What Is Economic Dispatch?

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  • Written By: Felicia Dye
  • Edited By: Melissa Wiley
  • Last Modified Date: 19 September 2019
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Economic dispatch refers to the process of providing the necessary amount of power in a low-cost manner. To do so, focus must never waiver from the costs of the decisions made regarding the generation and transmission of power. Operational issues, such as generator capacity, must be considered so that an adequate plan can be developed. The plan should always ensure that the obligation to serve the needs of consumers will be met.

Many people are unaware of how complex power supply really is. Economic dispatch is generally achieved by applying complicated algorithms, developing a plan, and monitoring the plan. This effort is necessary because if too much power is supplied the goal of keeping costs as low as possible will not be met, and if too little power is supplied the responsibility of serving consumer demand will not be met.

A number of operational factors must be taken into consideration. In many cases, the power that an area receives can be generated from multiple sources. One of the first decisions that may need to be made is which sources to rely on at any given time. This can directly affect costs because the expense of generating nuclear power, for example, may exceed that of power from natural gas. The costs of power from two different natural gas sources can even differ.


It may not be possible to base a plan solely on the expense of the source. This is because the cheapest source may have capacity limits that are inadequate for the demand. It may be necessary to use multiple sources at a given moment.

Economic dispatch is not something that can be achieved through static action. Power demands vary throughout the day and from day to day. Consider an industrial area. Its power demands are likely to be very high Monday through Friday from the early morning hours until the evening. At night and on the weekends, however, the power demand may be drastically lower. Adjustments must be made according to need.

It is common to find that power transmission for one day was scheduled a day or more before. Even with a schedule, it is still necessary to monitor conditions to ensure that the load that will be delivered at any given time will be sufficient and that it is not excessive. A transmission operator may have the responsibility of doing this on an hourly basis. It is also generally his responsibility to make the needed changes or to communicate the need to do so as situations arise.

Economic dispatch is not left solely to the intelligence and skill of individuals. Computer software serves as an essential tool in accomplishing the overall goal. For example, to schedule future power transmission, it is generally necessary to rely on forecasts, which are usually computer generated. Software is also used to monitor flow patterns and to calculate generating costs.


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