Chapter 4

ECONOMIC DISPATCH AND UNIT COMMITMENT

1 INTRODUCTION

A power system has several power plants. Each power plant has several
generating units. At any point of time, the total load in the system is met by
the generating units in different power plants. Economic dispatch control
determines the power output of each power plant, and power output of
each generating unit within a power plant , which will minimize the overall
cost of fuel needed to serve the system load.

• We study first the most economical distribution of the output of a

power plant between the generating units in that plant. The method
we develop also applies to economic scheduling of plant outputs for
a given system load without considering the transmission loss.
• Next, we express the transmission loss as a function of output of the
various plants.
• Then, we determine how the output of each of the plants of a system
is scheduled to achieve the total cost of generation minimum,
simultaneously meeting the load on the system.
2 INPUT – OUTPUT CURVE OF GENERATING UNIT

Power plants consisting of several generating units are constructed

investing huge amount of money. Fuel cost, staff salary, interest and
depreciation charges and maintenance cost are some of the components
of operating cost. Fuel cost is the major portion of operating cost and it
can be controlled. Therefore, we shall consider the fuel cost alone for
further consideration.
To get different output power, we need to vary the fuel input. Fuel input can
be measured in Tonnes / hour or Millions of Btu / hour. Knowing the cost of
the fuel, in terms of Rs. / Tonne or Rs. / Millions of Btu, input to the
generating unit can be expressed as Rs / hour. Let Ci Rs / h be the input
cost to generate a power of Pi MW in unit i. Fig.1 shows a typical input –
output curve of a generating unit. For each generating unit there shall be a
minimum and a maximum power generated as Pi min and Pi max.

Ci
in Rs / h

Pi in MW
Pi min Pi max

Fig.1 Input-Output curve of a generating unit

If the input-output curve of unit i is quadratic, we can write
C i = α i Pi2 + β i Pi + γ i Rs / h (1)
A power plant may have several generator units. If the input-output
characteristic of different generator units are identical, then the generating
units can be equally loaded. But generating units will generally have
different input-output characteristic. This means that, for particular input
cost, the generator power Pi will be different for different generating units
in a plant.

3 INCREMENTAL COST CURVE

As we shall see, the criterion for distribution of the load between any two
units is based on whether increasing the generation of one unit, and
decreasing the generation of the other unit by the same amount results in
an increase or decrease in total cost. This can be obtained if we can
calculate the change in input cost ∆Ci for a small change in power ∆Pi.
dCi ∆Ci dCi
Since = we can write ∆Ci = ∆Pi
dPi ∆Pi dPi
 dCi
∆Ci = ∆Pi
dPi
dCi
Thus while deciding the optimal scheduling, we are concerned with ,
dPi
INCREMENTAL COST (IC) which is determined by the slopes of the input-
dCi
output curves. Thus the incremental cost curve is the plot of versus
dPi
dCi
Pi. The dimension of is Rs / MWh.
dPi
The unit that has the input – output relation as
Ci = α i Pi2 + β i Pi + γ i Rs / h (1)
has incremental cost (IC) as
dCi
IC i = = 2 α i Pi + β i (2)
dPi

Here α i , β i and γ i are constants.

A typical plot of IC versus power output is shown in Fig.2.

ICi in Rs / MWh

Linear
approximation

Actual incremental
cost

Pi in MW
Fig.2 Incremental cost curve
This figure shows that incremental cost is quite linear with
respect to power output over an appreciable range. In analytical
work, the curve is usually approximated by one or two straight
lines. The dashed line in the figure is a good representation of
the curve.

We now have the background to understand the principle of

economic dispatch which guides distribution of load among the
generating units within a plant.
4 ECONOMICAL DIVISION OF PLANT LOAD BETWEEN GENERATING
UNITS IN A PLANT

Various generating units in a plant generally have different input-output

characteristics. Suppose that the total load in a plant is supplied by two
units and that the division of load between these units is such that the
incremental cost of one unit is higher than that of the other unit.

Now suppose some of the load is transferred from the unit with higher
incremental cost to the unit with lower incremental cost. Reducing the load
on the unit with higher incremental cost will result in greater reduction of
cost than the increase in cost for adding the same amount of load to the
unit with lower incremental cost. The transfer of load from one to other can
be continued with a reduction of total cost until the incremental costs of
the two units are equal.

This is illustrated through the characteristics shown in Fig. 3

 IC
2

IC2 IC1

Pi
P2 P1

Fig. 3 Two units case

Initially, IC2 > IC1 . Decrease the output power in unit 2 by ∆P and
increase output power in unit 1 by ∆P. Now IC2 ∆P > IC1 ∆P . Thus there
will be more decrease in cost and less increase in cost bringing the total
cost less. This change can be continued until IC1 = IC2 at which the total
cost will be minimum.
The same reasoning can be extended to a plant with more than two
generating units also. In this case, if any two units have different
incremental costs, then decrease the output power in unit having higher IC
and increase the output power in unit having lower IC. When this process
is continued, a stage will reach wherein incremental costs of all the units
will be equal. Now the total cost of generation will be minimum.

Thus the economical division of load between units within a plant is that all
units must operate at the same incremental cost. Now we shall get the
same result mathematically.
Consider a plant having N number of generating units. Input-output curve
of the units are denoted as C1 (P1 ) , C 2 (P2 )............, CN (PN ). Our problem is,
for a given load demand PD, find the set of Pi s which minimizes the cost
function
CT = C1 (P1 ) + C 2 (P2 ) + .......... .. + CN (PN ). (3)

subject to the constraints

PD − ( P1 + P2 + .......... .. + P N ) = 0 (4)

and Pi min ≤ Pi ≤ Pi max i = 1,2,…….., N (5)

Omitting the inequality constraints for the time being, the problem to be
solved becomes
N
Minimize C T = ∑ C (P )
i =1
i i (6)
N
subject to PD − ∑P
i =1
i =0 (7)

This optimizing problem with equality constraint can be solved by the

method of Lagrangian multipliers. In this method, the Lagrangian function
is formed by augmenting the equality constraints to the objective function
using proper Lagrangian multipliers. For this case, Lagrangian function is
 N N
L ( P1 , P2 ,............, PN , λ ) = ∑C
i =1
i ( Pi ) + λ ( PD − ∑P )
i =1
i (8)

where λ is the Lagrangian multiplier. Now this Lagrangian function has to

be minimized with no constraints on it. The necessary conditions for a
minimum are
∂L ∂L
=0 i = 1,2,……..,N and = 0.
∂ Pi ∂λ
For a plant with 3 units
L ( P1 , P 2 , P 3 , λ ) = C 1 ( P1 ) + C 2 ( P 2 ) + C 3 ( P 3 ) + λ ( PD − P1 − P 2 − P 3 )

