slide 1: Appendix B 243
Appendix B: Electric Power System Basics
B.1 INTRODUCTION
Electricity is critical to our daily lives yet most
people have little understanding of the complex
process that brings electric power to our homes
offices and factories whenever we demand it.
This appendix is a tutorial on how the electric
power system works. We assume no prior
knowledge in the area and start by providing
a description of the physical foundations of
electricity. We next discuss the structure and
components of the electric power system. We
follow with an explanation of how the system is
operated and how wholesale electricity markets
work. In the final section we provide a brief
overview of system planning. Because there are
slight differences in the structure operation
and planning of the electric power system from
country to country and region to region we
focus mostly on fundamental aspects that remain
unchanged however where appropriate we
provide U.S.-centric details and highlight
important variations in practice.
B.2 FUNDAMENTALS OF ELECTRIC POWER
T o understand electric power systems it is
helpful to have a basic understanding of the
fundamentals of electricity. These include the
concepts of energy voltage current direct
current dc alternating current ac imped-
ance and power.
i
Energy
Energy is the ability to perform work. Energy
cannot be created or destroyed but can be
converted from one form to another.
ii
For
example chemical energy in fossil fuels can
be converted into electrical energy and electrical
energy in turn can be converted into useful work
in the form of heat light and motion. While the
scientific community measures energy in watt-
seconds or joules traditionally in the electric
power industry energy is measured in watt-hours
Wh and for larger values is expressed in kilowatt
thousand watt kW megawatt million watt
MW gigawatt billion watt GW or terawatt
trillion watt TW hours.
iii
A 100 watt lightbulb
consumes 2400 Wh or 2.4 kWh of energy in
24 hours and the total annual electrical energy
consumption of the U.S. in 2010 was about
3900 TWh.
1
One kilowatt hour is equivalent to
3.6 megajoules.
V oltage
Voltage also referred to as potential is mea-
sured between two points and is a measure of the
capacity of a device connected to those points
to perform work per unit of charge that flows
between those points. Voltage can be considered
analogous to the pressure in a water pipe. Voltage
is measured in volts V and for large values
expressed in kilovolts kV or megavolts MV.
i
Those who only desire a high-level understanding of electric power systems can skip this section.
ii
If mass is not considered a form of energy an exception is in nuclear reactions where mass and energy can be
transformed into one another.
iii
Watt is the unit of power or the rate of flow or consumption of energy as discussed later in this section.
slide 2: 244 MIT STUDY ON THE FUTURE OF THE ELECTRIC GRID
Current
Current is a measure of the rate of flow of
charge through a conductor. It is measured in
amperes. Current can be considered analogous
to the rate of flow of water through a pipe.
Dc and Ac
Current can be unidirectional referred to as
“direct current” or it can periodically reverse
directions with time in which case it is called
“alternating current.” Voltage also can be
unipolar—in which one point is always at a
higher voltage than the other—or alternating in
polarity with time. Unipolar voltage is referred
to as “dc voltage.” Voltage that reverses polarity
in a periodic fashion is referred to as “ac
voltage.” Alternating currents and voltages in
power systems have nearly sinusoidal profiles.
Ac voltage and current waveforms are defined
by three parameters: amplitude frequency and
phase as shown in Figure B.1. The maximum
value of the waveform is referred to as its
“amplitude.” The amplitude of the ac voltage in
a standard 120 V outlet is 170 V . The 120 V in
this case refers to the root-mean-square rms
value of the voltage and is the equivalent dc
voltage with the capacity to perform the same
amount of work. In the case of ac the ampli-
tude is equal to the rms value multiplied by the
square root of two. In the case of dc the
amplitude and rms values are the same.
Frequency is the rate at which current and
voltage in the system oscillate or reverse direc-
tion and return. Frequency is measured in cycles
per second also called “hertz” Hz. In the U.S.
as well as the rest of North America and parts
of South America and Japan the ac system
frequency is 60 Hz while in the rest of the world
it is 50 Hz.
2
Dc can be considered a special case
of ac one with frequency equal to zero.
Figure B.1 Amplitude Frequency Period and Phase of an Alternating Current or Voltage
Waveform
0
root-mean-square
value
time
amplitude
phase
period
1
frequency
slide 3: Appendix B 245
The time in seconds it takes for an ac waveform
to complete one cycle the inverse of frequency
is called the “period.” The phase of an ac
waveform is a measure of when the waveform
crosses zero relative to some established time
reference. Phase is expressed as a fraction of the
ac cycle and measured in degrees ranging from
-180 to +180 degrees. There is no concept of
phase in a dc system.
Electric power systems are predominantly ac
although a few select sections are dc. Ac is
preferred because it allows voltage levels to be
changed with ease using a transformer. The
voltage level of a dc system also can be changed
but doing so requires more sophisticated and
expensive equipment using power electronics
technology. However dc can be advantageous
when energy has to be transmitted over long
distances for reasons discussed later. Dc also
is used to connect ac systems that operate at
different frequencies as in Japan or systems
with identical frequencies that are not synchro-
nized as between interconnections in the U.S..
iv
Impedance
Impedance is a property of a conducting
device—for example a transmission line—that
represents the impediment it poses to the flow
of current through it. The rate at which energy
flows through a transmission line is limited
by the line’s impedance. Impedance has two
components: resistance and reactance. Imped-
ance resistance and reactance are all measured
in ohms.
