14th PSCC, Sevilla, 24-28 June 2002 Session 11, Paper 2, Page 1

Optimal Placement of Distributed Generation

William Rosehart Ed Nowicki
Dept of Electrical & Computer Engineering
University of Calgary
Calgary, AB, Canada
rosehart@ucalgary.ca, nowicki@enel.ucalgary.ca

Abstract - In this paper, two Lagrangian based ap-
proaches are used to determine optimal locations for plac-
ing distributed generators. The approaches are formulated
to consider economic cost and stability limits. The effects of
applying these approaches is analyzed using a 30-bus system,
which is derived from the IEEE 30-bus test system.
Keywords - Distributed Generation, Optimal Power
Flow, Lagrangian Multipliers
1 Introduction
As open access market principles are applied to power
systems, an increased emphasis is being placed on dis-
tributed or dispersed generation. In most large electrical
power systems, including the Alberta Power Pool, most
of the electrical power is generated from large generating
stations. This is typically done because in the past, the
cost to produce bulk quantities of electricity is generally
much less than the cost to produce smaller quantities of
electricity. However with increased electricity costs, and a
growing interest toward environmentally friendly energy
sources, the incorporation of smaller scale, dispersed or
distributed generation in electrical power systems is be-
coming more popular.
(1)
Stability Constrained OPF formulations used in the anal-
ysis. The system model used in the paper is given in Sec-
tion 4. In Section 5, the Pool based OPF formulation used
to model the system is outlined. This OPF formulation is
then extended to a Voltage Stability Constrained OPF for-
mulation in Section 6. In Section 7, the two OPF formu-
lations are applied to a test system. Based on the relative
size of the Lagrangian Multipliers associated with the load
flow constraints, two small generators are added to the test
system. The optimization problems are then repeated to
demonstrate the effect of these distributed generators. Fi-
nally, in Section 8, a summary of the main contributions
of the paper along with a discussion future research direc-
tions is given.
2 Optimal Power Flow
The optimal power flow problem may be described as
a non-linear programming problem in which the “optimal”
solution to the objective function is met, subject to cer-
tain system constraints [3, 4, 5]. OPF problems are gen-
erally formulated as nonlinear programming problems of
the form:


min
 



 






There is currently a great deal of interest in distributed s.t. :
power systems from both an environmental and a public
policy perspective. The current paper proposes two novel 


optimization based approaches to incorporate distributed
generation into existing power systems. An analysis is where

  is the objective function that
performed to examine the effect on the spot prices and typically includes total generator costs (active power dis-
stability of power systems, if distributed generators are


patch) or total losses in the system (reactive power dis-

 
strategically placed in the power system. patch); generally represents the load flow equations;
The paper proposes the use of the Lagrangian multipli-
ers associated with the active and reactive load flow equa-
and

tions to indicate buses where small-scale distributed gen-
eration should be placed. Although, the location of dis-
tributed generators is usually determined by their opera-
tors, location incentives based on the Lagrangian multipli-
ers can be offered. The use of traditional pool based Opti-
mal Power Flow (OPF) and Voltage Stability Constrained
OPF [1, 2] formulations are used to determine generator
locations based on reducing system costs and enhancing
stability.
The paper is structured as follows: In Section 2, a brief
review of the optimal power flow problem is presented. A
review of bifurcation theory and how it can be related to
voltage collapse is given in Section 3. The purpose of this
section is to provide a brief understanding of the Voltage
usually represents transmission line limits, with
lower and upper limits represented by
tively. The vector of system variables, denoted by

and , respec-
,
typically includes voltage magnitudes and phasor angles,
 
generator power levels and transformer tap settings; their
lower and upper limits are given by and , respectively.
In this paper, Interior Point Optimization methods are used
to solve all the proposed optimization problems [5, 6].
3 Voltage Stability and Bifurcation Theory
Several types of stability problems in power systems
can be explained using bifurcation theory [7, 8]. Bifur-
cation points can be defined as equilibrium points where
changes in the “quantity” and/or “quality” of the equilib-
ria associated with a nonlinear set of dynamic equations
14th PSCC, Sevilla, 24-28 June 2002 Session 11, Paper 2, Page 2

occur with respect to slow varying parameters in the sys-

tem [9]. Generally, one can expect to encounter saddle-
 $
&%'()  %*

 %'()  %*+

node bifurcations (SNB) as the bifurcation parameters, , min (3)

change [8]. s.t. : (Load Flow Eqns.)
In power systems, control and/or operational limits -,
 %.# -,
-/ 0-/
 %.#
(Transmission Line Limits)
have been shown to yield bifurcations known as limit-
(Generator Lower Bid Limits)
induced bifurcations (LIBs) [10]. LIBs are also generic
bifurcations, i.e., are typically encountered in power sys-  /
 % #  / (Generator Upper Bid Limits)
tems. For example, when reactive power limits of certain -1
 % (& -1
generators are reached, no local equilibria may exist for % % % (Active Power Reserve Margin)
(Dependent Variable Limits)
increased loading conditions [11, 12] resulting in instabil-
ity.    (Independent Variable Limits)
At the SNB/LIB point, also referred to as the voltage
collapse point, the stability region of the system decreases where the objective function,
$
 % ( )  %   2 
until it becomes zero, resulting in a system collapse due to
lack of equilibria [13]. Thus, a voltage stability margin is 8 3(9 3
defined as the “distance” from the present operating point 53 476 (4)

