The principle of minimum production cost model for multiple area interconnected power systems

A minimum cost production model which can be used to account economical energy exchange between utilities and evaluate production cost saving in multiple area interconnected systems is proposed in this paper. A fast probabilistic production simulation model is used to determine the thermal incremental cost of each system separately. Based on the thermal incremental cost of each subsystem, a nonlinear optimization model which minimizes the total production cost of the whole interconnected systems is used to determine the economical energy exchanges in the interconnected systems. Then total production cost and cost saving are for whole interconnected systems and each system. The minimum cost principle based on Lagrange multipliers is proposed to solve this nonlinear optimization problem. The tie line capacity limit and energy loss are included in the energy exchange process. Hourly loads are used in the model. The thermal incremental cost of each system and the energy exchanges between interconnected systems are evaluated hour by hour. Then a period summary report is produced. The proposed minimum cost model has been incorporated into FEPSS (Fast Electricity Production Simulation System) package. The Pacific Power Corporation, Australia has used this model to study power system interconnections in Southeast Australia.<>