Resistance
Resistance is the property of a conducting
device to resist the flow of ac or dc current
through it. A transmission line is composed of
wires known as “conductors” whose resistance
increases with length and decreases with
increasing conductor cross-sectional area.
Resistance causes energy loss in the conductor
as moving charges collide with the conductor’s
atoms and results in electrical energy being
converted into heat. However resistance does
not introduce any phase shift between voltage
and current. The rate of energy loss called
“power loss” is equal to the resistance times
the square of the rms current.
Reactance
Voltages and currents create electric and
magnetic fields respectively in which energy is
stored. Reactance is a measure of the impedi-
ment to the flow of power caused by the
creation of these fields. When the voltage and
current are ac this alternating storage and
retrieval of energy retards the flow of power but
no energy is lost. When energy is stored in
magnetic fields the element is said to have
“inductive reactance ” while “capacitive reactance”
describes elements creating energy stored in
electric fields. Reactance is a function of
frequency—inductive reactance increases with
frequency while capacitive reactance decreases.
The presence of reactance in a system also
creates a phase shift between voltage and
current —inductive reactance causes the current
to lag the voltage a negative phase shift while
capacitive reactance forces the current to lead
the voltage a positive phase shift. One way to
visualize this is that the current is “busy”
storing energy in a magnetic field as the voltage
proceeds while the voltage is “busy” storing it
in an electric field as the current proceeds.
The impedance of a transmission line is
primarily comprised of inductive reactance.
Therefore its current will be out of phase with
and lag its voltage which is undesirable for
reasons discussed later. T o compensate for this
elements with capacitive reactance capacitors
are connected to the transmission line. The
positive phase shift caused by these capacitors
cancels out the negative shift due to the inductive
iv
Synchronized systems are at the same frequency and have a specific phase difference between their
voltages.
slide 4: 246 MIT STUDY ON THE FUTURE OF THE ELECTRIC GRID
reactance of the transmission line and forces
the transmission voltage and current to be in
phase a good thing. This process is called
“line compensation.”
The inductive reactance of a transmission line
is proportional to both frequency and line
length and for long ac lines the inductive
reactance limits the amount of power the line
can carry. At zero frequency dc the reactance
is zero making dc attractive for long-distance
transmission.
Power
Power is the rate at which energy is flowing or
work is being done.
v
Since voltage is the amount
of work done for each unit of charge that flows
and current is the rate of flow of charge the
product of voltage and current is the rate of
work—power or more precisely instantaneous
power. Since power loss is equal to the resistance
of a conductor times the square of the current
loss in a transmission line can be reduced by
increasing the transmission voltage which allows
the current to be reduced for the same amount of
power transmitted. As a result long transmission
lines employ high voltage. However as discussed
later high-voltage lines also have drawbacks
including the need to maintain larger clearances
to maintain safety.
In ac systems where voltage and current oscillate
many times a second the instantaneous power
they produce is also rapidly varying as shown in
Figure B.2. In the figure negative instantaneous
power is equivalent to power flowing in the
backwards direction. In electric power systems it
is more valuable to have measures of power that
are averages over many cycles. These measures
are real power reactive power and apparent
power. Only two of these three measures are
independent apparent power can be determined
from real power and reactive power.
Real Power
Real power also called “active power” or
“average power” is the average value of instan-
taneous power as shown in Figure B.2 and is
power that actually does work. It is measured
in watts. Although instantaneous power can
be flowing in both directions real power
only flows in one direction as shown in
Figure B.2a–c. Real power is zero if the
phase difference between voltage and current
is 90 degrees as shown in Figure B.2d.
Reactive Power
If the voltage and current waveforms are “in
phase”—that is they cross zero at the same
time—then instantaneous power although
varying is always positive or flowing in one
direction Figure B.2b. In this case all the
power is real power. However if one waveform
is shifted in time relative to the other a condi-
tion called “out of phase” then power takes on
both positive and negative values as shown in
Figure B.2a c and d. This phase differ-
ence can arise for example because of the
reactance of the transmission line. Here in
addition to the real power that is flowing in one
direction there is back and forth movement of
power called “reactive power.” While it does no
useful work reactive power flow still causes
power losses in the system because current is
flowing through components such as trans-
formers and transmission lines which have
resistance. Reactive power is measured in
volt-amperes reactive V AR.
Reactive power can be positive or negative. But
unlike instantaneous power its sign does not
indicate the direction of reactive power flow.
Instead the sign simply indicates the relative
phase shift between current and voltage. When
current lags voltage due to the presence of
inductive reactance reactive power is positive
as shown in Figure B.2a when current leads
voltage due to the presence of capacitive
v
It is energy that actually “flows” in a power system power being the rate of this energy flow. However
though technically incorrect common usage is to speak of “power flow.”
slide 5: Appendix B 247
Figure B.2 Current Voltage and Power in an Ac System
instantaneous power
real power
reactive power
apparent power
0
voltage current
a Current Lags Voltage
time
reactive power
real power
apparent power
instantaneous power
time
b Current and Voltage In-Phase
voltage current
reactive power
real power
apparent power
instantaneous power
d Current and Voltage
Out-of-Phase by 90 Degrees
voltage current
c Current Leads Voltage
voltage current
real power
reactive power
apparent power
0
0
0
time time
instantaneous power
reactance reactive power is negative as shown
in Figure B.2c. Equipment that draws nega-
tive reactive power is often said to be “supply-
ing” reactive power. In power systems capacitors
are often connected near large inductive loads
to compensate for their positive reactive power.
