EBF 483
Introduction to Electricity Markets

4.5 Summary and Final Tasks

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Summary

In this lesson we discussed the economic dispatch of power plants - the practice of using existing power plants to minimize the total cost of meeting a fixed amount of electricity demand. We discussed how to perform the economic dispatch for two types of generator cost models. When marginal costs are constant, economic dispatch proceeds by building the staircase-shaped supply curve and visually finding the point where the vertical demand curve crosses the supply curve. When marginal costs are linear, economic dispatch proceeds by equating the marginal cost functions for the two generators in the system and solving for the optimal combination of generator outputs. Once we had our tools for solving economic dispatch problems, we could put together the economic dispatch and power flow methods to calculate the transmission flows that would arise from economic dispatch. Finally, we discussed a quantitative way to adjust the economic dispatch in the presence of transmission congestion and a way to quantify the economic costs associated with transmission congestion.

Reminder - Complete all of the Lesson 4 tasks!

You have reached the end of Lesson 4! Double-check the to-do list on the Lesson 4 Introduction page to make sure you have completed all of the activities listed there before you begin Lesson 5.