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PRODUCTION COST
MODELS
Production cost models
are computational models designed to calculate information
for long-range system planning:
generation system production costs
energy import requirements
availability of energy for sale to other systems
fuel consumption
employs models of expected load patterns and simulated
operation of the systems generation
uncertainty of load forecasts
reliability of generating units
expected need for emergency energy and capacity supplies
uses statistical computational methods for solving problems
Stochastic production cost models
used for long range studies
the risk of sudden, random, generating unit failures and
random deviations for the mean forecasted load are
treated as probability distributions
load modeling considers the behaviors of the expected
load patterns that cover periods of weeks, months, and/or
years
the load duration cover expresses the time period that the
loading is expected to equal or exceed a given power value
generating unit modeling includes fuel costs usually
expressed over a monthly basis
generating unit scheduled maintenance outages may involve time
periods from days to years
Introduction
Types of production cost studies
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Load Duration Curves
Representation of future loads in which the impact
of capacity limitations will be studied
Building the load-duration curve
consider the expected load pattern
Load Duration Curves
build a histogram of
load for a given time
period and find the
load density function,
p(x)
integrate the load
density function to
obtain the load
distribution function,

Load Duration Curves

Building the load
duration curve
multiply the probability
by the period length to
show the number of hours
that load equals or
exceeds a given power
level, L
common convention has
the load on the vertical
axis
Block Loading
simulates the economic dispatch
procedure with this type of load model
generating units are ordered by cost
units are assumed to be fully loaded or
loaded up to the limitation of the load-
duration curve
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Example: Niagara-Mohawk System
Internal Peak Load is 1700 MW
Example 8A
consider a two generating unit system
that will serve the following expected
load pattern:
construct a load-duration curve in tabular
and graphic form
load-duration curve as a form of probability
distribution.
The load density and distribution functions, p(x) and
P
n
(x), respectively, are probabilities.
Thus, p(20) = 0, p(40) = 20/100 = 0.2, p(60) = 0,
P
n
(20) = P
n
(40) = 1.0, and P
n
(60) = 0.8, and so
forth.
the two generating units have the following characteristics
the fuel cost rate for each unit is a linear function of the
power output i.e.
F(P) = fuel cost at zero output + incremental cost rate x P.
block-load the two units onto the load-duration curve
unit #1 is used first because of its lower average cost per
MWh
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unit #1 is on-line for 100 h
80 MW output for 80 h
40 MW output for 20 h
unit #2 is on-line for 20 h
20 MW output for 20 h
Summary:
the production costs for unit 1
= hours on line x no load fuel cost rate + energy generated x
incremental fuel cost rate
= 100 h x 160 $/h + (6400 + 800) MWh x 8 $/MWh
= 16,000 $ + 57,600 $ = 73,600
Forced Outages
the time that the unit is not available due to a failure of
some sort
represents a random event
taken out of the total time that the unit should be available
for service
the forced outage rate is the ratio of forced outage
time over the total time available
schedule outage times for maintenance are excluded in
both the total time available and the forced outage time
Forced outage rates for all generating units must be
accounted for in the expected production costs
Example 8b
reconsider the previous example, but now including the effects of forced
outages
evaluate by load levels
Load = 40 MW; duration 20 h
Unit 1: on-line for 20 h, operates for 0.95 20 = 19 h
output: 40 MW, energy delivered: 19 40 = 760 MWh
Unit 2: on-line for 1 h, operates for 0.90 1 = 0.9 h
output: 40 MW, energy delivered: 0.9 40 = 36 MWh
load energy = 800 MWh
generation = 796 MWh
unserved energy = 4 MWh
shortage = 40 MW for 0.1 h
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Comments
it was necessary to make an arbitrary assumption that the
second unit will be on-line for any load level that equals or
exceeds the capacity of the first unit
the enumeration of the possible states is not complete
need to separate the periods when there is excess capability,
exact matching of generation and load, and shortages
when there is an exact matching of generation and load, it is
referred to as a zero-MW shortage
there are two such periods in the example
40 MW loading, 20 h duration, unit 2 on: 0.05 0.9 20 = 0.9 h
80 MW loading, 60 h duration, unit 1 on: 0.95 0.1 60 = 5.7 h
total zero-reserve expected duration: 6.6 h
Summary of all possible states
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Summary of generation cost results unserved load
Probabilistic Production Cost
Operating experience indicates that the force outage rate
of thermal-generating units tends to increase with unit size
the frequent long-duration outages of the more efficient base-
load units require running the less efficient, more expensive plants
at higher than expected output and the importation of
emergency energy
Two measures of system unreliability due to random
forced generator failures:
time period when the load is greater than available generation
capacity
the expected levels of power and energy that must be imported
to satisfy the load demand
these are sensitivity indicators of the need to add generator
or tie-line capacity
Probabilistic Production Cost Computations
mathematical methods that make use of probabilistic models
load models
energy and capacity models for generators
generator models represent the unavailability of basic energy resources,
random forced outages, and the effects of energy sale/purchase contracts
tie-line models represent the expected cost of emergency energy, also
called the cost of unsupplied energy
techniques for the convolution of the load distributions with the
capacity-probability density functions
numerical convolution of discrete functions
Unserved load distribution method
Expected cost method
analytical convolution of continuous functions
Cumulants method
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The Unserved Load Distribution Method
The area under the load distributions represent needed
energy
The individual unit probability capacity density functions are
convolved one by one with the load distribution function
each convolution result is an unserved load distribution, which will be
used for the next convolution
the overall result is a series of unserved load distributions
the sequence of convolutions is determined by a fixed economic
loading criterion that sets the order of the generator units
A units energy production is found from the difference in the
energy from the unserved load distribution prior to convolution
and the energy from the new unserved load distribution after
the convolution
The Expected Cost Method
The individual unit probability capacity density
functions are convolved with one another
the sequence of convolutions is determined by a fixed
economic criterion that sets the order of the generator units
the convolutions of the generating units produces a set of
available capacity distributions, each with an associated
cost curve as a function of total power generated
The resultant expected cost curve is convolved with
the load distribution function
this produces the expected value of production cost to serve
the given load forecast
Data Representation
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The Unserved Load Method
Load is modeled as a load-duration curve
a probability distribution that is expressed in hours that the load equals
or exceeds a given power value
monotonically decreasing function with increasing load
can be treated as cumulative probability density function, Pn(x) or can be
expressed in hours, T Pn(x) where T is the duration of time interval
for numerical analysis
treat it in terms of regular discrete steps in a recursive algorithm
procedural steps
if there is a segment of capacity with a total of C MW available for
scheduling
let q be the probability that C MW are unavailable
and p = 1 q (that is the availability probability of the segment)
The Unserved Load Method
then after the segment is scheduled
the probability of needing x MW or more is now

