2.

Power System Economic Operation Overview 47

PQ.I =MCqj _.u.1Min +.u.1Max (19)

JlMin and JlMax are the duals associated with the constraints on lower and
upper reactive generation limit respectively while MCq is the marginal cost
of reactive power delivery at a bus [33, 26]. It is to be noted that the above
formulation for real and reactive power prices can be extended to include the
duals of other operating constraints as well.

4. UNIT COMMITMENT (UC)

The UC problem is a somewhat longer term scheduling problem usually

covering a time range from 24 hours (I day) to 168 hours (I week) ahead,
and is handled by the operator in the pre-dispatch stage. In this problem, the
operator needs to take decisions on how to commit or de-commit (i.e. keep
running or shut down) its available units over the week, or over the next day.
The input to the operator is the demand forecast for the next week or next
day, as the case may be, aggregated for the whole system.
In the same way, that the ELD problem is formulated, the operator seeks
to minimize its system costs over the planning horizon in a UC problem,
while meeting the forecast demand to decide upon the unit up I down status
for every hour.
This planning activity is essential due to the fact that the system load
varies over a day or even over a weekly period and hence it is not
economical to keep all the units on-line for the entire duration. A proper
schedule for starting up, or shutting down the units can save costs
significantly.
UC problems are much more complex to solve, compared to the ELD
problem discussed earlier, due to the presence of binary decision variables
on unit status (on loff). Depending upon the need of the system and
computational facilities, the utilities choose to use UC models that suit their
requirements.
In the following sub-sections, we first discuss the basic structure of an
UC model and subsequently some of those additional issues addressed
within the UC set up by various researchers.
48 Chapter 2

4.1 DC: The Basic Model

4.1.1 Objective Function

As mentioned earlier, the operator's objective function, while solving the

UC problem still remains the same, i.e., to minimize the system costs.
However, due to the longer time-scale of the problem, the total system cost
will be affected by the start-up and shut down decisions of generating units,
effected within the planning period. These are explained below.

~ Fuel Cost: There have been two different approaches to represent fuel
costs in UC models. The first and the most common approach has been
to use a cost characteristic derived from the heat-rate characteristics and
represented by a polynomial function, which is usually quadratic, and
can be written as follows,

(20)

The other approach has been to represent the generator cost as a

constant, which is derived from the generator's average full load cost.

~ Start Up Cost: This component appears in the UC objective function to

take into account the cost incurred during a generator start-up operation.
This is often modeled as a function of the time for which the unit was
off-line.

(21)

a is a fixed cost associated with the unit start-up, ~ is the cost involved
in a cold start-up,ro FF
is the time for which the unit has been off and 't
is a time-constant representing the cooling speed of the unit.
Another approach has been to use a constant cost representation,
which is included in the objective function when the unit is on start-up.

~ Shut Down Cost: Usually this component of cost is not considered in

UC models since it is not very significant compared to other costs.
However, a constant cost representation has been used in [34], and is
included when the unit undergoes a shut down.
2. Power System Economic Operation Overview 49

The composite objective function for the UC problem can be constructed

using the above as follows:

J= ±rrc- k (Po k)· W

I'.t I, k +ST1, k . USTI, k +SO·1, k . USO·I, k)] (22)
k=i

UST, USD and Ware integer decision variables denoting the status of the
unit at hour k. W denotes the unit status (I = running, 0 = oft); UST denotes
= =
the unit start-up state (I start-up, 0 no start-up) and USD denotes the unit
= =
shut down state (I shut down, 0 no shut down).

4.1.2 Constraints in Unit Commitment

4.1.2.1 Demand-Supply Balance and Spinning Reserves

This constraint ensures that the operator has scheduled enough capacity
for a particular hour so that the demand at that hour is met. This can also
include any pre-decided import or export contracts with other utilities, and a
certain amount of reserve capacity. A typical demand-supply balance
constraint is given as follows.

