The Merit Order
Grid operators dispatch power plants in order of increasing short-run marginal cost, guided by an upward-sloping supply curve called “the merit order”.1
This concept is simple but potent. Merit orders explain power market dynamics ranging from coal-to-gas fuel switching to how renewables depress wholesale power prices—trends across both conventional and renewable generation dominating our grid today. The merit order is one of the first tools I learned for understanding electricity, and it remains my favorite.
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About me
I work at the intersection of batteries and electricity markets at REV Renewables, a clean energy infrastructure developer. This is a personal hobby; usual disclaimers about everything shared here.
If you need chart spam and niche energy memes clogging up your timeline as well as your inbox, I’m on Twitter @BPBartholomew.
From Will Nelson’s primer on merit orders here.