to the voltage collapse or SNB/LIB point. The system is

assumed to be voltage secure if this margin is reasonably
greater than zero. In practical systems, operators would be
interested in maintaining the system with a given voltage
stability margin, so that small contingencies do not make
the system unstable [7].
4 System Model
Given the definitions of voltage stability used in this
paper, which are based on steady state models of the power
network, a static model of the power system is used. Thus,
the solution to the following set of nonlinear power flow
equations define the system equilibria:
 
    (2)
8
includes the bid price ( ) for energy, which is a con-
stant vector, and the independent variable 9:3 which is the
amount of generation scheduled from generator ; . The
symbol < represents the set of generators in the system.
6 Pool Based OPF with Network Stability
In order to directly incorporate stability limits, a sep-
arate set of equations is defined to represent the system at
the critical or maximum loading point [1, 2]. Using this
approach (3) can be transformed into a “Maximum Dis-
tance to Collapse” problem with constraints incorporated
on the present and critical loading point [1, 2]. This prob-
lem can be written as

 %
where the vector represents the system’s dependent vari-
ables, which are normally non-generator bus voltage mag- max


 % &
 
 
2  >
=   % 
 

(5)
 

 2 (
 2 %  #2  +

nitudes and phasor angles, reactive power levels of non- s.t. :


slack bus generators and real and reactive power levels of
the slack bus generator. The vector represents the inde- 


pendent or controlled variables in the system; in a simple 

 2  2 

 !
system model, this would include generator active power
settings and terminal voltage levels. The variable
is a scalar bifurcation parameter that is typically known
as the “loading factor”, as it represents the loading level in
the system for a linearly increasing, constant power factor,

load model. In this paper, represents only one parameter
instead of several, i.e., the load is assumed to change in
only one known direction, which is a reasonable assump-
#"
tion based on an adequate load forecast at an initial op-
erating point . Although many power system variables
are discrete, in this paper, a strictly continuous model is
used to facilitate the interior point solver. Rounding algo-
rithms can be applied to the final solution for the discrete
variables.
5 Pool Based OPF
The following model is based on using a full AC power
system model in determining generation scheduling for a
pool based electricity market.
where the subscripts ? and @ indicate the present and col-
lapse points, respectively. The inequality constants de-
 2BA 
fined in (3) have been written in a more condensed fash-
ion. Finally,
is used to map the control variables
at the present operating point, defined by , into the col-
lapse point to account for certain system changes. For ex-
ample, generation levels at the present loading point are
mapped to generation levels at the collapse point using a
distributed slack bus.
This problem maximizes the distance to a saddle-node
or limit-induced bifurcation. It is important to highlight
the fact that in (5), the total generation at the critical oper-
ating point, is based on the generation at the present point
and spinning reserve generation. Including the present
loading point into the constraints ensures that, when inde-
pendent variables are calculated to maximize the distance
to voltage collapse, feasibility and inequality constraints
at the present loading point are met [1].
14th PSCC, Sevilla, 24-28 June 2002 Session 11, Paper 2, Page 3

7 Numerical Analysis and DG Placement 1.2

Present Loading Point
Critical Loading Points
1.15
The Market based OPF and VSC-OPF formulations

Bus Voltage Magnitude

are tested on a system derived from the IEEE 30 bus 1.1
test system [14] using the optimization software package
LOQO [6]. In the analysis presented, operational limits 1.05
are placed on all bus voltages, at both the critical and
present loading conditions. Bus voltage limits are en- 1
forced at both the present and collapse point.
0.95
190
0.9
180 0 5 10 15 20 25 30
Bus Number
170 Figure 3: Bus Voltage Magnitudes for the Maximum Distance to Col-
lapse problem.
Lagrangian Multiplier

160

150
In order to also determine which buses have the great-
140
est impact on the stability margin of the system, the Max-
130 imum Distance to Collapse problem, (5), is solved for the
120
30 bus system. A plot of the bus voltages at both the
present and the critical loading point is shown in Figure 3.
110 The greatest reduction in voltage occurs at the higher bus
100 numbers. This indicates that the voltage profile of these
0 5 10 15 20 25 30
Bus Number buses may have a significant effect on the stability margin
Figure 1: Lagrangian Multipliers associated with the active load flow of the system. A lower voltage limit is encountered, at the
equations for the Pool Based OPF formulation. critical loading point, for Bus 30. A plot of the Lagrangian
multipliers associated with the active and reactive power
load flow equations is shown in Figure 4. As can be seen
1.2 from Figure 4, the reactive power flow equations tend to
have a significant effect on the maximum loading level.
1.15 This result was expected [7]. The multipliers give an indi-
cation of financial incentives which can be offered to dis-
Bus Voltage Magnitude

1.1 tributed generation providers to enhance system stability.

