Economic dispatch

Economic dispatch allocates electricity generation among available units to meet demand at minimum operating cost while respecting operating constraints.

Incremental cost: The rate at which operating cost changes as a generator’s output changes. Dispatch balances incremental costs across unconstrained units to reduce total fuel expense.
Power system: An interconnected system that generates, transmits, distributes, and uses electrical energy. Economic dispatch coordinates generating units within this broader system.
Optimal power flow: An optimization framework that selects power-system operating points subject to network and equipment constraints. It extends dispatch by representing the electrical network and its operating limits.
Unit commitment: The scheduling of which generating units should be on or off over a planning horizon. Unlike dispatch, it includes start-up, shut-down, and commitment decisions.
Merit order: A ranking of electricity generators by the cost of producing their next unit of energy. It approximates the order in which units are loaded when constraints do not bind.
Production cost: The expense of producing a specified quantity of goods or services. Dispatch compares generators’ operating costs to choose a least-cost output mix.
Security-constrained economic dispatch: Economic dispatch that keeps the system feasible after specified contingencies such as equipment outages. It reserves feasible redispatch options to withstand modeled failures.
Capacity expansion planning: Long-term planning that chooses investments in generation, transmission, or storage capacity. Dispatch allocates existing capacity rather than selecting future investments.
Lagrange multiplier: A quantity in constrained optimization that measures how the optimum changes when a constraint is relaxed. The multiplier on the demand balance represents the system’s marginal cost of supplying more power.
Constrained optimization: The process of minimizing or maximizing an objective while satisfying specified restrictions. Economic dispatch is a constrained optimization problem with cost and power-balance terms.

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