Case Analysis: the Early Bird – Electric Power Load Despatching

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Case Analysis: The Early Bird – Electric Power Load Despatching The Early Bird – Electric Power Load Dispatching
Electric utility firms have, for more than two decades, used marginal productmarginal cost concepts to generate and dispatch electric power in a more efficient, lowercost manner. Southern Company, the nation’s third largest utility, refers to its load dispatching method as the “Early Bird” system. Southern’s Early Bird is designed to provide automatic, computerized control of all the company’s power production and transmission facilities. The Early Bird continuously calculates the marginal cost of delivering additional kilowatts of electricity to Southern Company customers anywhere in the company’s service area; then, as electricity demand rises or falls at points throughout the system, Early Bird transmits “raise” or “lower” impulses to the company’s generating units and routes the correct amount of electricity along the most economical transmission path to the end user.

Periodically, Southern Company engineers test the operating efficiency of every piece of power-generating equipment the company has in service. The purpose of the test is to determine how much fuel, labor, and other variable inputs are required to produce electricity with that unit and, subsequently, to calculate a production function for that generating unit. Experience has shown that revised production function equations must be calculated from time to time because normal wear and tear, maintenance problems, and mechanical efficiency vary over time and from generator to generator, depending on who manufactured it, when it was purchased, how long it has been in service, and the reliability with which it has performed. In other words, the production function for a given generating unit shifts by sufficiently large amounts over time to make it worthwhile to update the input-output equation. The equations for the production functions of each generating unit are then fed into Early...
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