SYSTEM PLANNING
A Primer on Optimizing
Fleet Operations
The power industry needs a straightforward definition of “fleet optimization”
and a game plan to achieve the promised economic gains of optimizing.
This need has become more urgent because integrating nondispatchable
renewable resources requires more complex optimization strategies. The
bottom-up approach presented here applies well-understood optimiza-
tion principles and techniques that will help power producers minimize
their fleetwide cost of production, independent of the technologies used
to generate electricity.
By Tom Snowdon, Emerson Process Management
If your utility, company, municipality, coop- erative, or government agency owns or op- erates one or more power generating units,
then it has a fleet operating in a market. A vertically integrated utility is in essence a market
unto itself; its interties with other utility grids,
regional transmission organizations (RTOs)
and independent system operators (ISOs) can
be modeled as virtual units in the utility’s fleet.
Each of the competitive wholesale markets run
by RTOs and ISOs in the U.S. is also defined
as a market with a fleet of generating units
competing to supply the demanded energy.
Therefore, a company that owns units in PJM
and in ISO New England has two fleets. In addition, a unit with more than one owner may
be part of many fleets, one for each owner, but
each unit typically competes in only one market. For the purposes of this discussion, please
assume that our demonstration fleet operates
in a single market, such as PJM or MISO.
Heat rate (million Btu/MWh)
1. Characterize the test data. The first step is to characterize the important data used
to define unit performance. In this example, the amount of excess O2 in the boiler furnace
determines the plant heat rate (left) and NOx production (right). Note that it’s impossible to minimize the plant heat rate and NOx emissions at the same furnace excess O2. Source: Emerson
Process Management
10. 5
10. 4
10. 3
10. 2
10. 1
10.0
9. 9
9. 8
9. 7
01 45 1 45
NOx (lb/million Btu
Excess O2 (%)
23
0.51
0.5
0.49
0.48
0.47
0.46
0.45
0.44
0.43
0.42
0
Excess O2 (%)
23
Focus on Lowest Cost
Optimization is the process of minimizing or
maximizing some quantity, given a set of relationships between variables and a set of constraints that must be satisfied. Together, the
set of relationships and the set of constraints
is called an optimization problem. This is
a somewhat theoretical definition, but it is a
very powerful tool. It means that if you are not
seeking to minimize or maximize some quantity, then you are not optimizing. This may
seem to be a silly distinction, but it turns out
to be important in every optimization problem
because of the trade-offs that are inherent in
the set of relationships between variables.
As an example, consider that you can reduce the amount of NOx produced in a boiler’s
furnace by reducing the amount of excess air
used for combustion (Figure 1). As excess air is
reduced, a coal-fired boiler produces more un-
2. Find the incremental cost. The same variables used in Figure 1 can be used to determine the fuel cost (left) and the incremental additional cost of NOx, including the cost of allowances, as a function of excess O2 in the boiler furnace. Source: Emerson Process Managemen
26. 2
4.00
26.0
25. 8
$/MWh
25. 6
25. 4
25. 2
25.0
24. 8
24. 6
24. 4
3.00
01 5
01 5
3.75
$/MWh
3. 50
3. 25
burned carbon in the ash. More unburned carbon in the ash means the heat rate has increased
or the combustion efficiency has decreased.
Therefore, we can tune the combustion to minimize NOx or we can tune the combustion to
minimize unburned carbon, but we can’t minimize both at the same time. Optimization tools
provide us with a methodology to balance competing plant operating practices, such as minimizing NOx and unburned carbon, to achieve
Excess O2 (%)
234
the overall lowest cost to a particular boiler and,
eventually, to the entire fleet of plants.
There are costs associated with creating
NOx in a boiler and unburned carbon in the
ash. Those costs may come from purchasing
or maintaining NOx emission allowances,
buying ammonia for selective catalytic reduction (SCR), or limiting a unit’s power
output to stay under a NOx cap or rate limit
(Figure 2). Quantifying the universe of costs
234
