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Glossary · Energy industry & energy transition

Dispatch

Dispatch power plant dispatch electricity market generation flexibility merit order grid operation

Dispatch refers to the actual operation of generation plants, storage units and controllable loads in the electricity system. It does not mean that a plant exists, nor its long-term contribution to supply. It concerns the concrete operating decision: Which plant feeds in how much electrical power at what time? Which storage unit charges or discharges? Which load is shifted or reduced?

The term comes from the operation and the market of the electricity system. Electricity must be physically balanced at every moment. Feed-in, withdrawal and grid losses must match, because the grid itself can hardly store any electrical energy. Dispatch therefore translates schedules, market bids, technical limits and grid requirements into real feed-in and consumption profiles. European law also uses the term. The Electricity Market Regulation (EU) 2019/943 contains its own rules on the dispatch of generation and demand response, on so-called priority dispatch and on redispatch.

Dispatch, capacity and electricity generation

Dispatch is often confused with installed capacity or electricity generation. Installed capacity indicates the maximum electrical power a plant can provide under certain conditions. It is stated in kilowatts or megawatts. A 100-megawatt gas turbine can technically feed in at this order of magnitude if it is available and receives fuel. Whether it actually runs is a question of dispatch.

Electricity generation, by contrast, is an amount of energy over a period of time, usually stated in kilowatt-hours, megawatt-hours or terawatt-hours. An example: If the 100-megawatt gas turbine runs 500 hours a year at full load, it generates 50,000 megawatt-hours. A smaller plant of 20 megawatts that runs 6,000 hours generates 120,000 megawatt-hours, i.e. more than twice as much. Dispatch links both levels: It determines from which available capacity an amount of energy results at what time.

The term power plant dispatch (Kraftwerkseinsatz) is narrower if it refers only to conventional power plants. In an electricity system with wind power, photovoltaics, battery storage, pumped storage, electrolysers, heat pumps, industrial loads and charging management, dispatch covers more than the sequence of thermal power plants. It concerns all fully or partially controllable units that influence the balancing of supply and demand.

Economic dispatch and merit order

In liberalised electricity markets such as the German one, a large part of dispatch arises through bids. Market participants largely plan their own operation themselves. This is also called self-dispatch, in contrast to systems with central dispatch scheduling by a system operator. Generators offer quantities of electricity at prices, while suppliers and consumers submit demand. For each time interval, the market determines which bids are accepted. This process is often explained with the merit order: Plants with low short-run marginal costs are dispatched first, more expensive plants follow until demand is met.

This representation is useful but incomplete. Marginal costs alone do not explain the operation of a plant. A hard-coal power plant has start-up costs, must observe a minimum load and can change its output only at a limited speed. A gas-fired power plant often has higher fuel costs but responds faster. A battery storage unit consumes no fuel, but must procure the charging energy beforehand. Its operation therefore depends on the price difference between charging and discharging, as well as on state of charge, efficiency and ageing. Wind and solar plants have very low short-run marginal costs. However, their feed-in depends on the weather and can be reduced in the event of grid congestion or negative prices.

Market-based dispatch is therefore not a simple price stack that is worked through without further conditions. It results from bids, forecasts, technical constraints and time dependencies. In practice, the day-ahead market, intraday trading and the balancing energy markets play different roles. The European coupled day-ahead market (SDAC) has traded in quarter-hours instead of hours since the delivery day of 1 October 2025. This allows dispatch to be adapted more finely to fluctuating renewable feed-in. The closer the delivery time comes, the more forecast errors, short-term availability and the ability to adjust one's own feed-in or withdrawal quickly matter.

Grid constraints and redispatch

Not every market result can be physically implemented everywhere in the grid. Electricity does not follow contractual paths, but the electrical properties of the grid. Within a bidding zone, the market simplistically assumes a grid free of congestion. If a lot of electricity is generated in one region and a lot is consumed in another, lines can nevertheless be overloaded. A grid congestion then sets limits on the economically favourable dispatch.

This gives rise to the need for redispatch. Here, grid operators intervene in the planned operation of plants in order to avoid or resolve congestion. Before the congestion, generation is reduced; behind the congestion, other plants are ramped up. The power balance is maintained, only the location of the feed-in changes. Under EU Regulation 2019/943, redispatch is in principle to be market-based and open to generation, storage and demand response. Non-market-based redispatch is permissible only under certain conditions, for example if no market-based alternative is available.