Apparent Power
Apparent power is the product of rms voltage
and rms current and is always greater than or
equal to real and reactive power. Electrical
equipment such as transformers and transmis-
sion lines must be thermally rated for the
apparent power they process. Apparent power
is measured in volt amperes. The ratio of real
power to apparent power is called “power
factor.” Utilities like to maintain a unity power
factor as it implies that all of the power that is
flowing is doing useful work.
B.3 STRUCTURE OF THE ELECTRIC POWER
SYSTEM
The electric power system consists of generat-
ing units where primary energy is converted
into electric power transmission and distribu-
tion networks that transport this power and
consumers’ equipment also called “loads”
where power is used. While originally genera-
tion transport and consumption of electric
power were local to relatively small geographic
regions today these regional systems are
connected together by high-voltage transmis-
sion lines to form highly interconnected and
complex systems that span wide areas. This
interconnection allows economies of scale
better utilization of the most economical
slide 6: 248 MIT STUDY ON THE FUTURE OF THE ELECTRIC GRID
Figure B.3 Structure of the Electric Power System
Generating
Unit
Transformer
Substation
Transmission Network
Distribution Network
Industrial Load
Commercial Load
Residential Load
generators increased reliability and an
improved ratio of average load to peak load
due to load diversity thus increasing capacity
utilization. Interconnection also leads to
complexity however as any disturbance in one
part of the system can adversely impact the
entire system. Figure B.3 illustrates the basic
structure of the electric power system. We
discuss each of its subsystems next.
Generation
Electric power is produced by generating units
housed in power plants which convert primary
energy into electric energy. Primary energy
comes from a number of sources such as fossil
fuel and nuclear hydro wind and solar power.
The process used to convert this energy into
electric energy depends on the design of the
generating unit which is partly dictated by the
source of primary energy.
The term “thermal generation” commonly
refers to generating units that burn fuel to
convert chemical energy into thermal energy
which is then used to produce high-pressure
steam. This steam then flows and drives the
mechanical shaft of an ac electric generator
that produces alternating voltage and current
or electric power at its terminals. These genera-
tors have three terminals and produce three
ac voltages one at each terminal which are
120 degrees out of phase with respect to each
other as shown in Figure B.4a. This set of
voltages is known as “three-phase ac voltage”
whereas the voltage discussed in the previous
section and illustrated in Figure B.1 is known
as “single-phase ac voltage.” Three-phase ac
has multiple advantages over single-phase ac
including requiring less conducting material in
the transmission lines and allowing the total
instantaneous power flowing from the genera-
tor to be constant Figure B.4b.
slide 7: Appendix B 249
Figure B.4 Three-Phase System
a Voltage
phase 1 phase 2 phase 3
b Instantaneous Power
total
phase 3 phase 2 phase 1
0
0
Nuclear generating units use an energy conver-
sion process similar to thermal units except the
thermal energy needed to produce steam comes
from nuclear reactions. Hydro and wind
generating units convert the kinetic energy of
water and wind respectively directly into
rotation of the electric generator’s mechanical
shaft. Solar-thermal and geothermal generating
units use the sun’s radiation and the Earth’s
warmth respectively to heat a fluid and then
follow a conversion process similar to thermal
units. Solar photovoltaic generating units are
quite different and convert the energy in solar
radiation directly into electrical energy. Another
common type of generating unit is the gas or
combustion turbine. These burn a pressurized
mixture of natural gas and air in a jet engine
that drives the electric generator. Combined-
cycle gas turbine plants have a gas turbine and
a steam turbine. They reuse the waste heat from
the gas turbine to generate steam for the steam
turbine and hence achieve higher energy
conversion efficiencies.
vi
From the operational perspective of the electric
power system generating units are classified
into three categories: baseload intermediate
and peaking units. Baseload units are used to
meet the constant or base power needs of the
system. They run continuously throughout the
year except when they have to be shut down for
repair and maintenance. Therefore they must
be reliable and economical to operate. Because
of their low fuel costs nuclear and coal plants
are generally used as baseload units as are
run-of-the-river hydroelectric plants. However
nuclear and coal baseload units are expensive to
build and have slow ramp rates—that is their
output power can be changed only slowly on
the order of hours.
Intermediate units also called cycling units
operate for extended periods of time but
unlike baseload units not at one power con-
tinuously. They have the ability to vary their
output more quickly than baseload units.
Combined-cycle gas turbine plants and older
thermal generating units generally are used as
intermediate units.
Peaking units operate only when the system
power demand is close to its peak. They have to
be able to start and stop quickly but they run
only for a small number of hours in a year. Gas
vi
Combined-cycle plants can have efficiencies in the 55–60 range compared to about 40 for
conventional thermal plants.
slide 8: 250 MIT STUDY ON THE FUTURE OF THE ELECTRIC GRID
turbine and hydroelectric plants with reservoirs
are generally used as peaking units. Gas tur-
bines are the least expensive to build but have
high operating costs.
Large generating units generally are located
outside densely populated areas and the power
they produce has to be transported to load
centers. They produce three-phase ac voltage at
the level of a few to a few tens of kV . T o reduce
power losses during onward transmission
this voltage is immediately converted to
a few hundred kV using a transformer. All
the generators on a single ac system are
synchronized.