Necessary conditions for a minimum are

∂L ∂ C1
= + λ(-1) = 0
∂ P1 ∂ P1

∂L ∂ C2
= + λ(-1) = 0
∂ P2 ∂ P2

∂L ∂ C3
= + λ(-1) = 0
∂ P3 ∂ P3
∂L
= PD − P1 − P 2 − P 3 = 0
∂λ
Generalizing the above, the necessary conditions are
∂ Ci
−λ=0 i = 1,2,…….,N (9)
∂ Pi
N
and PD − ∑P
i =1
i =0 (10)

∂ Ci
Here is the change in production cost in unit i for a small change in
∂ Pi
generation in unit i. Since change in generation in unit i will affect the
production cost of this unit ALONE, we can write
∂ Ci d Ci
= (11)
∂ Pi d Pi
Using eqn.(11) in eqn. (9) we have
d Ci
= λ I =1,2,…….,N (12)
d Pi
Thus the solution for the problem
N N
Minimize C T = ∑C (P )
i=1
i i subject to PD − ∑P
i=1
i =0

is obtained when the following equations are satisfied.

d Ci
= λ i = 1,2,…….,N (13)
d Pi
N
and PD − ∑P
i =1
i =0 (14)

The above two conditions give N+1 number of equations which are to be
solved for the N+1 number of variables λ , P 1 , P2 ,..........., PN . Equation (13)

simply says that at the minimum cost operating point, the incremental cost
for all the generating units must be equal. This condition is commonly
known as EQUAL INCREMENTAL COST RULE. Equation (14) is known as
POWER BALANCE EQUATION.
It is to be remembered that we have not yet considered the inequality
constraints given in eqn. (5). Fortunately, if the solution obtained without
considering the inequality constraints satisfies the inequality constraints
also, then the obtained solution will be optimum. If for one or more
generator units, the inequality constraints are not satisfied, the optimum
strategy is obtained by keeping these generator units in their nearest limits
and making the other generator units to supply the remaining power as per
equal incremental cost rule.
EXAMPLE 1

The cost characteristic of two units in a plant are:

C1 = 0.4 P12 + 160 P1 + K1 Rs./h
C2 = 0.45 P22 + 120 P2 + K2 Rs. / h
where P1 and P2 are power output in MW. Find the optimum load allocation
between the two units, when the total load is 162.5 MW. What will be the
daily loss if the units are loaded equally?

SOLUTION
Incremental costs are:
IC1 = 0.8 P1 + 160 Rs. / MW h
IC2 = 0.9 P2 + 120 Rs. / MW h
Using the equal incremental cost rule

0.8 P1 + 160 = λ and 0.9 P2 + 120 = λ

λ − 160 λ − 120
Since P1 + P2 = 162.5 we get + = 162.5
0.8 0.9
1 1 160 120
i.e. λ [ + ]= + + 162.5 i.e. 2.3611 λ = 495.8333
0.8 0.9 0.8 0.9
2.3611 λ = 495.8333
This gives λ = 210 Rs / MWh
Knowing 0.8 P1 + 160 = λ and 0.9 P2 + 120 = λ
Optimum load allocation is
210 − 160 210 − 120
P1 = = 62.5 MW and P2 = = 100 MW
0.8 0.9
When the units are equally loaded, P1 = P2 = 81.25 MW and we have
deviated from the optimum value of P1 = 62.5 MW and P2 = 100 MW.
Knowing C1 = 0.4 P12 + 160 P1 + K1 Rs./h
C2 = 0.45 P22 + 120 P2 + K2 Rs. / h
Daily loss can also be computed by calculating the total cost CT, which is
C1 + C2, for the two schedules.
Thus, Daily loss = 24 x [ C T ( 81.25, 81.25 ) − C T ( 62.5, 100 ) ]
= 24 x [ 28361.328 + K1 + K2 – ( 28062.5 + K1 + K2)] = Rs. 7171.87
EXAMPLE 2

A power plant has three units with the following cost characteristics:

C1 = 0.5 P12 + 215 P1 + 5000 Rs / h

C 2 = 1.0 P22 + 270 P2 + 5000 Rs / h
C 3 = 0.7 P32 + 160 P3 + 9000 Rs/h

where P is are the generating powers in MW. The maximum and minimum

loads allowable on each unit are 150 and 39 MW. Find the economic
scheduling for a total load of i) 320 MW ii) 200 MW

SOLUTION

Knowing the cost characteristics, incremental cost characteristics are

obtained as
IC1 = 1.0 P1 + 215 Rs / MWh
IC 2 = 2.0 P2 + 270 Rs / MWh
IC 3 = 1.4 P3 + 160 Rs / MWh

Using the equal incremental cost rule

1.0 P1 + 215 = λ; 2.0 P2 + 270 = λ; 1.4 P3 + 160 = λ
1.0 P1 + 215 = λ; 2.0 P2 + 270 = λ; 1.4 P3 + 160 = λ

Case i) Total load = 320 MW Since P1 + P2 + P3 = 320 we have

λ − 215 λ − 270 λ − 160

+ + = 320
1.0 2.0 1.4
1 1 1 215 270 160
i.e. λ [ + + ]= + + + 320
1.0 2.0 1.4 1.0 2.0 1.4
i.e. 2.2143 λ = 784.2857 This gives λ = 354.193 RM / MWh

Thus P1 = ( 354.193 - 215 ) / 1.0 = 139.193 MW

P2 = ( 354.193 - 270 ) / 2.0 = 42.0965 MW
P3 = ( 354.193 -16.0 ) / 1.4 = 138.7093 MW
All P i' s lie within maximum and minimum limits. Therefore, economic

scheduling is
P1 = 139.193 MW; P2 = 42.0965 MW; P3 = 138.7093 MW
Case ii) Total load = 200 MW Since P1 + P2 + P3 = 200 we have
1 1 1 215 270 160
λ [ + + ]= + + + 200 i.e. 2.21429 λ = 664.2857
1.0 2.0 1.4 1.0 20 1.4
This gives λ = 300 Rs / MWh