In Germany, since the reform known as Redispatch 2.0, redispatch has been uniformly regulated in § 13a EnWG (Energy Industry Act). It covers conventional generation, the feed-in and withdrawal of electricity storage units, as well as electricity from renewable energies and combined heat and power. In principle, plants with a rated capacity of 100 kilowatts or more are included, as well as smaller plants that the grid operator can remotely control at any time. Operators receive balancing and financial compensation. Controllable consumers have so far been covered in German redispatch only to a limited extent. Partly, separate instruments apply to them.

This distinction is important for many debates about electricity costs and security of supply. A power plant can be cheap in the market and nevertheless feed in at the wrong location from the grid's perspective. A plant can be technically available and still not contribute to relieving a particular congestion. As soon as grid constraints play a role, dispatch is always also a spatial question.

Technical limits of operation

Not every plant can be switched on and off at will or regulated continuously. Thermal power plants have minimum outputs, start-up times, load limits for material and heat, and an efficiency that changes with utilisation. Below a certain output, operation can be technically impossible, inefficient or economically pointless. Ramp rates indicate how quickly a plant can change its output. They determine whether a plant can balance short-term fluctuations or is better suited to operating modes that can be planned over a longer period.

For renewable energies, the limits are different. Wind and solar plants can be curtailed quickly when wind or sun is available. If the weather supply is lacking, however, they cannot be ramped up. The dispatch of these plants therefore usually concerns the question of whether electricity that could be generated is fed in completely, partly curtailed, stored or used through additional flexible demand.

Storage units shift electrical energy over time. A battery storage unit that charges at midday when there is plenty of solar power can discharge in the evening. Whether this makes sense depends on the price difference, efficiency losses, ageing, possible revenues from balancing energy, grid situations and expected scarcities. Storage units are therefore not generators in the classical sense. In dispatch, they link different points in time with one another.

Flexible loads as part of dispatch

With increasing electrification, the demand side becomes more important. Heat pumps, electric vehicles, electrolysers, cold stores, industrial processes and battery systems behind the grid connection can partly shift their consumption in time. If such a controllable load can actually be controlled, it becomes a dispatch resource. It does not necessarily reduce total consumption, but can change its timing.

This shifting can dampen price peaks, relieve local grids, make better use of renewable feed-in or reduce the need for reserves. This requires technical controllability, suitable metering, clear rights at the grid connection, transparent price signals and rules that limit interventions. A flexible load is practically usable only if its use does not violate comfort limits, production requirements or protection requirements. As a result, business models and responsibilities between suppliers, aggregators, grid operators, plant operators and consumers also change.

Typical misinterpretations

  • Dispatch is supposedly purely market-based optimisation: The market provides important signals, but does not automatically reflect all physical constraints, security-of-supply requirements and local grid problems. If line loading, voltage control or operational security require it, grid operators must intervene in addition to the market results.

  • Low marginal costs supposedly mean unrestricted priority: Wind and solar power are very cheap in ongoing operation. However, their feed-in depends on the weather, the grid's absorption capacity and the regulatory framework. With high renewable feed-in and low demand, negative prices, curtailment or storage charging can occur. This does not contradict the low marginal costs. It shows that the system can absorb electricity only to a limited extent in time and space.

  • Dispatch is supposedly a technical detail without cost relevance: Fuel consumption, emissions, congestion management, reserves held available, storage revenues and incentives for flexibility are closely linked to the operation of plants. Two electricity systems with the same installed capacity can differ greatly in operation if grid structure, flexibility supply and market rules are different.

Role in the electricity system

Dispatch shows that security of supply does not arise from sufficient capacity alone. Whether capacity is usable at the right moment depends on availability, location, response speed, controllability and coordination. A system with a lot of installed capacity can become tight if the wrong plants are available, fuels are lacking, grid congestion occurs or flexibility cannot be activated.

The term links the market and grid operation. The market organises economic dispatch decisions through prices and bids. Grid operation ensures that these decisions are physically feasible. In between lie forecasts, balance responsibility, schedule notifications, balancing energy, redispatch and technical connection rules. Anyone who understands dispatch recognises why an electricity system cannot be described by annual volumes alone. Dispatch is concrete operation under the conditions of time, location, technology and regulatory framework. The term separates the available possibility from actual use.

Sources

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Edited by eCMS on 11.11.2026 19:23

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