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1. The dispatching of power-generating facilities and demand response shall be non-discriminatory, transparent and, unless otherwise provided under paragraphs 2 to 6, market based.

2. Without prejudice to Articles 107, 108 and 109 TFEU, Member States shall ensure that when dispatching electricity generating installations, system operators shall give priority to generating installations using renewable energy sources to the extent permitted by the secure operation of the national electricity system, based on transparent and non-discriminatory criteria and where such power-generating facilities are either:

(a) power-generating facilities that use renewable energy sources and have an installed electricity capacity of less than 400 kW; or (b) demonstration projects for innovative technologies, subject to approval by the regulatory authority, provided that such priority is limited to the time and extent necessary for achieving the demonstration purposes.

3. A Member State may decide not to apply priority dispatch to power-generating facilities as referred to in point (a) of paragraph 2 with a start of operation at least six months after that decision, or to apply a lower minimum capacity than that set out under point (a) of paragraph 2, provided that:

(a) it has well-functioning intraday and other wholesale and balancing markets and that those markets are fully accessible to all market participants in accordance with this Regulation;

(b) redispatching rules and congestion management are transparent to all market participants;

(c) the national contribution of the Member State towards the Union's binding overall target for share of energy from renewable sources under Article 3(2) of Directive (EU) 2018/2001 of the European Parliament and of the Council () and point (a)(2) of Article 4 of Regulation (EU) 2018/1999 of the European Parliament and of the Council () is at least equal to the corresponding result of the formula set out in Annex II to Regulation (EU) 2018/1999 and the Member State's share of energy from renewable sources is not below its reference points under point (a)(2) of Article 4 of Regulation (EU) 2018/1999, or alternatively, the Member State's share of energy from renewable sources in gross final electricity consumption is at least 50 %;

(d) the Member State has notified the planned derogation to the Commission setting out in detail how the conditions set out under points (a), (b) and (c) are fulfilled; and (e) the Member State has published the planned derogation, including the detailed reasoning for the granting of that derogation, taking due account of the protection of commercially sensitive information where required.

Any derogation shall avoid retroactive changes that affect generating installations already benefiting from priority dispatch, notwithstanding any agreement between a Member State and the operator of a generating installation on a voluntary basis. Without prejudice to Articles 107, 108 and 109 TFEU, Member States may provide incentives to installations eligible for priority dispatch to voluntarily give up priority dispatch.

4. Without prejudice to Articles 107, 108 and 109 TFEU, Member States may provide for priority dispatch for electricity generated in power-generating facilities using high-efficiency cogeneration with an installed electricity capacity of less than 400 kW.

5. For power-generating facilities commissioned as from 1 January 2026, point (a) of paragraph 2 shall apply only to power-generating facilities that use renewable energy sources and have an installed electricity capacity of less than 200 kW.

6. Without prejudice to contracts concluded before 4 July 2019, power-generating facilities that use renewable energy sources or high-efficiency cogeneration and were commissioned before 4 July 2019 and, when commissioned, were subject to priority dispatch under Article 15(5) of Directive 2012/27/EU or Article 16(2) of Directive 2009/28/EC of the European Parliament and of the Council () shall continue to benefit from priority dispatch. Priority dispatch shall no longer apply to such power-generating facilities from the date on which the power-generating facility becomes subject to significant modifications, which shall be deemed to be the case at least where a new connection agreement is required or where the generation capacity of the power-generating facility is increased.

7. Priority dispatch shall not endanger the secure operation of the electricity system, shall not be used as a justification for curtailment of cross-zonal capacities beyond what is provided for in Article 16 and shall be based on transparent and non-discriminatory criteria.