In addition to the main large generating units
the system typically also has some distributed
generation including combined heat and power
units. These and other small generating units
such as small hydroelectric plants generally
operate at lower voltages and are connected at
the distribution system level. Small generating
units such as solar photovoltaic arrays may be
single-phase.
Transmission
The transmission system carries electric power
over long distances from the generating units to
the distribution system. The transmission
network is composed of power lines and
stations/substations. Transmission system
power lines with rare exceptions are attached
to high towers. However in cities where real
estate is valuable transmission lines are some-
times made up of insulated cables buried
underground. Stations and substations house
transformers switchgear measurement instru-
mentation and communication equipment.
Transformers are used to change the level of the
transmission voltage. Switchgear includes
circuit breakers and other types of switches
used to disconnect parts of the transmission
network for system protection or maintenance.
Measurement instrumentation collects voltage
current and power data for monitoring control
and metering purposes. Communication
equipment transmits these data to control
centers and also allows switchgear to be con-
trolled remotely.
Since transmission networks carry power over
long distances the voltage at which they
transmit power is high to reduce transmission
losses limit conductor cross-sectional area and
require narrower rights-of-way for a given
power. However to maintain safety high
transmission voltages require good insulation
and large clearance from the ground trees and
any structures. Transmission voltages vary from
region to region and country to country. The
transmission voltages commonly but not
exclusively used in the U.S. are 138 kV 230 kV
345 kV 500 kV and 765 kV .
3
A voltage of 1000
kV has been used on a transmission line in
China. Although most transmission is three-
phase ac for very-long-distance transmission
HVDC can be beneficial because transmission
lines present no reactive impedance to dc.
HVDC also only requires two conductors
instead of three. However HVDC transmission
lines require expensive converter stations
utilizing power electronics technology at
either end of the line to connect to the rest of
the ac system.
Transformers at transmission substations
convert transmission voltages down to lower
levels to connect to the subtransmission
network or directly to the distribution network.
Subtransmission carries power over shorter
distances than transmission and is typically
used to connect the transmission network to
multiple nearby relatively small distribution
networks. In the U.S. the commonly used
subtransmission voltages are 69 kV and 115 kV .
slide 9: Appendix B 251
T opologically the transmission and subtrans-
mission line configurations are mesh networks
as opposed to radial meaning there are
multiple paths between any two points on the
network. This redundancy allows the system to
provide power to the loads even when a trans-
mission line or a generating unit goes offline.
Because of these multiple routes however the
power flow path cannot be specified at will.
Instead power flows along all paths from the
generating unit to the load. The power flow
through a particular transmission line depends
on the line’s impedance and the amplitude and
phase of the voltages at its ends
vii
as discussed
in Box B.1. Predicting these flows requires
substantial computing power and precise
knowledge of network voltages and impedances
which are rarely known with high precision.
Hence precise prediction of the power flowing
down a particular transmission line is difficult.
The presence of multiple paths between genera-
tion and load in the transmission network also
leads to flows on undesirable paths. These
undesirable flows are known as “loop flows. ”
The power that can be transmitted on a trans-
mission line is limited by either thermal voltage
stability or transient stability constraints
depending on which is the most binding as
illustrated in Figure 2.4 in Chapter 2.
viii 4
The
thermal constraint arises due to the resistance
of the transmission line that causes excessive
power losses and hence heating of the line
when the power flowing through it exceeds a
certain level. The voltage stability constraint
arises due to the reactance of a transmission
line that causes the voltage at the far end of the
line to drop below an allowable level typically
95 of the nominal design voltage level when
the power flowing through the line exceeds a
certain level. The transient stability constraint
relates to the ability of the transmission line to
deal with rapid changes in the power flowing
through it without causing the generators to
fall out of synchronism with each other.
Generally maximum power flow on short
transmission lines is limited by thermal con-
straints while power flow on longer transmis-
sion lines is limited by either voltage or
transient stability constraints. These power
flow constraints cause so-called congestion on
transmission lines when the excess capacity
in the lowest-cost generating units cannot be
supplied to loads due to the limited capacity
of one or more transmission lines.
Some very large consumers take electric power
directly from the transmission or subtransmission
network. However the majority of consumers get
their power from the distribution network.
Distribution
Distribution networks carry power the last few
miles from transmission or subtransmission to
consumers. Power is carried in distribution
networks through wires either on poles or in
many urban areas underground. Distribution
networks are distinguished from transmission
networks by their voltage level and topology.
Lower voltages are used in distribution net-
works as lower voltages require less clearance.
Typically lines up to 35 kV are considered part
of the distribution network.
The connection between distribution networks
and transmission or subtransmission occurs at
distribution substations. Distribution substa-
tions have transformers to step voltage down to
the primary distribution level typically in the
4 to 35 kV range in the U.S.. Like transmission
substations distribution substations also have
circuit breakers and monitoring equipment.
However distribution substations are generally
less automated than transmission substations.
vii
The power flow through a transmission line is roughly proportional to the phase difference between the
voltages at its ends and inversely proportional to its impedance.
viii
Power system stability limits also are discussed in Box 2.3 in Chapter 2.
slide 10: 252 MIT STUDY ON THE FUTURE OF THE ELECTRIC GRID
BOX B.1 CONTROLLING POWER FLOW
Two factors determine power ow: the imped-
ance of a line and the di erence in the instanta-
neous voltages at its two ends. Impedance is
the combination of resistance and reactance.