Thus P1 = ( 300 - 215 ) / 1.0 = 85 MW

P2 = ( 300 - 270 ) / 2.0 = 15 MW
P3 = ( 300 -160 ) / 1.4 = 100 MW
It is noted that P2 < P2 min. Therefore P2 is set at the min. value of 39 MW.
Then P1 + P3 = 200 − 39 = 161 MW. This power has to be scheduled
between units 1 and 3. Therefore
1 1 215 160
λ [ + ] = + + 161 i.e. 1.71429 λ = 490.2857
1.0 1.4 1.0 1.4
This gives λ = 286 Rs / MWh
Thus P1 = ( 286 - 215 ) / 1.0 = 71 MW
P3 = ( 286 -160 ) / 1.4 = 90 MW
P1 and P3 are within the limits. Therefore economic scheduling is
P1 = 71 MW; P2 = 39 MW; P3 = 90 MW
EXAMPLE 3

Incremental cost of two units in a plant are:

IC1 = 0.8 P1 + 160 Rs / MWh IC 2 = 0.9 P2 + 120 Rs / MWh
where P1 and P2 are power output in MW. Assume that both the units are
operating at all times. Total load varies from 50 to 250 MW and the minimum and
maximum loads on each unit are 20 and 125 MW respectively. Find the
incremental cost and optimal allocation of loads between the units for various
total loads and furnish the results in a graphical form.

SOLUTION
For lower loads, IC of unit 1 is higher and hence it is loaded to minimum value
i.e. P1 = 20 MW. Total minimum load being 50 MW, when P1 = 20 MW, P2 must be
equal to 30 MW. Thus initially P1 = 20 MW , IC1 = 176 Rs / MWh, P2 = 30 MW and
IC2 = 147 Rs / MWh. As the load increased from 50 MW, load on unit 2 will be
increased until its IC i.e. IC2 reaches a value of 176 Rs / MWh. When IC2 = 176
Rs / MWh load on unit 2 is P2 = ( 176 – 120 ) / 0.9 = 62.2 MW. Until that point is
reached, P1 shall remain at 20 MW and the plant IC, i.e. λ is determined by unit 2.
When the plant IC, λ is increased beyond 176 Rs / MWh, unit loads are
calculated as
P1 = ( λ - 160 ) / 0.8 MW
P2 = ( λ - 120 ) / 0.9 MW
Then the load allocation will be as shown below.

Plant IC λ Load on unit 1 Load on unit 2 Total load

Rs/MWh P1 MW P2 MW P1 + P2 MW
147 20 30 50
176 20 62.2 82.2
180 25 66.6 91.6
190 37.5 77.7 115.2
200 50 88.8 138.8
210 62.5 100.0 162.5
220 75 111.1 186.1
230 87.5 122.2 209.7
Load on unit 2 reaches the maximum value of 125 MW, when λ = (0.9 x 125)
+ 120 = 232.5 Rs / Mwh. When the plant IC, λ increases further, P2 shall
remain at 125 MW and the load on unit 1 alone increases and its
value is computed as P1 = ( λ - 120 ) / 0.9 MW. Such load allocations are
shown below.

Plant IC λ Load on unit 1 Load on unit 2 Total load

Rs / MWh P1 MW P 2 MW P1 + P2 MW
232.5 90.62 125 215.62
240 100 125 225
250 112.5 125 237.5
260 125 125 250

The results are shown in graphical form in Fig. 4

 140
130
120
110
100
P2
90
80
P1
70
P1 / P2 MW
60
50
40
30
20
10

0 20 40 60 80 100 120 140 160 180 200 220 240 260

Total load PD
Fig. 4 Load allocation for various plant load
 Alternative way of explaination for this problem is shown in Fig. 5
280
125, 260
260
90.6, 236
240 1
220 125, 236
200 P 1 = 62.5 P 2 = 100
20, 176
180
2
160 62.2, 176
140 30, 147
IC Rs/MWh
120
100
80
60
40
20

0 10 20 30 40 50 60 70 80 90 100 110 120 130

P1 / P2 MW

Fig. 5 Load allocation between two units

5 TRANSMISSION LOSS

Generally, in a power system, several plants are situated at different

places. They are interconnected by long transmission lines. The entire
system load along with transmission loss shall be met by the power plants
in the system. Transmission loss depends on i) line parameters ii) bus
voltages and iii) power flow. Determination of transmission loss requires
complex computations. However, with reasonable approximations, for a
power system with N number of power plants, transmission loss can be
represented as

B 11 B 12  B1N   P1 
B B  B  P 
PL = [P1 P2 … PN ]  21 22 2N   2 (15)
      
  
B
 N1 B N2  B NN  PN 

where P1 , P2 ,......., PN are the powers supplied by the plants 1,2,…….,N

respectively.
The coefficient matrix [ B ] is called as LOSS COEFFICIENT MATRIX or
Bmn COEFFICIENT MATRIX or B – COEFFICIENT MATRIX. This matrix is
symmetric.
 N 
 ∑ B 1n Pn 
 N
n=1

 B P 
From eq.(15) PL = [P1 P2 … … PN ] n∑ =1
2n n

 
 N  
 ∑B P 
n = 1 N n n 
N N N
= P1 ∑B
n=1
1n Pn + P2 ∑B
n=1
2n Pn + ……. + PN ∑B
n=1
Nn Pn

N N N
= ∑P B
n=1
1 1n Pn + ∑P
n=1
2 B 2 n Pn + …… + ∑P
n=1
N BN n Pn

N N
= ∑ ∑
m =1 n =1
Pm B m n Pn

Thus PL can be written as

N N
PL = ∑ ∑
m =1 n=1
Pm B m n Pn (16)
 N N
PL = ∑ ∑
m =1 n=1
Pm B m n Pn (16)

When the powers are in MW, the Bmn coefficients are of dimension 1/ MW.
If powers are in per-unit, then Bmn coefficients are also in per-unit. Loss
coefficient matrix of a power system shall be determined before hand and
made available for economic dispatch.