because the occurrence of loads and unexpected
unit outages are statistically independent events, the
new probability distribution function is a combination
of the two mutually exclusive events

is the probability that new capacity C MW is

unavailable and needing x MW or more

+ is the probability that C is available and

needing (x + C) MW or more
The Unserved Load Method
first, the generation requirements for any
generating segment are determined by the
knowledge of the distribution

that exists
prior to the dispatch of the particular generating
segment
the value of

0 determines the required hours of

operation of a new unit, and the area under the distribution

between zero and the rating of the unit determines

the energy production
if a generation segment is not perfectly reliable, there will
be a residual distribution of demands that cannot be served
by this particular segment because of forced outages
The Unserved Load Method
Representing the forced outage when the unit is needed
for

0 hours
on average it is only available for 1

(0) hours
energy required by the load distribution that the unit could serve

the unit can only generate (1 ) because of its expected
unavailability

.
suppose that the unit has a linear input-output cost function the
expected production cost for this period
[

0 +

1
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The Unserved Load Method
there is a residual of unserved demands due to
the forced outages of the unit
the new distribution of the probabilities of
unserved load

+ 1

+
the process may be repeated until all units have
been scheduled
a residual distribution remains that gives the
final distribution of unserved demand
Example 8C
Example 8C Example 8C
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Example 8C Example 8C
Example 8C Example 8C
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