Resistance accounts for energy that is lost as
heat in the line. It is analogous to the physical
resistance exerted by water on a swimmer or
wind on a cyclist. Energy lost in this way can
never be recovered. Reactance accounts for
energy associated with the electric and mag-
netic elds around the line. This energy is
analogous to the potential energy stored when
riding a bicycle up a hill. It is recovered in the
ideal case when going down the other side. In
an alternating current ac line in the U.S. this
energy is stored and recovered 120 times per
second and thus is quite di erent from the
behavior of energy stored in devices such as
batteries. The resistance of a line is determined
by the material properties length and cross-
section of the conductor while reactance is
determined by geometric properties the position
of conductors relative to each other and ground.
In practical transmission lines resistance is small
compared to reactance and thus reactance has
more inuence on power ow than resistance.
As a function of time the voltages at the ends
of a transmission line are sinusoidal in shape.
In the gure below the two sinusoids represent
voltages at opposite ends of a line. When there
is power ow the instantaneous values of
voltage at the two ends of the line are di erent
as shown by the di erence in voltages V
1
and
V
2
at time t in the gure. This instantaneous
di erence is a function of the di erence in
phase angle between the two sinusoids. The
phase angle di erence is shown in the gure
as . If the two voltages are in phase that is
if 0 then there will be no di erence in their
instantaneous values.
The power ow on a line varies directly with the
phase angle di erence or more precisely the
sine of the phase angle di erence and inversely
with the line’s impedance. Except in very special
cases in which devices are used to control
power ow on individual lines the ow of power
in a line is dicult to control when the line is
part of an interconnected network since the
characteristics of the entire network collectively
determine power ows. When special devices
are used to control power ow they do so by
modifying impedance and phase angle.
Phase Angle Di erence of Voltage Sinusoids at the Ends of a Transmission Line
V
2
V
1
Voltage
Time
t
slide 11: Appendix B 253
Primary distribution lines leaving distribution
substations are called “feeders.” They also carry
three-phase ac voltage which is why one sees
three wires on many poles in rural and subur-
ban areas. These individual phases are then
separated and feed different neighborhoods.
Distribution networks usually have a radial
topology referred to as a “star network” with
only one power flow path between the distribu-
tion substation and a particular load. Distribu-
tion networks sometimes have a ring or loop
topology with two power flow paths between
the distribution substation and the load.
However these are still operated as star net-
works by keeping a circuit breaker open. In
highly dense urban settings distribution
networks also may have a mesh network
topology which may be operated as an active
mesh network or a star network. The presence
of multiple power flow paths in ring and mesh
distribution networks allows a load to be
serviced through an alternate path by opening
and closing appropriate circuit breakers when
there is a problem in the original path. When
this process is carried out automatically it is
often referred to as “self-healing.” Distribution
networks usually are designed assuming power
flow is in one direction. However the addition
of large amounts of distributed generation may
make this assumption questionable and require
changes in design practices.
Industrial and large commercial users usually
get three-phase supply directly from the
primary distribution feeder as they have their
own transformers and in certain cases can
directly utilize the higher voltages. However
for the remaining consumers who generally
require only single-phase power power is
usually transmitted for the last half-mile or
so over lateral feeders that carry one phase.
A distribution transformer typically mounted
on a pole or located underground near the
customer steps this voltage down to the
secondary distribution level which is safe
enough for use by general consumers. Most
residential power consumption in the U.S.
occurs at 120 V or 240 V . In suburban neigh-
borhoods one distribution transformer serves
several houses.
Consumption
Electricity is consumed by a wide variety of
loads including lights heaters electronic
equipment household appliances and motors
that drive fans pumps and compressors.
These loads can be classified based on their
impedance which can be resistive reactive
or a combination of the two. In theory loads
can be purely reactive and their reactance can
be either inductive or capacitive. However in
practice the impedance of most loads is either
purely resistive or a combination of resistive and
inductive reactance. Heaters and incandescent
lamps have purely resistive impedance while
motors have impedance that is resistive and
inductive. Purely resistive loads only consume
real power. Loads with inductive impedance also
draw reactive power. Loads with capacitive
impedance supply reactive power.
Because of the abundance of motors connected
to the network the power system is dominated
by inductive loads. Hence generating units have
to supply both real and reactive power. Since
capacitors produce reactive power they often
are connected close to large inductive loads to
cancel their reactive power i.e. increase the
effective power factor of the load and reduce
the burden on the network and the generators.
From the power system’s operational perspec-
tive the aggregate power demand of the loads
in a region is more important than the power
consumption of individual loads. This aggre-
gate load is continuously varying. A useful
representation of this load across the year is the
load duration curve which plots the load for
each hour of the year not chronologically but
instead by beginning with the hour with the
slide 12: 254 MIT STUDY ON THE FUTURE OF THE ELECTRIC GRID
largest load and continuing in a monotonically
decreasing fashion as shown in Figure B.5. For
each point on this curve the horizontal coordi-
nate is the number of hours in the year for
which the load is above the power given by the
vertical coordinate. The load duration curve
provides a good picture of how widely the load
varies and for how many hours in a year it is
above a particular level. It is more expensive to
meet the needs of a spiked load duration curve
than a flat one as generation capacity to meet
the peak load is needed while the generation’s
utilization is related to the average load. One
useful metric of power consumption is the load
factor which is the ratio of average to peak load.