For a two plant system, the expression for the transmission loss is

B 11 B 12  P1 
PL = [P1 P2 ]   
B 21 B 22  P2 

B P + B 12 P2 
= [P1 P2 ]  11 1  = P1
2
B 11 + P1 P2 B 12 + P1 P2 B 21 + P 2
2 B 22
B 21 P1 + B 22 P2 
Since Bmn coefficient matrix is symmetric, for two plant system
PL = P12 B11 + 2 P1 P2 B12 + P22 B 22 (17)
In later calculations we need the Incremental Transmission Loss ( ITL ),
∂ PL
.
∂ Pi
For two plant system

∂ PL
= 2 B11 P1 + 2 B12 P2 (18)
∂ P1

∂ PL
= 2 B 12 P1 + 2 B 22 P2 (19)
∂ P2

This can be generalized as

N
∂ PL
∂ Pm
= ∑
n=1
2 B mn Pn m = 1,2,………., N (20)
6 ECONOMIC DIVISION OF SYSTEM LOAD BETWEEN VARIOUS PLANTS
IN THE POWER SYSTEM

It is to be noted that different plants in a power system will have different

cost characteristics.

Consider a power system having N number of plants. Input-output

characteristics of the plants are denoted as C 1 ( P1 ), C 2 ( P2 ),............, CN ( PN ) .

Our problem is for a given system load demand PD, find the set of plant
generation P1 , P2 ,.........., PN which minimizes the cost function
CT = C 1 ( P1 ) + C 2 ( P2 ) + ............ + CN ( PN ) (21)
subject to the constraints
PD + PL − ( P1 + P2 + ............ + PN ) = 0 (22)
and Pi min ≤ Pi ≤ Pi max I = 1,2,……….,N (23)

Inequality constraints are omitted for the time being.

The problem to be solved becomes
N
Minimize C T = ∑
i =1
Ci ( Pi ) (24)

N
subject to PD + PL − ∑P
i =1
i =0 (25)

For this case the Lagrangian function is

N N
L( P1 , P2 ,......... ., PN , λ) = ∑
i =1
C i ( Pi ) + λ ( PD + PL − ∑P
i =1
i ) (26)

This Lagrangian function has to be minimized with no constraint on it. The

necessary conditions for a minimum are
∂L
=0 i = 1,2,……..,N
∂ Pi
∂L
and = 0.
∂λ
 N N
L( P1 , P2 ,......... ., PN , λ) = ∑
i =1
Ci ( Pi ) + λ ( PD + PL − ∑P
i=1
i ) (26)

For a system with 2 plants

L ( P 1 , P 2 , λ ) = C 1 ( P 1 ) + C 2 ( P 2 ) + λ ( P D + PL − P 1 − P 2 )

∂L ∂ C1 ∂ PL
= + λ( -1) = 0
∂ P1 ∂ P1 ∂ P1

∂L ∂ C2 ∂ PL
= + λ( -1) = 0
∂ P2 ∂ P2 ∂ P2
∂L
= P D + PL − P 1 − P 2 = 0
∂λ
Generalizing this, for system with N plants, the necessary conditions for a
minimum are

∂ Ci ∂ PL
+λ[ −1] = 0 i =1,2,……..,N (27)
∂ Pi ∂ Pi
N
and PD + PL − ∑P
i =1
i =0 (28)

As discussed in earlier case, we can write

∂ Ci d Ci
= (29)
∂ Pi d Pi
Using eqn. (29) in eqn. (27) we have

d Ci ∂ PL
+λ = λ i=1,2,………..,N (30)
d Pi ∂ Pi
N
and PD + PL − ∑P
i =1
i =0 (31)
d Ci ∂ PL
+λ = λ i=1,2,………..,N (30)
d Pi ∂ Pi
N
and PD + PL − ∑P
i =1
i =0 (31)

These equations can be solved for the plant generations P1 , P2 ,......... ., PN .

As shown in the next section the value of λ in eqn. (30) is the
INCREMENTAL COST OF RECEIVED POWER.

The eqns. described in eqn. (30) are commonly known as COORDINATION

d Ci
EQUATIONS as they link the incremental cost of plant , incremental
d Pi
cost of received power λ and the incremental transmission loss ( ITL )
∂ PL
. Equation (31) is the POWER BALANCE EQUATION.
∂ Pi
Coordination equations

d Ci ∂ PL
+λ = λ i=1,2,………..,N (30)
d Pi ∂ Pi

can also be written as

IC i + λ ITL i = λ i = 1,2,………..,N (32)

The N number of coordinate equations together with the power balance

equation are to be solved for the plant loads P1 ,P2 ,..........,PN to obtain the
economic schedule.
7 INCREMENTAL COST OF RECEIVED POWER

The value of λ in the coordination equations is the incremental cost of

received power. This can be proved as follows:

The coordination equations can be written as

∂ Ci ∂ PL
= λ [ 1− ] (33)
∂ Pi ∂ Pi

∆ Ci 1 ∆ Ci
i.e. =λ i.e. =λ (34)
∆ Pi ∆ PL ∆ Pi − ∆ PL
1−
∆ Pi
N
∂ PD ∂ PL
Since PD = ∑i =1
Pi − PL
∂ Pi
= 1−
∂ Pi
i.e. ∆ PD = ∆ Pi − ∆ PL (35)

∆ Ci
Using eqn,(35) in eqn.(34) gives =λ (36)
∆ PD
Thus λ is the incremental cost of received power.
8 PENALTY FACTORS
To have a better feel about the coordination equations, let us rewrite the
d Ci ∂ PL
same as = λ [ 1− ] i = 1,2,……..,N (37)
d Pi ∂ Pi

1 d Ci
Thus [ ] =λ i = 1,2,……..,N (38)
∂ PL d Pi
1−
∂ Pi
The above equation is often written as
d Ci
Li = λ i = 1,2,……..,N (39)
d Pi

where L i , which is called the PENALTY FACTOR of plant i, is given by

1
Li = i = 1,2,……..,N (40)
∂ PL
1−
∂ Pi
The results of eqn. (39) means that minimum fuel cost is obtained when the
incremental cost of each plant multiplied by its penalty factor is the same
for the plants in the power system.
9 OPTIMUM SCHEDULING OF SYSTEM LOAD BETWEEN PLANTS
- SOLUTION PROCEDURE

To determine the optimum scheduling of system load between plants, the

data required are i) system load, ii) incremental cost characteristics of the
plants and iii) loss coefficient matrix. The iterative solution procedure is:
Step 1
For the first iteration, choose suitable initial value of λ. While finding this,
one way is to assume that the transmission losses are zero and the plants
are loaded equally.
Step 2
Substitute the value of λ into the coordination equations
d Ci ∂ PL
+λ =λ i = 1,2,………..,N
d Pi ∂ Pi
N
i.e. ( 2 α i Pi + β i ) + λ ∑
n =1
2 B mn Pn = λ i = 1,2,………..,N

The above set of linear simultaneous equations are to be solved for the
values Pi' s by some efficient means. Gauss Seidel method is
recommended.
Step 3
Compute the transmission loss PL from PL = [ P ] [ B ] [ Pt ]
where [ P ] = [ P1 P2 ...........PN ] and [ B ] is the loss coefficient matrix.

