Merit-Order Dispatch — Electricity Spot Market

Demand

System demand 45 GW

Drag the slider (or press Sweep) to raise demand. Generators dispatch cheapest-first until supply meets demand.

Market result

Clearing price (marginal cost of last unit dispatched)

— $/MWh

Dispatched capacity

0 GW

Marginal unit

—

Total generator revenue (all dispatched × clearing price)

$0 /h

Inframarginal rent (revenue above own cost — cheap plants' profit)

$0 /h

Generators (cheapest → most expensive)

How merit order works

The operator sorts every generator by marginal cost — cheapest first.
It dispatches down that list until cumulative capacity meets demand.
Every dispatched generator is paid the SAME clearing price: the marginal cost of the last (most expensive) one needed.
Cheap generators dispatched early earn "inframarginal rent" — clearing price minus their own cost, on every MWh they produce.

Dispatched (ON) Marginal unit Off / unused Demand line