d
Pick convergence tolerance   0.00005 $/MWh
Then iterate.
Since  H   L   ,

 M  ( H   L ) / 2  25
m
Then since  Gi
P (25)  1000  280 we set  H
 25
i 1
Since 25  20  
 M  (25  20) / 2  22.5
m
 Gi
P (22.5)  1000  195 we set  L
 22.5
i 1 23
Lambda-Iteration Example, cont’d

Continue iterating until  H   L  

The solution value of    * , is 23.53 $/MWh

Once  * is known we can calculate the PGi
23.53  15
PG1 (23.5)   426 MW
0.02
23.53  20
PG2 (23.5)   353 MW
0.01
23.53  18
PG3 (23.5)   221 MW
0.025

24
Lambda-Iteration Algorithm: Progress

25
Lambda-Iteration Algorithm: Error Convergence

Error vs. Iteration

300

250

200

150

100
Error

50

-50

-100

-150

-200
0 5 10 15 20 25
Iteration

26
ELD with Generation Constraints
What is economic dispatch for a three generator system with
PD  PG1  PG 2  PG 3  975 MW and
C1 ( PG1 )  500 5.3PG1  0.004 PG21 $ / hr
C2 ( PG 2 )  400 5.5 PG 2  0.006 PG22 $ / hr
C3 ( PG 3 )  200 5.8 PG 3  0.009 PG23 $ / hr
and
We include
200  PG1  450 MW
generator
150  PG2  350 MW limits but ignore
100  PG3  225 MW the losses
27
 ELD with Generation Constraints
The Lagrangian
L  500  5.3PG1  0.004 PG21  400  5.5PG 2  0.006 PG22  200  5.8 PG 3  0.009 PG23
   975  PG1  PG 2  PG 3   1  PG1  450   2  200  PG1   3  PG 2  350 
  4  150  PG 2   5  PG 3  225   6  100  PG 3 

Condition 1 5.3  0.008 PG1    1  2  0

5.5  0.012 PG 2    3  4  0
5.8  0.018 PG 3    5  6  0

Condition 2 975  PG1  PG 2  PG 3

28
ELD with Generation Constraints
Condition 3 Condition 4
PG1  450  0 1  PG1  450   0 1  0
200  PG1  0  2  200  PG1   0 2  0
PG 2  350  0 3  PG 2  350   0 3  0
150  PG 2  0  4  150  PG 2   0 4  0
PG 3  225  0
5  PG 3  225   0 5  0
100  PG 3  0
6  100  PG 3   0 6  0

29
ELD with Generation Constraints
• Case 1
• If the optimum solution occurs at values for PG1, PG2, and PG3 that are not at
either an upper or a lower limit, then all μ values are equal to 0 and
5.3  0.008 PG1    0
5.5  0.012 PG 2    0
5.8  0.018 PG 3    0
975  PG1  PG 2  PG 3
  5.3  0.008 PG1  5.5  0.012 PG 2  5.8  0.018 PG 3
• This yields
PG1  482.8947; PG 2  305.2632; PG 3  186.8421;   9.1632
• Solving the above 4 equations we get
P P
G1 G1,max

• Not a valid solution as 30

ELD with Generation Constraints
• Case 2
• PG1 should be bound at its upper limit. So, PG1 = 450 MW
• PG2 and PG3 are away from their upper/ lower limit. Also PG1 is away from its
lower limit, then we have
1  0 and 2  3   4  5  6  0

• The Lagrangian

L  500  5.3PG1  0.004 PG21  400  5.5 PG 2  0.006 PG22  200  5.8 PG 3  0.009 PG23
   975  PG1  PG 2  PG 3   1  PG1  450   2  200  PG1   3  PG 2  350 
 4  150  PG 2   5  PG 3  225   6  100  PG 3 

31
ELD with Generation Constraints
Condition 1 Condition 2
5.3  0.008 PG1    1  0 975  PG1  PG 2  PG 3
5.5  0.012 PG 2    0
5.8  0.018 PG 3    0
Condition 3 Condition 4
1  0
PG1  450  0
2  200  PG1   0 2  0
200  PG1  0
PG 2  350  0 3  PG 2  350   0 3  0
150  PG 2  0 4  150  PG 2   0 4  0
PG 3  225  0 5  PG 3  225   0 5  0
100  PG 3  0 6  100  PG 3   0 6  0
32
ELD with Generation Constraints
• Using the aforementioned conditions we have
5.3  0.008* 450    1  0
5.5  0.012 PG 2    0
5.8  0.018 PG 3    0
975  450  PG 2  PG 3

• Upon solving we get

PG 2  325MW ; PG 3  200 MW ;   9.4 $ / MWh; 1  0.5

• As none of the constraints are violated, this is the optimal solution.