Step 4
N
Compare ∑P
i =1
i with PD + PL to check the power balance. If the power

balance is satisfied within a specified tolerance, then the present solution

is the optimal solution; otherwise update the value of λ.

First time updating can be done judiciously. Value of λ is increased or

decreased by about 5% depending on
N N

∑P
i =1
i < PD + PL or ∑P
i =1
i > PD + PL

In the subsequent iterations, using linear interpolation, value of λ can be

updated as
 λ k +1
λk

λ k −1

∑P i
k −1
∑P i
k
PD + PLk

λ k − λ k −1 N
λ k +1 k
=λ + N N
k
[ PD + P −
L ∑P i
k
] (41)
∑P
i =1
i
k
− ∑P
i =1
i
k −1 i =1

Here k-1, k and k+1 are the previous iteration count, present iterative
count and the next iteration count respectively.
Step 5
Return to Step 2 and continue the calculations of Steps 2, 3 and 4 until the
power balance equation is satisfied with desired accuracy.

The above procedure is now illustrated through an example.

EXAMPLE 4
Consider a power system with two plants having incremental cost as
IC 1 = 1.0 P1 + 200 Rs / MWh IC 2 = 1.0 P2 + 150 Rs / MWh

 0.001 − 0.0005 
Loss coefficient matrix is given by B =  
− 0.0005 0.0024 
Find the optimum scheduling for a system load of 100 MW.

SOLUTION
Assume that there is no transmission loss and the plants are loaded
equally. Then P1 = 50 MW . Initial value of λ = ( 1.0 x 50 ) + 200 = 250 Rs /
MWh.
Coordination equations:
1.0 P1 + 200 + 250 ( 0.002 P1 − 0.001 P2 ) = 250
1.0 P2 + 150 + 250 ( − 0.001P1 + 0.0048 P2 ) = 250

i.e. 1.5 P1 − 0.25 P2 = 50 i.e. P1 = 33.3333 + 0.1667 P2

− 0.25 P1 + 2.2 P2 = 100 P2 = 45.4545 + 0.1136 P1
These equations are solved by Gauss Seidel method.
P1 = 33.3333 + 0.1667 P2 P2 = 45.4545 + 0.1136 P1

Iteration count P1 P2
0 0 0
1 33.3333 49.2411
2 41.5418 50.1736
3 41.6972 50.1913
4 41.7002 50.1916

 0.001 − 0.0005  41.7002 

PL = [41.7002 50.1916 ]   50.1916 
− 0.0005 0.0024   
0.01660 
= [41.7002 50.1916 ]   = 5.6918 MW
 0.09961
P1 + P2 = 91.8918 MW PD + PL = 105.6918 MW
Since P1 + P2 < PD + PL , λ value should be increased. It is increased by 4 %.
New value of λ = 250 x 1.04 = 260 Rs / MWh.
Coordination equations:
1.0 P1 + 200 + 260 ( 0.002 P1 − 0.001 P2 ) = 260
1.0 P2 + 150 + 260 ( − 0.001P1 + 0.0048 P2 ) = 260

i.e. 1.52 P1 − 0.26 P2 = 60 i.e. P1 = 39.4737 + 0.1711P2

− 0.26 P1 + 2.248 P2 = 110 P2 = 48.9324 + 0.1157 P1

These equations are solved by Gauss Seidel method.
Iteration count P1 P2
0 0 0
1 39.4737 53.4995
2 48.6275 54.5586
3 48.8087 54.5796
4 48.8123 54.5800

 0.001 − 0.0005  48.8123 

PL = [48.8123 54.5800 ]   54.5800 
− 0.0005 0.0024   
0.02152 
= [48.8123 54.5800 ]  
0.10659 
= 6.8681 MW
P1 + P2 = 103.3923 MW ; PD + PL = 106.8681 MW
P1 + P2 ≠ PD + PL
Knowing two values of λ and the corresponding total generation powers,
new value of λ is computed as
260 − 250
λ = 260 + ( 106.8681 − 103.3923 ) = 263 Rs / MWh
103.3932 − 91.8918
With this new value of λ, coordination equations are formed and the
procedure has to be repeated. The following table shows the results
obtained.
λ P1 P2 PL P1 + P2 PD + PL
250 41.7002 50.1916 5.6936 91.8918 105.6936
260 48.8123 54.5800 6.8681 103.3923 106.8681
263 50.9119 55.8769 7.2405 106.789 107.2405
263.3 51.1061 55.9878 7.2737 107.0939 107.2737
263.5 51.2636 56.0768 7.3003 107.3404 107.3003
263.467 51.2401 56.0659 7.2969 107.3060 107.2969

P1 = 51.2401 MW
Optimum schedule is
P2 = 56.0659 MW
For this transmission loss is 7.2969 MW
10 BASE POINT AND PARTICIPATION FACTORS

The system load will keep changing in a cyclic manner. It will be higher
during day time and early evening when industrial loads are high. However
during night and early morning the system load will be much less.

The optimal generating scheduling need to be solved for different load

conditions because load demand PD keeps changing. When load changes
are small, it is possible to move from one optimal schedule to another
using PARTICIPATING FACTORS.