B.4 OPERATION OF THE ELECTRIC
POWER SYSTEM
The electric power system is operated through a
combination of automated control and actions
that require direct human system operator
intervention. The main challenge in operating
the electric power system is that there is negli-
gible “electrical” storage in the system.
ix
Hence
supply and consumption of electrical power
must be balanced at all times. Since the load is
changing all the time in ways that cannot be
perfectly predicted generation must follow the
load in real time. The balance between supply
and demand is maintained using a hierarchical
control scheme with crude matching at the
longer timescale and finer matching at the
shortest timescale see Figure 2.1 in Chapter 2.
5
Protection
An important aspect of the operation of the
electric power system is protection. This means
ensuring the safety of the system including
generating units and other grid assets and the
people who may come in contact with the
system. Protective action must be taken in
fractions of a second to avoid equipment
damage and human injury. Protection is
achieved using sensing equipment as well as
circuit breakers and other types of switches that
can disconnect and de-energize parts of the
system in the case of a fault such as a damaged
transmission line or a short circuit. Once the
fault is repaired that segment of the system can
be brought back online.
Figure B.5 A Load Duration Curve
Power Gigawatts
8760
0
0
10
Time hours
ix
Note that pumped storage which uses electricity to pump water into an elevated reservoir and stores energy
in the form of potential energy is not a form of electrical storage. A hydroelectric generating unit must be
run to convert this energy back into electrical form. Energy storage technologies are discussed in Chapter 3.
slide 13: Appendix B 255
Proactive planning for contingencies also
protects the electric power system. Computers
are regularly calculating system power flows
and voltages under various possible contingen-
cies for example the failure of a large generator
or transmission line to identify the best
corrective action to take in each case.
Real-time Operation
The objective of real-time operation of the
electric power system is to ensure that the system
remains stable and protected while meeting end
user power requirements. This requires a precise
balance between power generation and con-
sumption at all times. If this balance is not
maintained the system can become unstable—
its voltage and frequency can exceed allowable
bounds—and result in damaged equipment as
well as blackouts. If the balance is not restored
sufficiently quickly a local blackout can grow
into a cascading blackout similar to the ones in
the U.S. in 1965 and 2003. Fortunately the
stored kinetic energy associated with the inertia
of generators and motors connected to the
system helps overcome small imbalances in
power and this “ride-through” capability gives
enough time for an active control system to take
corrective action. The balance between supply
and demand at the shortest timescale is main-
tained actively via governor control.
Governor Control
As the load and/or generation changes altering
the balance between demand and supply the
generators on governor control take the first
corrective action. The governor is a device that
controls the mechanical power driving the
generator via the valve limiting the amount of
steam water or gas flowing to the turbine. The
governor acts in response to locally measured
changes in the generator’s output frequency
from the established system standard which is
60 Hz in the U.S.
x
If the electrical load on the generator is greater
than the mechanical power driving it the
generator maintains power balance by convert-
ing some of its kinetic energy into extra output
power—but slows down in the process. On the
other hand if the electrical load is less than the
mechanical power driving the generator the
generator absorbs the extra energy as kinetic
energy and speeds up. This behavior is known
as “inertial response.” The frequency of the ac
voltage produced by the generator is propor-
tional to its rotational speed. Therefore changes
in generator rotational speed are tracked by the
generator’s output frequency. A decreasing
frequency is an indication of real power con-
sumption being greater than generation while
an increasing frequency indicates generation
exceeding power consumption. Any changes in
frequency are sensed within a fraction of a
second and the governor responds within
seconds by altering the position of the valve—
increasing or reducing the flow to the turbine.
If the frequency is decreasing the valve will be
opened further to increase the flow and provide
more mechanical power to the turbine hence
increasing the generator’s output power
bringing demand and supply in balance and
stabilizing the speed of the generator at this
reduced level. The speed of the generator will
stay constant at this level as long as the mechani-
cal power driving it balances its electrical load.
While very fast for stability reasons governor
control is not designed to bring the frequency of
the generator back to exactly 60 Hz. Correcting
this error in frequency is the job of the slower
automatic generation control AGC discussed
later in this section.
V oltage Control
Just as an imbalance in supply and demand of
real power causes a change in system frequency
an imbalance in supply and demand of reactive
power causes a change in system voltages. If the
reactive power consumed by the load increases
x
The generator’s output frequency is proportional to its rotational speed and traditionally governors have
been designed to sense this speed.
slide 14: 256 MIT STUDY ON THE FUTURE OF THE ELECTRIC GRID
xi
From an operational perspective a large electric power system is divided into multiple control areas also
called “balancing authority areas.” These control areas are connected together via transmission lines that
are called “tie-lines. ”
without a commensurate increase in reactive
power supply the output voltage of the genera-
tor will decrease. Conversely the output voltage
of the generator will increase if the generator is
supplying more reactive power than is being
drawn. The voltage can be restored to its
original level by either adjusting the generator’s
rotor current which controls the amount of
reactive power produced by the generator or
by using ancillary voltage support equipment
such as static V AR compensators that employ
inductors and capacitors in conjunction with
semiconductor switches to absorb or supply the
imbalance in reactive power. Voltage control is
also extremely fast.
