A dispatch curve is a graph of variable operating costs for every available supply resource within a certain balancing authority area. The resources are plotted in ascending order of cost, resulting in a curve that indicates which resources are expected to be dispatched at various levels of load. The curve also shows the system marginal variable supply cost at any load level.
Following is a hypothetical dispatch curve:
In the above dispatch curve, each dot represents a supply resource available for dispatch by the system operator. To determine which resources are expected to be dispatched at any given level of demand, a straight vertical line is drawn from the bottom GW scale until it intersects the dispatch curve. All resources to the left will be dispatched, while units to the right will not be dispatched until demand or resource availability changes. The curve also indicates the marginal variable cost associated with any level. For example, at the 67 GW level (the first vertical line), the marginal cost is approximately $45/MWh and at the 114 GW level (the second vertical line) it is $100/MW.