We start with a known optimal generation schedule, P10, P20, …, PN0, for a
particular load PD. This schedule is taken as BASE POINT and the
corresponding incremental cost is λ0. Let there be a small increase in load
of ∆PD. To meet with this increased load, generations are to be increased
as ∆P1, ∆P2, …., ∆PN. Correspondingly incremental cost increases by ∆λ.
Knowing that for i th unit, Ci = αi Pi2 + βi Pi + γi , incremental cost is
ICi = 2 αi Pi + βi = λ (42)
Small change in incremental cost and corresponding change in generation
∆λ
are related as = 2 αi (43)
∆Pi

∆λ
Thus ∆Pi = for i = 1,2,……, N (44)
2 αi
Change in load should be equal to the total change in generations.
N N
1
Therefore ∆PD = ∑ ∆P
i=1
i = ∆λ ∑ 2α
i=1
(45)
i

1
∆ Pi 2α
From the above two equations = N i = ki for i = 1,2,……, N (46)
∆ PD 1
∑
i = 1 2 αi

∆ Pi
The ratio is known as the PARTICIPATION FACTOR of generator I,
∆ PD
represented as ki. Once all the ki s, are calculated from eq.(46), the change
in generations are given by ∆Pi = ki ∆PD for i = 1,2,……, N (47)
EXAMPLE 5
Incremental cost of three units in a plant are:
IC1 = 0.8 P1 + 160 Rs / MWh; IC2 = 0.9 P2 + 120 Rs / MWh; and
IC3 = 1.25 P3 + 110 Rs / MWh
where P1, P2 and P3 are power output in MW. Find the optimum load
allocation when the total load is 242.5 MW.
Using Participating Factors, determine the optimum scheduling when the
load increases to 260 MW.
Solution
Using the equal incremental cost rule
0.8 P1 + 160 = λ ; 0.9 P2 + 120 = λ ; 1.25 P3 + 110 = λ
λ − 160 λ − 120 λ − 110
Since P1 + P2 + P3 = 242.5 we get + + = 242.5
0.8 0.9 1.25
1 1 1 160 120 110
i.e λ [ + + ]= + + + 242.5 i.e. 3.1611 λ = 663.8333
0.8 0.9 1.25 0.8 0.9 1.25
This gives λ = 210 Rs / MWh
Optimum load allocation is
210 − 160 210 − 120 210 − 110
P1 = = 62.5 MW ; P2 = = 100 MW ; P31 = = 80 MW
0.8 0.9 1.25
Participation Factors are:
1
k1 = 0.8 = 0.3954
1 1 1
+ +
0.8 0.9 1.25
1
k2 = 0.9 = 0.3515
1 1 1
+ +
0.8 0.9 1.25
1
k3 = 1.25 = 0.2531
1 1 1
+ +
0.8 0.9 1.25
Change in load ∆PD = 260 – 242.5 = 17.5 MW
Change in generations are:
∆P1 = 0.3954 x 17.5 = 6.9195 MW
∆P2 = 0.3515 x 17.5 = 6.15125 MW
∆P3 = 0.2531 x 17.5 = 4.42925 MW
Thus optimum schedule is:
P1 = 69.4195 MW; P2 = 106.15125 MW; P3 = 84.42925 MW
Example 6
A power plant has two units with the following cost characteristics:
C1 = 0.6 P12 + 200 P1 + 2000 Rs / hour
C2 = 1.2 P22 + 150 P2 + 2500 Rs / hour
where P1 and P2 are the generating powers in MW. The daily load
cycle is as follows:
6:00 A.M. to 6:00 P.M. 150 MW
6:00 P.M. to 6:00 A.M. 50 MW
The cost of taking either unit off the line and returning to service after
12 hours is Rs 5000. Considering 24 hour period from 6:00 A.M. one
morning to 6:00 A.M. the next morning
a. Would it be economical to keep both units in service for this 24
hour period or remove one unit from service for 12 hour period from
6:00 P.M. one evening to 6:00 A.M. the next morning ?

b. Compute the economic schedule for the peak load and off peak
load conditions.

c. Calculate the optimum operating cost per day.

d. If operating one unit during off peak load is decided, up to what

cost of taking one unit off and returning to service after 12 hours, this
decision is acceptable ?
Solution
To meet the peak load of 150 MW, both the units are to be operated.
However, during 6:00 pm to 6:00 am, load is 50 MW and there is a choice
i) both the units are operating
ii) one unit (either 1 or 2 – to be decided) is operating

i) When both the units are operating

IC1 = 1.2 P1 + 200 Rs / MWh
IC2 = 2.4 P2 + 150 Rs / MWh Using equal IC rule
λ − 200 λ − 150
+ = 50; 1.25 λ = 279.1667 and λ = 223.3333
1.2 2.4
Therefore P1 = 19.4444 MW; P2 = 30.5555 MW
Then CT = 14319.42 Rs / h
For 12 hour period, cost of operation = Rs 171833.04
ii) If unit 1 is operating, C1Ι P1 = 50 = 13500 Rs / h
If unit 2 is operating, C2Ι P2 = 50 = 13000 Rs / h
Between units 1 and 2, it is economical to operate unit 2. If only one unit
is operating during off-peak period, cost towards taking out and
connecting it back also must be taken.

Therefore, for off-peak period (with unit 2 alone operating) cost of

operation = (13000 x 12) + 5000 = Rs. 161000
Between the two choices (i) and (ii), choice (ii) is cheaper. Therefore,
during 6:00 pm to 6:00 am, it is better to operate unit 2 alone.
b. During the peak period, PD = 150 MW. With equal IC rule
λ − 200 λ − 150
+ = 150; 1.25 λ = 379.1667 and λ = 303.3333
1.2 2.4
Therefore P1 = 86.1111 MW; P2 = 63.8889 MW
Thus, economic schedule is
During 6:00 am to 6:00 pm P1 = 86.1111 MW; P2 = 63.8889 MW
During 6:00 pm to 6:00 am P1 = 0; P2 = 50 MW

c. Cost of operation
= 12 [ C1ΙP1 = 86.1111 + C2ΙP2 = 63.8889 ]
for peak period
= 12 x 40652.78 = Rs 487833
Cost of operation for off-peak period = Rs 161000
Therefore, optimal operating cost per day = Rs 648833
d. If both the units are operating during
= Rs 171833
off-peak period, cost of operation

If unit 2 alone is operating during

= Rs (13000 x 12) + x
off-peak period, cost of operation
= Rs 156000 + x
For Critical value of x: 156000 + x = 171833
x = Rs 15833
Therefore, until the cost of taking one unit off and returning it to service
after 12 hours, is less than Rs 15833, operating unit 2 alone during the
off-peak period is acceptable.
11 UNIT COMMITMENT

Economic dispatch gives the optimum schedule corresponding to one

particular load on the system. The total load in the power system varies
throughout the day and reaches different peak value from one day to
another. Different combination of generators, are to be connected in the
system to meet the varying load.

When the load increases, the utility has to decide in advance the sequence
in which the generator units are to be brought in. Similarly, when the load
decrease, the operating engineer need to know in advance the sequence in
which the generating units are to be shut down.