Automatic Generation Control
While governor control brings supply of and
demand for real power in balance it results in a
small change in system frequency. Furthermore
governor-based reaction of generators located
outside a control area to load changes inside the
control area or vice versa can alter power
flows between control areas from their sched-
uled levels.
xi
The errors in frequency and flows
between control areas are corrected by the
relatively slower AGC. AGC aims to eliminate
the area control error ACE. ACE is a measure
of both the difference between actual and
scheduled net power flows to or from a control
area and the error in system frequency. Ignor-
ing the effect of system frequency a positive
ACE means that generation within the area
exceeds load by more than the scheduled net
power flow from the control area. In this case
the generation in the control area needs to be
reduced. Conversely negative ACE requires
local generation to be increased. The area
control center automatically sends signals to
generators equipped with AGC to increase or
decrease their output. In exceptional circum-
stances when the required change in output is
greater than the defined limit of AGC the
system operator can call the generation opera-
tor over the phone and ask for an increase or
decrease in output.
Reserves
Beyond a certain level of power imbalance
system operators need to call in generation
reserves. These may be additional generating
units that are on standby or generators that are
already producing power but can ramp up their
output on request. Having adequate reserves on
the system is essential to deal with load uncer-
tainties and contingencies such as the failure of
a generating unit.
Reserves are categorized based on the time it
takes them to start delivering the requested
power typical categories are 10-minute and
30-minute reserves. Reserves can be either
spinning or non-spinning. Spinning reserves
are generating units with turbines spinning in
synchronicity with the grid’s frequency without
supplying power. They can deliver the requested
power within a few minutes. Non-spinning
reserves are units that are offline but also can be
synchronized with the grid quickly. In systems
with organized markets reserves are paid not
only for the energy they produce but also for
being available on short notice to deliver
reserve power.
Other Power Balancing Options
Large customers in some regions often face
real-time pricing which induces them to cut
loads when the system is under stress and the
real-time incremental cost of supplying power
is accordingly high. However when all other
options for balancing power have been
exhausted the system operator must resort to
proactively reducing the load generally referred
to as load shedding. Load shedding can be
accomplished in a number ways. At first the
system operator can interrupt power to those
slide 15: Appendix B 257
loads with which they have contracts that
permit this. Alternatively the system operator
can order voltage reductions also known as
brownouts. Many loads such as heaters
incandescent lamps and certain types of
motors consume less power and do less work
when operated on a lower voltage. Hence by
reducing the voltage supplied to the loads the
total system power consumption can be
reduced. If neither method achieves the desired
reduction in load the system operator can initi-
ate rotating blackouts. In rotating blackouts
groups of consumers are disconnected one at
a time in a rotating fashion for a certain fixed
duration typically one hour. This disconnec-
tion is typically carried out by opening switches
at the distribution substations.
Scheduling
Scheduling determines which generating units
should operate and at what power level and it
is accomplished on a predetermined fixed time
interval. The objective is to minimize cost
subject to generation and transmission con-
straints. Scheduling consists of economic
dispatch and unit commitment each covering
two overlapping time ranges.
Economic Dispatch
The incremental production costs of generating
units can be quite different from one another
mostly due to differences in the costs of their
“fuel” for example uranium coal natural gas
and their efficiencies. Economic dispatch
minimizes overall production costs by optimally
allocating projected demand to generating
units that are online. Computers at control
centers run optimization algorithms typically
every 5 or 10 minutes to determine the
dispatch for the next hour and send these
economic dispatch signals to all the generators.
Sometimes power cannot be dispatched from
the lowest-cost generating unit due to physical
limits of the system or security constraints
associated with maintaining secure operation
under contingencies. Physical restrictions
include transmission lines’ thermal and stability
constraints and limitations on generating
units’ output power and ramp rates. Security
constraints include transmission line reserve
capacity and generation reserve requirements.
Economic dispatch optimization subject to
security constraints is known as “security-
constrained economic dispatch.”
Unit Commitment
In addition to determining the amount of
power each generating unit should be produc-
ing when it is online system operators must
also determine when each generating unit
should start up and shut down. This function is
known as “unit commitment.” Although
significant costs are associated with the startup
and shutdown of generating units it is not
practical to keep all of them online all the time.
There are large fixed costs associated with
running generating units and some units have
a minimum power they must produce when
they are online. Unit commitment determines
the economically optimal time when generating
units should start up and shut down and how
much power they should produce while they
are online. This optimization is more complex
and time consuming than economic dispatch.
Unit commitment is typically done one day
ahead and covers dispatch for periods ranging
from one to seven days.
slide 16: 258 MIT STUDY ON THE FUTURE OF THE ELECTRIC GRID
B.5 WHOLESALE ELECTRICITY MARKETS
The organizational structure of the electric
power industry has changed significantly over
the last 15 years as discussed in Chapter 1.
Until the mid-1990s the electric power indus-
try in the U.S. mostly was vertically integrated:
a single entity a regulated monopoly owned
and operated generation transmission and
distribution in each region.
xii
However in 1996
the Federal Energy Regulatory Commission
issued Order No. 888 which required that the
transmission network be made available for use
by any generator. Since then independent
system operators ISOs and regional transmis-
sion organizations RTOs have been created
in certain parts of the US. In many regions
ownership of generation and transmission have
been separated. In regions where they exist
ISOs and RTOs coordinate organized wholesale
electricity markets in which independent
decisions of market participants those who
buy and sell energy or other electricity market
products such as spinning reserves set the
price of energy generation respecting the
requirements of central coordination provided
by the ISO or RTO.