33
ELD with Transmission Losses

All thermal Power Plant with Transmission Losses

34
ELD with Transmission Losses
m
Minimize CT   Ci ( PGi )
i 1
Such that
m
 PGi  PD  PLosses
i=1

35
ELD with Transmission Losses
m  m 
The Lagrangian L =  Ci ( PGi )    PD  PLoss   PGi 
i 1  i=1 
L dCi  PLoss 
The gradients yield: =   1   0
PGi dPGi  PGi 

dCi PLoss
    
dPGi PGi

and  Coordination Equation
m 
PD  PLoss   PGi  0 
i=1  36
ELD with Transmission Losses
• Two Approaches to the solution of the problem
• Loss formula method
• Optimal Power Flow method

37
The Loss formula method Example

For a three generator system assume

C1 ( PG1 )  561  7.92 PG1  0.001562 PG21 $ / hr
C2 ( PG 2 )  310 7.85 PG 2  0.00194 PG22 $ / hr
C3 ( PG 3 )  78 7.97 PG 2  0.00482 PG22 $ / hr
PD  850 MW
Asimplified lossexpression Ploss  0.00003PG21  0.00009 PG22  0.00012 PG23

38
The Loss formula method Example
Applying the Coordination Equations
dCi  PLoss 
  1   becomes
dPGi  PGi 
7.92+0.003124PG1    1  2  0.00003 PG1  

7.85+0.00388PG2    1  2  0.00009  PG 2  

7.97+0.00964PG3    1  2  0.00012  PG 3   nonlinear set of equations
and 

PG1  PG 2  PG 3  850  PLoss  0 

39
 The Loss formula method: Steps
Step 1: Pick a set of starting values for PG1 , PG 2 and PG 3 that sum to the load.
PLoss
Step 2: Calculate the incremental losses as well as the total losses PLoss .
PGi
(The incremental losses and total losses will be considered constant until we return
to step 2.)
Step 3: Calculate the value of  that causes PG1  PG 2 + PG 3  PD  PLoss
Step 4: Compare the PG1 , PG 2 and PG 3 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.
40
The Loss formula method: Example
Step 1: Pick PG1  400 MW , PG 2 = 300MW and PG 3  150 MW
PLoss
Step 2: Calculate the incremental losses and PLoss
PGi
PLoss
 2(0.00003)400  0.0240
PG1
PLoss
 2(0.00009)300  0.0540
PG2
PLoss
 2(0.00012)150  0.0360
PG3
PLoss  15.6 MW
41
The Loss formula method: Example
Step 3: Calculate the value of  that causes PG1  PG 2 + PG 3  PD  PLoss
7.92+0.003124PG1    1  0.024    0.9760 
7.85+0.00388PG2    1  0.0540    0.9460 
7.97+0.00964PG3    1  0.0360    0.9640 
and
PG1  PG 2  PG 3  850  15.6  PG1  PG 2  PG 3  865.6  0

42
The Loss formula method: Example
Step 3: Contd ...
 0.003124 0 0 0.9760   PG1   7.92 
 0 0.00388 0 0.9460   PG2   7.85 
     
 0 0 0.00964 0.9640   PG3   7.97 
 1      865.6 
 1 1 0    
1
 PG1   0.003124 0 0 0.9760   7.92   440.68 
P   0 0.00388 0 0.9460   7.85   299.12 
 G2       
 PG3   0 0 0.00964 0.9640   7.97  125.77 
   0   865.6  9.5252 
   1 1 1    
43
The Loss formula method: Example
Step 4: Since these values for PG1 , PG2 , and PG3 are quite different from the previous
values, we will return to step 2.
PLoss
Step 2: Recalculate the incremental losses and PLoss
PGi
PLoss
 2(0.00003)440.68  0.0264
PG1
PLoss
 2(0.00009)299.12  0.0538
PG2
PLoss
 2(0.00012)125.77  0.0301
PG3
PLoss  15.78MW 44
The Loss formula method: Example
Step 3: Calculate the new value of  that causes PG1  PG 2 + PG 3  PD  PLoss
7.92+0.003124PG1    1  0.0264    0.9736 
7.85+0.00388PG2    1  0.0538    0.9462 
7.97+0.00964PG3    1  0.0301    0.9699 
and
PG1  PG 2  PG 3  850  15.78  PG1  PG 2  PG 3  865.78  0

45
The Loss formula method: Example
Step 3: Contd ...
 0.003124 0 0 0.9736   PG1   7.92 
 0 0.00388 0 0.9462   PG2   7.85 
     
 0 0 0.00964 0.9699   PG3   7.97 
 1     865.78 
 1 1 0    
1
 PG1   0.003124 0 0 0.9736   7.92   433.94 
P   0 0.00388 0 0.9462   7.85   300.11
 G2       
 PG3   0 0 0.00964 0.9699   7.97  131.74 
   0  865.78  9.5275 
   1 1 1    
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The Loss formula method: Example
Step 4: Since these values for PG1 , PG2 , and PG3 are quite different from the previous
values, we will again return to step 2...
This will continue until the stopping criteria is satisfied

Iteration PG1 (MW) PG2 (MW) PG3 (MW) Ploss (MW) λ ($/MWh)
1 400 300 150 15.6 9.5252
2 440.68 299.12 125.77 15.78 9.5275
3 433.94 300.11 131.74 15.84 9.5285
4 435.87 299.94 130.42 15.83 9.5283
5 435.13 299.99 130.71 15.83 9.5284

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