NG
IPi,k ·Wi,k +(Ik -Ek)~POk +RESVk (23)
i=1

The term RESV denotes the spinning reserve in the system, which is a
reserve available to the operator from among its spinning units, i.e. from the
generators already running. Therefore, this reserve is available almost
instantaneously to the operator in case of need. The operator has the very
important responsibility of maintaining adequate spinning reserves in the
system, not only on a total-MW basis, but he also needs to take care of the
location aspect of this reserve, taking into account transmission capacities
available in the system.
The operator generally uses his experience or certain rules for
determining this reserve to be maintained in his system. As mentioned in
[35], the RESV component could typically comprise a base component, a
fraction of the load requirement and a fraction of the high operating limit of
the largest on-line unit.

4.1.2.2 Minimum Up and Down Time Constraints on Thermal Units

These constraints ensure the minimum number of hours a unit must be
on, before it can be shut down (minimum up-time) or the minimum number
of hours a unit must be off-line before it can be brought on-line again
50 Chapter 2

(minimum down-time). These constraints are usually applicable to large

thermal units.

MUT
L USD1h,k-n+l ~ I; V k~MUT
n=1
(24)
MDT
L UST1h,k_m+1 ~ I; V k~MDT
m=1

MUT is the minimum time in hours the unit should be running before
shut down; MDT is the minimum time in hours the unit should remain shut
down before start-up,

4.1.2.3 Generation Limit

This constraint describes the allowable range of generation available for
scheduling, as defined by the maximum and minimum limits of the unit.

pMin < p. .
i - I.k
w.I,k -< pMax
i (25)

4.1.2.4 Must-Run Units

Some units such as large coal-based units or nuclear units cannot be start up
or shut down on a day-to-day basis following the daily load variations because
they involve very high start-up costs and other technical constraints. Such units
need to be assigned a must-run status.

V ieMR (26)

4.1.2.5 Crew Constraints

These constraints pertain to the number of units that can be started at the
same time in a particular plant.

4.2 DC: Additional Issues

The UC model described in the earlier sub-section, or one of its

variations is generally used by the dispatcher to obtain the commitment
schedules. Many additional issues have been addressed within the UC
framework, upon which we shall dwell briefly next.
2. Power System Economic Operation Overview 51

4.2.1 Multi-Area UC

UC has been adapted in the context of multi-area systems where

individual utilities are interconnected by tie lines and the dispatch is carried
out jointly [36, 37]. The additional constraint introduced in this class of
problems is the inter-area transmission constraint, which can impose severe
restrictions on the optimal solution. In [36] the inter-area transmission lines
are modeled using a linear flow network model while in [37] a dc power
flow representation is used. It is seen from these works that the joint
scheduling of multi-area systems can bring about significant reduction in
system costs. Such systems are seen to be vulnerable to transmission
capacity availability, which is a critical parameter in determining the level of
savings achievable from joint dispatch.

4.2.2 Fuel Constrained UC

Another important issue addressed within the UC framework, is fuel

supply planning, which when properly coordinated with generation
scheduling can reduce system costs significantly.
In [38], the fuel co-ordination problem has been considered over a time
horizon of one-month, for three types of units (a) oil-fired (b) fuel-
constrained LNG/LPG fired and (c) pumped storage hydro units. The fuel
consumption is modeled as a function of power generated and unit start-up,
and constrained by a fixed availability over the planning horizon. In [34,39
and 40] different kinds of fuel contracts, constraints on gas consumption and
gas delivery systems have been incorporated in the daily generation
scheduling program.

4.2.3 Ramp Rate Constraint on Thermal Units

Ramp rate constraints were introduced earlier in Section-2.3 in the

context of the dynamic economic dispatch problem. This constraint limits
the inter-hour generation change in a unit, and is particularly applicable to
coal-based thermal units. While researchers have used several models of the
ramp constraint, a typical formulation is shown below.