The theory of spot pricing provides the
foundations for successful market design.
6
In a framework known as “bid-based security-
constrained economic dispatch” central
coordination by the system operator is
integrated with decentralized decisions by
market participants. The process of selling
wholesale energy begins with a bidding process
whereby generators offer an amount of energy
for sale during specific periods of the day next
day at a specific price. These offers are arranged
by the ISO/RTO in ascending order called the
“bid stack” and the generators are dispatched
told to generate in this order until generation
matches expected load. Large loads also
sometimes submit bids for the purchase of
energy in the market. All the dispatched
generators receive the same compensation
called the “clearing price”—the offer of the
last generator dispatched. The actual process is
more complicated than this simple explanation
incorporating such parameters as the time
required to start generators out-of-economic-
order dispatch due to congestion or reliability
concerns and security constraints. The goal of
the system operator is to determine the dispatch
that minimizes total cost as measured by
generators’ bids subject to security constraints.
This process determines the marginal cost of
meeting an increment of load at each location
called a “node” in the transmission system to
which load or generation is connected. These
costs are termed “locational marginal prices”
LMPs and are the prices at which transactions
for purchasing or selling energy in the market
take place. Distribution companies or large
customers pay the applicable LMP for energy
consumed. Similarly generation is paid the
LMP at the point at which it is located.
The LMP pricing structure used in modern
markets ensures that the profitable choice for
generators and loads is to follow the instructions
of the economic dispatch. Generators are only
dispatched when their offer to sell is at a price no
greater than the market-clearing price at their
location. Likewise generators are not dispatched
when the market price is less than their offer to
sell. The use of LMPs allows for the preservation
of the traditional industry approach of security-
constrained economic dispatch in the presence
of independent system operators and organized
wholesale markets. The use of LMPs exploits
the natural definition of an efficient equilibrium
for a market utilizes the unavoidable central
coordination and avoids the need for market
participants to track transmission flows or
understand the many constraints and require-
ments of the power system.
xii
The exceptions were small municipal and cooperative entities that were distribution-only operations and
particularly from the 1930s on federal systems such as the T ennessee Valley Authority.
slide 17: Appendix B 259
B.6 POWER SYSTEM PLANNING
Construction of new generating units and
transmission lines requires large investments and
significant time ranging from a few years to a
decade. Hence planning of electrical power
system expansion requires careful analysis that
relies on long-term demand forecasts of 10 to 20
years. Projecting demand accurately over the
long term is challenging and requires consider-
ation of a number of factors including estimates
of population growth historic individual
consumption patterns and projected economic
growth. Long-term demand forecasts also may
incorporate the projected impacts of new energy
conservation and demand response programs.
In regions served by vertically integrated utilities
generation and transmission expansion planning
is carried out centrally by system planners at the
utilities. Planners evaluate various options for
meeting future load demand in terms of capital
and operating costs. They select projects based
on minimizing system cost while providing
adequately reliable service. Decisions also may be
influenced by government incentives regula-
tions and environmental impact restrictions.
Planning has to allow for the risk associated with
the significant uncertainty in long-term load
forecasts future operating costs directly related
to fuel prices and technological changes.
In regions with organized wholesale markets
expansion planning is split between ISOs/RTOs
and the individual market players. Generation
planning is decentralized and primarily accom-
plished by individual generation companies
based on forecasts and system needs from the
RTO/ISO. T ransmission planning is still mostly
centralized and coordinated by ISOs/RTOs.
While the precise mechanism by which expan-
sion projects are selected depends on market
design details individual company decisions are
based on maximizing return on investment.
However the competitive nature of the market is
expected to lead to an overall system cost
minimization while providing stronger incen-
tives for operating efficiencies.
An added complexity in planning future trans-
mission expansion in areas with organized
markets is the uncertainty associated with future
generation investments. T ransmission expansion
decisions are more challenging for ISOs/RTOs
because development of generating plants is
based on individual company decisions. As a
result the ISOs/RTOs cannot know the location
and size of these future plants with certainty.
slide 18: 260 MIT STUDY ON THE FUTURE OF THE ELECTRIC GRID
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U.S. Energy Information Administration
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W. Steinhurst “The Electric Industry at a Glance”
Silver Spring MD: National Regulatory Research
Institute 2008.
3
S. W. Blume Electric Power System Basics: For the
Nonelectrical Professional Hoboken NJ: Wiley–
IEEE Press 2007.
4
A. V . Meier Electric Power Systems: A Conceptual
Introduction Hoboken NJ: Wiley–IEEE Press
2006.
5
I. J. Pérez-Arriaga H. Rudnick and M. Rivier
“Electric Energy Systems. An Overview” in Electric
Energy Systems: Analysis and Operation eds.
A. Gomez-Exposito A. J. Conejo and C. Canizares
Boca Raton FL: CRC Press 2009 60.
6
F. Schweppe M. C. Caramanis R. D. Tabors and
R. E. Bohn Spot Pricing of Electricity Boston MA:
Kluwer Academic Publishers 1988.