ECE 740

Optimal Power Flow

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 Economic Dispatch

A B C L

• Objective: minimize the cost of generation

• Constraints
– Equality constraint: load generation balance
– Inequality constraints: upper and lower limits on
generating units output

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 Limitations of Economic Dispatch
B C

Network

A D

• Generating units and loads are not all

connected to the same bus
• The economic dispatch may result in
unacceptable flows or voltages in the network
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 Example A - Network Limitation

B
A
LA LB

Maximum flow on each line: 100MW

CA CB

50 $/MWh 100$/MWh
PA PB
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PAMAX PBMAX
 Acceptable ED Solution
100 MW 0 MW
300 MW
B
A

LA = 100 MW 100 MW LB = 200MW

The solution of this (trivial) economic dispatch is:

The flows on the lines are below the limit

The economic dispatch solution is acceptable

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 Unacceptable ED Solution
200 MW 0 MW
500 MW
B
A

LA = 100 MW 200 MW LB = 400MW

The solution of the economic dispatch is:

The resulting flows exceed their limit

The economic dispatch solution is not acceptable

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 Modified ED Solution
100 MW 200 MW
300 MW
B
A

LA = 100 MW 100 MW LB = 400MW

In this simple case, the solution of the economic dispatch

can be modified easily to produce acceptable flows.

This could be done mathematically by adding the following

inequality constraint:

However, adding inequality constraints for each problem

is not practical in more complex situations
We need a more general approach
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Example B - Marginal (Incremental) Cost
Below are graphs associated with this two bus system. The graph
on left shows the marginal cost for each of the generators. The
graph on the right shows the system supply curve, assuming the
system is optimally dispatched.

16.00 16.00

15.00 15.00

14.00 14.00

13.00 13.00

12.00 12.00
0 175 350 525 700 0 350 700 1050 1400
Generator Power (MW) Total Area Generation (MW)

Current generator operating points 8

Two Bus Economic Dispatch Example

Total Hourly Cost : 8459 $/hr

Area Lambda : 13.02

Bus A Bus B

300.0 MW 300.0 MW
199.6 MW 400.4 MW
AGC ON AGC ON

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 Two Bus with Unconstrained Line
With no
overloads the Transmission line
OPF matches Total Hourly Cost : 8459 $/hr is not overloaded
Area Lambda : 13.01
the economic
dispatch

Bus A 13.01 $/MWh Bus B 13.01 $/MWh

300.0 MW 300.0 MW
197.0 MW 403.0 MW
AGC ON AGC ON

Marginal cost of supplying

power to each bus (locational
marginal costs)
This would be price paid by load
and paid to the generators. 10
 Two Bus with Constrained Line

Total Hourly Cost : 9513 $/hr

Area Lambda : 13.26

Bus A 13.43 $/MWh Bus B 13.08 $/MWh

380.0 MW 300.0 MW
260.9 MW 419.1 MW
AGC ON AGC ON

With the line loaded to its limit, additional load at Bus A must be supplied
locally, causing the marginal costs to diverge.
Similarly, prices paid by load and paid to generators will differ bus by bus.
(In practice, some markets such as ERCOT charge zonal averaged price to load.)
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 Optimal Power Flow (OPF)
OPF functionally combines the power flow
with economic dispatch.
Minimize cost function (operating cost) while
taking into account realistic equality and
inequality constraints.
Equality constraints:
– bus real and reactive power balance
– generator voltage set points
– area MW interchange
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 OPF
Inequality constraints:
– transmission line/transformer/interface flow limits
– generator MW limits
– generator reactive power capability curves
– bus voltage magnitudes.
Available Controls:
– generator MW outputs
– transformer taps and phase shifters

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 OPF
• Optimization problem: Classical objective
function
– Minimize the cost of generation
• Equality constraints
– Power balance at each node - power flow
equations
• Inequality constraints
– Network operating limits (line flows, voltages)
– Limits on control variables

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 Mathematical Formulation of the OPF
• Control variables:
– Active power output of the generating units
– Voltage at the generating units
– Position of the transformer taps
– Position of the phase shifter taps
– Status of the switched capacitors and reactors
• Vector of control variables:

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 Mathematical Formulation of the OPF
• State variables
– Describe the response of the system to changes in
the control variables
– Magnitude of voltage at each bus
• Except generator busses, which are control variables
– Angle of voltage at each bus
• Except slack bus
• Vector of state variables:

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 Mathematical Formulation of the OPF
• Parameters
– Known characteristics of the system
– Assumed constant
• Network topology
• Network parameters (R, X, B, flow and voltage limits)
• Generator cost functions
• Generator limits
• …
• Vector of parameters:

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 Mathematical Formulation of the OPF
• Classical objective function:
– Minimize total generating cost:
• Equality constraints:
– Power balance at each node - power flow equations

• Compact expression:

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Mathematical Formulation of the OPF

• Inequality constraints:
– Limits on the control variables:

– Operating limits on flows:

– Operating limits on voltages

• Compact expression:

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Compact form of the OPF problem

Subject to:

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 OPF Challenges

• Size of the problem in a large power system

– 1000’s of lines, hundreds of controls
– Which inequality constraints are binding?
• Problem is non-linear
• Problem is non-convex
• Some of the variables are discrete
– Position of transformer and phase shifter taps
– Status of switched capacitors or reactors

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Solving the OPF using gradient methods