The problem of finding the order in which the units are to be brought in and
the order in which the units are to be shut down over a period of time, say
one day, so the total operating cost involved on that day is minimum. This
is known as Unit Commitment (UC) problem. Thus UC problem is economic
dispatch over a day. The period considered may a week, month or a year.
But why is the problem in the operation of electric power system? Why not
just simply commit enough units to cover the maximum system load and
leave them running? Note that to “commit” means a generating unit is to
be “turned on”; that is, bring the unit up to speed, synchronize it to the
system and make it to deliver power to the network. “Commit enough units
and leave them on line” is one solution. However, it is quite expensive to
run too many generating units. A great deal of money can be saved by
turning units off (decommiting them) when they are not needed.
Example 7
The following are data pertaining to three units in a plant.
Unit 1: Min. = 150 MW; Max. = 600 MW
C1 = 5610 + 79.2 P1 + 0.01562 P12 Rs / h
Unit 2: Min. = 100 MW; Max. = 400 MW
C2 = 3100 + 78.5 P2 + 0.0194 P22 Rs / h
Unit 3: Min. = 50 MW; Max. = 200 MW
C3 = 936 + 95.64 P3 + 0.05784 P32 Rs / h
What unit or combination of units should be used to supply a load of 550
MW most economically?
Solution
To solve this problem, simply try all combination of three units. Some
combinations will be infeasible if the sum of all maximum MW for the units
committed is less than the load or if the sum of all minimum MW for the
units committed is greater than the load. For each feasible combination,
units will be dispatched using equal incremental cost rule studied earlier.
The results are presented in the Table below.
 Unit Min Max
1 150 600
2 100 400
3 50 200

Unit 1 Unit 2 Unit 3 Min. Gen Max. Gen P1 P2 P3 Total cost

Off Off Off 0 0 Infeasible
On Off Off 150 600 550 0 0 53895
Off On Off 100 400 Infeasible
Off Off On 50 200 Infeasible
On On Off 250 1000 295 255 0 54712
Off On On 150 600 0 400 150 54188
On Off On 200 800 500 0 50 54978
On On On 300 1200 267 233 50 56176

Note that the least expensive way of meeting the load is not with all the three
units running, or any combination involving two units. Rather it is
economical to run unit one alone.
Example 8
Daily load curve to be met by a plant having three units is shown below.

1200
MW

500
MW

12 noon 4 pm 8 pm 2 am 6 am 12 noon

Data pertaining to the three units are the same in previous example.
Starting from the load of 1200 MW, taking steps of 50 MW find the shut-
down rule.
Solution
For each load starting from 1200 MW to 500 MW in steps of 50 MW, we
simply use a brute-force technique wherein all combinations of units will
be tried as in previous example. The results obtained are shown below.
Optimum combination
Load
Unit 1 Unit 2 Unit 3
1200 On On On
1150 On On On
1100 On On On
1050 On On On
1000 On On Off
950 On On Off
900 On On Off
850 On On Off
800 On On Off
750 On On Off
700 On On Off
650 On On Off
600 On Off Off
550 On Off Off
500 On Off Off
The shut-down rule is quite simple.
When load is above 1000 MW, run all three units; between 1000 MW and
600 MW, run units 1 and 2; below 600 MW, run only unit 1.

It is to be noted that, in this brute-force technique, neglecting the number

of infeasible solutions, we need to solve the economic dispatch problem
(2N – 1)M where N is the number of units and M is the load steps. This
number will be too large for practical case. UC problem become more
complicated when we need to consider power system having several
plants each plant having several generating units.

So far, we have only obeyed one simple constraint: Enough units will be
connected to supply the load. There are several other constraints to be
satisfied in practical UC problem.
11 CONSTRAINTS ON UC PROBLEM
Some of the constraints that are to be met with while solving UC problem
are listed below.
1. Spinning reserve: There may be sudden increase in load, more than
what was predicted. Further there may be a situation that the
generating unit may have to be shut down because of fault in
generator or any of its auxiliaries.
Some system capacity has to be kept as spinning reserve
i) to meet an unexpected increase in demand and
ii) to ensure power supply in the event of any generating unit
suffering a forced outage.
2. Minimum up time: When a thermal unit is brought in, it cannot be
turned off immediately. Once it is committed, it has to be in the
system for a specified minimum up time.
3. Minimum down time: When a thermal unit is decommitted, it cannot
be turned on immediately. It has to remain decommitted for a
specified minimum down time.
4. Crew constraint: A plant always has two or more generating units. It
may not be possible to turn on more than one generating unit at the
same time due to non-availability of operating personnel.

5. Transition cost: Whenever the status of one unit is changed some

transition cost is involved and this has to be taken into account.

6. Hydro constraints: Most of the systems have hydroelectric units

also. The operation of hydro units, depend on the availability of
water. Moreover, hydro-projects are multipurpose projects.
Irrigation requirements also determine the operation of hydro
plants.
7. Nuclear constraint: If a nuclear plant is part of the system, another
constraint is added. A nuclear plant has to be operated as a base
load plant only.

8. Must run unit: Sometime it is a must to run one or two units from the
consideration of voltage support and system stability.

9. Fuel supply constraint: Some plants cannot be operated due to

deficient fuel supply.

10. Transmission line limitation: Reserve must be spread around the

power system to avoid transmission system limitation, often called
“bottling” of reserves.
12 PRIORITY- LIST METHOD
In this method the full load average production cost of each unit is
calculated first. Using this, priority list is prepared.

Full load average Production cost corresponding to full load

=
production of a unit Full load

Example 9

The following are data pertaining to three units in a plant.

Unit 1: Max. = 600 MW
C1 = 5610 + 79.2 P1 + 0.01562 P12 Rs / h
Unit 2: Max. = 400 MW
C2 = 3100 + 78.5 P2 + 0.0194 P22 Rs / h
Unit 3: Max. = 200 MW
C3 = 936 + 95.64 P3 + 0.05784 P32 Rs / h
Obtain the priority list
Solution
Full load average
5610 + 79.2 x 600 + 0.01562 x 600 2
= = 97.922
production of a unit 1 600

Full load average

3100 + 78.5 x 400 + 0.0194 x 400 2
= = 94.01
production of a unit 2 400

Full load average

936 + 95.64 x 200 + 0.05784 x 200 2
= = 111.888
production of a unit 3 200

A strict priority order for these units, based on the average production
cost, would order them as follows:

Unit Rs. / h Max. MW

2 94.01 400
1 97.922 600
3 111.888 200
The commitment scheme would (ignoring min. up / down time, start – up
costs etc.) simply use the following combinations.

