The Dispatch Curve
The “dispatch curve” is something familiar to all electrical engineers and systems operators and generally unfamiliar to the general public. It is a kind of order of battle in the provision of electrical power to the grid.
The most important thing to remember is that the grid is a kind of high-wire act in which a delicate balance must be maintained between supply and demand. This is called the “voltage balance.” If supply falls more than 5 percent below demand, there will be “brownouts.” If the supply “surges” above demand, electrical equipment everywhere can burn out. That is why you have a “surge protector” between the wall outlet and your computer.
In every region of the country there are “systems operators” who spend all day and night in a control room bringing various generators on and off line in order to maintain this balance. Operators also like to have a “reserve margin” of about 20 percent – that is an extra 20 percent of power operating but not connected to the grid – in case of a sudden surge in demand or the loss of a major generating unit.
Cost is also a factor and this is where the dispatch curve comes in. In sending various generators into battle, so to speak, operators want to use the cheapest suppliers first. This keeps the cost of electricity at a minimum. As the demand for power grows during the day, more units will be added according to their costs. (This is usually done through a bidding process where suppliers decide at what price they want to offer their power.)
The graph above shows the dispatch curve for a hypothetical regional grid. The horizontal axis represents the demand for electricity in the system, beginning with zero to the left and stretching across to a hypothetical 140 gigawatts (GW) at right. Since something is always running, demand generally never falls below 67 GW, the figure reached in the early morning hours. It peaks at 114 GW on a hot summer afternoon. The vertical axis shows the operating cost at which each generating source can deliver. Operating costs are almost entirely represented by fuel costs. The sunken costs of construction are not represented here but must be taken into account in the price offered by sellers.
The dots that make up the curve represent the different sources of electricity. They are listed from the top in the order of lowest operating costs. Green – the cheapest – is renewables. Then comes nuclear (brown), hydro (blue), coal (black), natural gas, combined cycle (red), natural gas, combustion cycle (yellow), and petroleum (tan). As you can see, the different sources submit winning bids pretty much in the order of their cheapness. Renewables have no fuel costs and the fuel costs of nuclear are negligible. Hydro has some restrictions since reservoirs are not always full and flows must sometimes be adjusted to accommodate fish runs. Coal has fuel costs but they are low.
Natural gas combined cycle is a very efficient way of using natural gas, since turbines are attached both to the combustion bases and to steam that is boiled by the heat . “Peaking units” (yellow) use only the combustion cycle. They are more expensive but their great advantage is that they can be started instantly and run for short periods of time, whereas those units that boil water take about 45 minutes to reach full capacity. Finally, the few remaining boilers that run on oil are by far the most expensive.
The only problem with renewables is that they are unpredictable and not always available. Ordinarily systems operators would charge a premium for this since other units must be run simultaneously to back them up. But because of the great desire to get renewables on the grid, systems operators in some regions have been instructed not to add reliability premiums. This has caused some resentment since other suppliers are not rewarded for their reliability and it adds costs to the system. In the Bonneville Power Authority, dispatchers have now been instructed to give preference to wind even if it means that hydroelectric dams must be operated in a way that endangers fish runs.
Until the last five years, gas combustion units were more expensive and generally run only during peaking hours. But gas has now become so cheap that they are being used to “back out” aging coal plants for environmental reasons.