• Build the Lagrangian function

• The gradient of the Lagrangian indicates the

direction of steepest ascent:

• Move in the opposite direction to the point

with the largest gradient
• Repeat until
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 Problems with Gradient Methods

• Slow convergence
• Objective function and constraints must be
differentiable
• Difficulties in handling inequality constraints
– Binding inequality constraints change as the
solution progresses

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 Linearizing the OPF problem

• Use the power of linear programming

• Objective function
– Use linear or piecewise linear cost functions
• Equality constraints
– Use dc power flow instead of ac power flow
• Inequality constraints
– dc power flow provides linear relations between
injections (control variables) and MW line flows

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 Sequential LP OPF
• Consequence of linear approximation
– The solution may be somewhat sub-optimal
– The constraints may not be respected exactly
• Need to iterate the solution of the linearized
problem
• Algorithm:
1. Linearize the problem around an operating point
2. Find the solution to this linearized optimization
3. Perform a full ac power flow at that solution to find
the new operating point
4. Repeat

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 Advantages and disadvantages
• Advantages of LPOPF method
– Convergence of linear optimization is guaranteed
– Fast
– Reliable optimization engines are available
– Used to calculate nodal prices in electricity
markets
• Disadvantages
– Need to iterate the linearization
– “Reactive power” aspects (VAr flows, voltages) are
much harder to linearize than the “active power
aspects” (MW flows)
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 Example C - 3 Bus Example
 Consider a three bus case (bus 1 is system
slack), with all buses connected through 0.1 pu
reactance lines, each with a 100 MVA limit.
 Let the generator marginal costs be:
 Bus 1: 10 $ / MWhr; Range = 0 to 400 MW,
 Bus 2: 12 $ / MWhr; Range = 0 to 400 MW,
 Bus 3: 20 $ / MWhr; Range = 0 to 400 MW,
 Assume a single 180 MW load at bus 3.

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B3 with Line Limits NOT Enforced

60 MW 60 MW
Bus 2 Bus 1
10.00 $/MWh

0.0 MW 10.00 $/MWh

120 MW 180.0 MW
120%
0 MW
60 MW
120% 120 MW
Total Cost 60 MW Line from Bus 1
1800 $/hr to Bus 3 is over-
Bus 3 10.00 $/MWh
loaded; all buses
180 MW
have same
0 MW marginal cost
(but not allowed to
dispatch to overload
line!) 28
 B3 with Line Limits Enforced

20 MW 20 MW
Bus 2 Bus 1
10.00 $/MWh

60.0 MW 12.00 $/MWh

100 MW 120.0 MW
100%
0 MW
80 MW
100% 100 MW
Total Cost 80 MW
1920 $/hr LP OPF re-dispatches
Bus 3 14.00 $/MWh to remove violation.
180 MW Bus marginal
costs are now
0 MW different.
Prices will be different
at each bus.
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 Verify Bus 3 Marginal Cost

19 MW 19 MW
Bus 2 Bus 1
10.00 $/MWh

62.0 MW 12.00 $/MWh

100 MW 119.0 MW
81% 100%
0 MW
81 MW
81% 100% 100 MW
Total Cost 81 MW
1934 $/hr
Bus 3 14.00 $/MWh
One additional MW
181 MW of load at bus 3
raised total cost by
0 MW 14 $/hr, as G2 went
up by 2 MW and G1
went down by 1MW. 30
 Why is Bus 3 LMP = $14 /MWh ?

 All lines have equal impedance. Power flow in

a simple network distributes inversely to
impedance of path.
– For bus 1 to supply 1 MW to bus 3, 2/3 MW would
take direct path from 1 to 3, while 1/3 MW would
“loop around” from 1 to 2 to 3.
– Likewise, for bus 2 to supply 1 MW to bus 3,
2/3MW would go from 2 to 3, while 1/3 MW
would go from 2 to 1to 3.

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 Why is Bus 3 LMP $ 14 / MWh?
 With the line from 1 to 3 limited, no additional
power flows are allowed on it.
 To supply 1 more MW to bus 3 we need:
 Extra production of 1MW: Pg1 + Pg2 = 1 MW
 No more flow on line 1 to 3: 2/3 Pg1 + 1/3 Pg2 = 0;
 Solving requires we increase Pg2 by 2 MW and
decrease Pg1 by 1 MW – for a net increase of
$14/h for the 1 MW increase.
 That is, the marginal cost of delivering power
to bus 3 is $14/MWh. 32
Both Lines into Bus 3 Congested
0 MW 0 MW
Bus 2 Bus 1
10.00 $/MWh

100.0 MW12.00 $/MWh

100 MW 100.0 MW
100% 100%
0 MW
100 MW
100% 100% 100 MW
Total Cost100 MW
2280 $/hr
Bus 3 20.00 $/MWh For bus 3 loads
above 200 MW,
204 MW
the load must be
4 MW supplied locally.

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 Limiting Carbon Dioxide Emissions
• There is growing concern about the need to limit
carbon dioxide emissions.
• The two main approaches are (1) a carbon tax, or
(2) a cap-and-trade system (emissions trading)
• The tax approach involves setting a price and emitter of
CO2 pays based upon how much CO2 is emitted.
• A cap-and-trade system limits emissions by requiring
permits (allowances) to emit CO2. The government sets
the number of allowances, allocates them initially, and
then private markets set their prices and allow trade.

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