Pi.k :s; RUP j . Pi.k-I

(27)
Pi.k ~ RDNj .Pi.k-I

RUP and RON are the ramp-up and ramp-down constants of a unit. This
constraint links the generation variable of the previous hour to that of the
52 Chapter 2

present hour, and hence introduces a dynamic characteristic in the UC

models [34].
A viable way of dealing with ramping constraints in a dynamic
programming algorithm has been developed in [41]. In [42] the ramp rate
constraints are applied exogenous to the UC model, i.e.. first a UC solution
is obtained without the ramp limits, thereby reducing the computation.
Thereafter, a backward dynamic procedure is used to update the UC
schedules taking into account the inter-hour load changes and the system's
capability to respond to it. A price based UC is developed in [43] wherein
the impact of ramp-rate constraint is examined via the hourly marginal
ramp-rate values, i.e. the Lagrange multipliers associated with ramp-rate
constraint. In [44], ramp constraints have totally been done with, and
instead, the objective function is augmented with an additional term, the
ramping cost, which is related to depreciation in shaft life. While [43] has
used Lagrange multipliers for each unit's ramp-rate constraint, in [45], a
system ramp multiplier has been introduced that is based on the inter hour
demand fluctuation, adjusted to obtain the optimal dispatch.

4.2.4 Transmission Constraints

Accounting for transmission losses is a subject where conventional UC

models make simplifying assumptions. Similarly, most UC models neglect
the power transmission limits of lines, limits on bus voltages and limits on
reactive generation. It might so happen that a UC solution obtained without
considering these constraints couldn't be implemented in the actual system,
because it failed to satisfy the load flow requirements.
Therefore, inclusion of transmission constraints in UC programs helps to
represent the transmission losses more accurately and also ensures that the
actual dispatch does not deviate much from the UC solution obtained in the
pre-dispatch stage.
DC load flow representations have been used in [34, 46 and 47] to
represent the transmission line capacity limits though the ideal way would be
to include an ac load flow model within the UC. That would however, make
the computations extremely complex. In [48] a generalized UC problem has
been developed that considers the power flow constraints, line flow limits as
well as voltage limits. Recently, OPF with transmission security and voltage
constraints have been included within the UC model formulation and is
solved by decomposing the model into a UC master problem and a
transmission and reactive power sub-problem [35].
2. Power System Economic Operation Overview 53

4.2.5 Environmental Issues

Maintenance of environmental standards and meeting targets for

reduction of emission are important considerations to those utilities with a
dominant share of fossil fuel. Such utilities are required to carry out their
generation scheduling activity keeping environmental constraints into
account. This issue has been addressed in [35 and 47] wherein the
generator's emission characteristic is represented by a polynomial function
of the power generation. The total emission from the system is constrained
by a pre-defined emission cap.

The comprehensive survey of the UC literature in [49] provides a

summary of the important work, which appeared till 1991, and also classifies
them on the basis of the techniques used to solve the UC problem. A clear
trend has been established in the choice of the Lagrangian relaxation
technique as the most preferred and efficient technique.

5. FORMATION OF POWER POOLS

So far, we discussed the basic ideas of least-cost system operation and

short-term generation scheduling. The objective of the planner or system
operator was to achieve the system least cost operating strategy while
meeting the demand and other constraints.
In order to achieve further reduction in system cost many utilities in US
during the seventies and eighties used to form power pools and operate in a
coordinated manner so as to minimize the pool costs. This was possible by
transmitting power from a utility, which had cheaper sources of generation
to another utility having costlier generation sources. The total reduction in
system cost was termed as pool savings and was shared by the participating
utilities.
This form of co-operation between utilities to reduce system cost while
increasing their individual benefit, was further boosted by the (US) Power
Utilities Regulatory Policy Act of 1978 (PURPA). This Act required the
utilities to interconnect with co-generating plants or NUG 2, to purchase
power at prices up to its avoided cost. With the introduction of this Act, co-
generation units received an incentive for producing additional power,
something that was, earlier, not lucrative enough, and the quantity of power

2 Non-utility generation or NUG was the term used to classify co-generating units and all such
units, which satisfied the PURPA minimum efficiency and fuel use criteria. Such units
were called qualifying facilities. However, NUG could also include large independent
power producers. which provided capacity sales to utilities [50).