These incentives could offset potentially higher initial and
1.05 operating costs of the distributed generation.
4
1
3.5

0.95 3
Lagrangian Multiplier

2.5 Active Power Flow Equations

0.9
0 5 10 15 20 25 30 Reactive Power Flow Equations
Bus Number 2
Figure 2: Bus Voltage Magnitudes for the Pool Based OPF problem.
1.5

Figure 1 is a plot of the magnitude of the Lagrangian 0.5

Multipliers associated with the active power flow equa-
tions for each of the buses. The multipliers give an in- 0
0 5 10 15 20 25 30
dication of the degree to which a particular constraint ef- Bus Number

fects the objective of the problem. For this system, it can
be seen that the active power load flow equations for the
higher bus numbers tend to have a greater effect on the to-
tal operating cost of the system. This indicates that Buses
29 and 30, are logical locations for distributed generation.
Furthermore, the bus voltage magnitudes, shown in Fig-
ure 2, indicates a poor voltage profile for Buses 29 and
30.
Figure 4: Lagrangian Multipliers associated with the active and reactive
load flow equations for the Maximum Distance to Collapse problem.
Based on the analysis of Figures 1-4, two small gener-
ators, rated at 10 and 14 MW, are placed at buses 29 and 30
respectively, to model the installation of distributed gener-
ation. Figure 5 is a plot of the bus voltage magnitudes
obtained if the Pool Based OPF problem is solved with
14th PSCC, Sevilla, 24-28 June 2002 Session 11, Paper 2, Page 4

C
the distributed generators added. The addition of the two 2.5
Active Power Flow Equations
generators has substantially improved the voltage profile. Reactive Power Flow Equations

Lagrangian Multiplier
1.5

1.2

1
1.15
Bus Voltage Magnitude

0.5
1.1

1.05 0
0 5 10 15 20 25 30
Bus Number
1 Figure 7: Lagrangian Multipliers associated with the active and reactive
load flow equations for the Maximum Distance to Collapse problem.
0.95
1.2
Present Loading Point
0.9 Critical Loading Points
0 5 10 15 20 25 30
Bus Number 1.15

Figure 5: Bus Voltage Magnitudes for the Pool Based OPF Problem.
Bus Voltage Magnitude
1.1

1.05

140
0.95
120
0.9
0 5 10 15 20 25 30
100 Bus Number
Lagrangian Multiplier

Figure 8: Bus Voltage Magnitudes for the Maximum Distance to Col-

80 lapse Problem.

60 Active Power Flow Equations

Reactive Power Flow Equations
40
20
0
0 5 10 15 20
Bus Number
Figure 6: Lagrangian Multipliers associated with the active and reactive
load flow equations for the Pool Based OPF Problem.
Figure 6 is a plot of the Lagrangian Multipliers asso-
ciated with the active and reactive load flow equations for
the Pool Based OPF problem with the distributed genera-
tion added to the system. The high multipliers associated
with Buses 29 and 30 are substantially reduced, indicating
the system is improved, where the actual cost of electricity
at the different load buses is now similar. Using the tech-
nique discussed in [15], the spot prices would be very sim-
ilar for all the buses, which is not the case for the original
system. The overall system operating cost of the modified
D7E FHG
system is lower than the original system.
Figure 7 is a plot of the Lagrangian Multipliers as-
sociated with the active and reactive load flow equations
for the maximum distance to collapse problem with the
distributed generators added. With the addition of the new
generating units, Bus 13 now plays a significant role in
25 30 limiting the stability margin. Although, the Lagrangian
multipliers in Figure 7 are high, indicating a need to con-
sider additional distributed generating units around Bus
13, this need is relative to the magnitude of the new sta-
bility margin. If the new stability margin is within reason-
able limits, then there is no economic or stability-based
motivation to invest further resources to enhance stability.
Table 1 lists the maximum loading level, , found for the &I
two maximum distance to collapse test cases considered.
Since the stability margin is now very conservative for the
modified system, the need to consider further action to
enhance stability is not necessary. The improved voltage
profile for the modified system when solving the maxi-
mum distance to collapse problem is shown in Figure 8.
System JI
Original System 1.18 p.u.
Modified System 2.15 p.u.
KML
Table 1: Maximum loading levels, , of the original system and the
modified system, with distributed generators, for the Maximum Distance
14th PSCC, Sevilla, 24-28 June 2002
to Collapse problem.
8 Conclusions
In this paper, a Lagrangian based approach is used
to determine optimal locations for the placement of dis-
tributed generators. Two optimization formulations are
examined; one to determine generator locations based on
minimizing operating/clearing costs and the other based
on enhancing system stability. Results presented in the
paper indicate that the proposed formulations can can be
used to determine buses where the addition of small dis-
tributed generators can greatly enhance the power sys-
tem. Future research will focus on incorporating differ-
ent Voltage Stability Constrained OPF formulations that
consider stability and operating costs simultaneously. Ad-
ditional studies will be done to develop heuristics that de-
termine optimal financial incentives for distributed gener-
ators based on the Lagrangian Multipliers.
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