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In practice, do transmission lines ever directly connect two electrical generators to each other? Or is it more common for two generators to be connected indirectly through a substation? In the IEEE test systems, this seems rare, so I was wondering if the test systems are accurate.

Along these lines, are there any "standard" references which describe the IEEE systems and their limitations?

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First part of the question is not really clear. Every generator has a transformer (substation) that step up the voltage. So, I would say that two generators can be connected through transmission line and at least two transformers at each side.

IEEE systems mostly represents real systems or parts of real systems. The origin of some IEEE systems:

IEEE 9 bus system: is an approximation of the Western System Coordinating Council (WSCC) to an equivalent system.[ref]

IEEE 14 bus system: represents a simple approximation of the American Electric Power system as of February 1962.

IEEE 39 bus system: represents 10-machine New-England Power System.

IEEE 118 bus system: represents a simple approximation of the American Electric Power system (in the U.S. Midwest) as of December 1962.

Some other IEEE systems are synthesized from actual systems but they do not directly represents these systems for example IEEE 96 bus system.

Regarding the "standard": yes, every IEEE system has few applications, you have to look at the original paper/book of this system and see why it is created and where it is implemented. This link provides the references for most of the IEEE systems.

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