Combination Load PD

2+1+3 1000 MW ≤ PD < 1200 MW

2+1 400 MW ≤ PD < 1000 MW
2 PD < 400 MW

Note that such a scheme would not give the same shut – down sequence
described in Example 7 wherein unit 2 was shut down at 600 MW leaving
unit 1. With the priority – list scheme both units would be held on until load
reached 400 MW, then unit 1 would be dropped.
Most priority schemes are built around a simple shut – down algorithm that
might operate as follows:

At each hour when the load is dropping, determine whether dropping the
next unit on the priority list will leave sufficient generation to supply the
load plus spinning reserve requirements. If not, continue operating as is; if
yes, go to next step.

Determine the number of hours, H, before the unit will be needed again
assuming the load is increasing some hours later. If H is less than the
minimum shut – down time for that unit, keep the commitment as it is and
go to last step; if not, go to next step.

Calculate the two costs. The first is the sum of the hourly production costs
for the next H hours with the unit up. Then recalculate the same sum for the
unit down and add the start – up cost. If there is sufficient saving from
shutting down the unit, it should be shut down; otherwise keep it on.

Repeat the entire procedure for the next unit on the priority list. If it is also
dropped, go to the next unit and so forth.
 Questions on “ Economic Dispatch and Unit Commitment”

1. What do you understand by Economic Dispatch problem?

2. For a power plant having N generator units, derive the equal
incremental cost rule.
3. The cost characteristics of three units in a power plant are given by

C1 = 0.5 P12 + 220 P1 + 1800 Rs / hour

C2 = 0.6 P22 + 160 P2 + 1000 Rs / hour
C3 = 1.0 P32 + 100 P3 + 2000 Rs / hour

where P1, P2 and P3 are generating powers in MW. Maximum and

minimum loads on each unit are 125 MW and 20 MW respectively.
Obtain the economic dispatch when the total load is 260 MW. What
will be the loss per hour if the units are operated with equal loading?
4. The incremental cost of two units in a power stations are:
dC1
= 0.3 P1 + 70 Rs / hour
dP1

dC 2
= 0.4 P2 + 50 Rs / hour
dP2
a) Assuming continuous running with a load of 150 MW, calculate the
saving per hour obtained by using most economical division of load
between the units as compared to loading each equally. The
maximum and minimum operational loadings of both the units are
125 and 20 MW respectively.

b. What will be the saving if the operating limits are 80 and 20 MW ?

5. A power plant has two units with the following cost characteristics:
C1 = 0.6 P12 + 200 P1 + 2000 Rs / hour
C2 = 1.2 P22 + 150 P2 + 2500 Rs / hour
where P1 and P2 are the generating powers in MW. The daily load
cycle is as follows:
6:00 A.M. to 6:00 P.M. 150 MW
6:00 P.M. to 6:00 A.M. 50 MW
The cost of taking either unit off the line and returning to service after
12 hours is Rs 5000. Considering 24 hour period from 6:00 A.M. one
morning to 6:00 A.M. the next morning

a. Would it be economical to keep both units in service for this 24

hour period or remove one unit from service for 12 hour period from
6:00 P.M. one evening to 6:00 A.M. the next morning ?

b. Compute the economic schedule for the peak load and off peak
load conditions.

c. Calculate the optimum operating cost per day.

d. If operating one unit during off peak load is decided, up to what

cost of taking one unit off and returning to service after 12 hours, this
decision is acceptable ?
6. What do you understand by “Loss coefficients”?

7. The transmission loss coefficients Bmn, expressed in MW-1 of a

power system network having three plants are given by
 0.0001 − 0.00001 − 0.00002 
B =  − 0.00001 0.0002 − 0.00003 
− 0.00002 − 0.00003 0.0003 

Three plants supply powers of 100 MW, 200 MW and 300 MW

respectively into the network. Calculate the transmission loss and
the incremental transmission losses of the plants.

8. Derive the coordination equation for the power system having N

number of power plants.
9. The fuel input data for a three plant system are:
f1 = 0.01 P12 + 1.7 P1 + 300 Millions of BTU / hour
f2 = 0.02 P22 + 2.4 P2 + 400 Millions of BTU / hour
f3 = 0.02 P32 + 1.125 P3 + 275 Millions of BTU / hour
where Pi’s are the generation powers in MW. The fuel cost of the
plants are Rs 50, Rs 30 and Rs 40 per Million of BTU for the plants 1,2
and 3 respectively. The loss coefficient matrix expressed in MW-1 is
given by
 0.005 − 0.0005 − 0.001 
B = − 0.0005 0.01 − 0.0015 
 − 0.001 − 0.0015 0.0125 

The load on the system is 60 MW. Compute the power dispatch for
λ = 120 Rs / MWh. Calculate the transmission loss.
Also determine the power dispatch with the revised value of λ taking
10 % change in its value.
Estimate the next new value of λ.
10. What are Participating Factors? Derive the expression for Participating
Factors.

11. Incremental cost of three units in a plant are:

IC 1 = 1.2 P1 + 21 Rs / MWh
IC 2 = 1.5 P2 + 15 Rs / MWh
IC 3 = 1.6 P3 + 24 Rs / MWh
where P1, P2 and P3 are power output in MW. Find the optimum load
allocation when the total load is 85 MW.
Using Participating Factors, determine the optimum scheduling when
the load decreases to 75 MW.

12. What is “Unit Commitment” problem? Distinguish between Economic

Dispatch and Unit Commitment problems.
13. Discuss the constrains on Unit Commitment problem.
14. Explain what is Priority List method.

ANSWERS
3. 64.29 MW 103.575 MW 92.145 MW Rs 449.09
4. Rs 111.39 Rs 57.64
5. It is economical to operate unit 2 alone during the off peak period.
86.1111 MW 63.8889 MW 0 50 MW Rs 648833 Rs 15833
7. 30.8 MW 0.004 0.06 0.164
9. 18.7923 MW 15.8118 MW 18.5221 MW
23.6506 MW 18.5550 MW 20.5290 MW
139.769 Rs / MWh
11. 32.5 MW; 30.0 MW; 22.5 MW
28.579 MW; 26.863 MW; 19.559 MW