With this method of calculating the electricity price, the power plants are switched on one after the other until the corresponding demand is covered. The cheapest power plant is switched on first, then the second cheapest, and so on, until finally enough power is available. The last connected power plant is therefore the most expensive, currently there are gas power plants.
The costs of the last connected power plant are used to calculate the electricity price. This means that the operator of the cheapest power plant has the highest profit. The merit order therefore ensures that every operator strives to have power plants that are as cheap and efficient as possible. This accelerates the switch to power plants with renewable energy. The disadvantage: If the other power plant capacities are not sufficient, even a small gas power plant will cause the price of electricity to skyrocket given the currently high gas prices.
Source: Nachrichten
