diff --git a/Dockerfile b/Dockerfile
new file mode 100644
index 000000000..fdbe72b63
--- /dev/null
+++ b/Dockerfile
@@ -0,0 +1,14 @@
+# Dockerfile to run the API on port 8888 using an application factory
+FROM python:3.13-slim
+
+WORKDIR /app
+COPY requirements.txt ./
+RUN pip install --no-cache-dir -r requirements.txt
+
+COPY app ./app
+COPY example_payloads ./example_payloads
+COPY README.md ./README.md
+
+EXPOSE 8888
+# Run FastAPI using the factory function create_app
+CMD ["uvicorn", "app.main:create_app", "--factory", "--host", "0.0.0.0", "--port", "8888"]
diff --git a/Dockerfile.test b/Dockerfile.test
new file mode 100644
index 000000000..d91619e28
--- /dev/null
+++ b/Dockerfile.test
@@ -0,0 +1,17 @@
+# Dockerfile for running tests
+FROM python:3.13-slim
+
+WORKDIR /app
+
+# Install dependencies
+COPY requirements.txt ./
+COPY requirements-test.txt ./
+RUN pip install --no-cache-dir -r requirements-test.txt
+
+# Copy source and tests
+COPY app ./app
+COPY tests ./tests
+COPY example_payloads ./example_payloads
+
+# Default command runs tests
+CMD ["pytest", "-q"]
diff --git a/README.md b/README.md
index 44c93d608..b15154ce9 100644
--- a/README.md
+++ b/README.md
@@ -1,5 +1,29 @@
 # powerplant-coding-challenge
 
+This repository contains a FastAPI service that solves the production planning challenge.
+
+## How to run
+- Requirements: Python 3.13+ (tested with 3.13), pip
+- Install deps: pip install -r requirements.txt (pip install -r requirements-test.txt for testing)
+- Start API (port 8888): uvicorn app.main:create_app --factory --host 0.0.0.0 --port 8888 --reload
+- Endpoint: POST http://localhost:8888/productionplan
+  - Body: one of the payloads in example_payloads (payload1.json etc.)
+  - Response: list of {"name": str, "p": float} with 0.1 MW granularity and sum equal to load
+
+### Optional: Docker
+- Build: docker build -t powerplant-api .
+- Run: docker run -p 8888:8888 powerplant-api
+
+### Project layout
+- app/api: FastAPI routes
+- app/schemas: Pydantic request/response schemas
+- app/services: Production planner algorithm
+
+### Notes
+- CO2 cost (0.3 ton/MWh) is applied to gas-fired units as per the README extra challenge.
+- Errors return 422 with a message when the load cannot be met or constraints make it infeasible.
+
+------------
 
 ## Welcome !
 
diff --git a/app/__init__.py b/app/__init__.py
new file mode 100644
index 000000000..989043c67
--- /dev/null
+++ b/app/__init__.py
@@ -0,0 +1 @@
+# Package marker for the application
diff --git a/app/api/__init__.py b/app/api/__init__.py
new file mode 100644
index 000000000..28b07eff6
--- /dev/null
+++ b/app/api/__init__.py
@@ -0,0 +1 @@
+# API package
diff --git a/app/api/routes.py b/app/api/routes.py
new file mode 100644
index 000000000..d6eb7c532
--- /dev/null
+++ b/app/api/routes.py
@@ -0,0 +1,16 @@
+from fastapi import APIRouter, HTTPException
+
+from app.schemas.payload import ProductionPlanRequest
+from app.schemas.response import ProductionPlanResponseItem
+from app.services.production_planner import plan_production
+
+router = APIRouter()
+
+
+@router.post("/productionplan", response_model=list[ProductionPlanResponseItem])
+async def production_plan(payload: ProductionPlanRequest):
+    try:
+        plan = plan_production(payload)
+    except ValueError as e:
+        raise HTTPException(status_code=422, detail=str(e))
+    return [ProductionPlanResponseItem(name=p.name, p=p.p) for p in plan]
diff --git a/app/main.py b/app/main.py
new file mode 100644
index 000000000..825af5497
--- /dev/null
+++ b/app/main.py
@@ -0,0 +1,28 @@
+import logging
+
+from fastapi import FastAPI, Request
+from fastapi.responses import JSONResponse
+
+from app.api.routes import router as api_router
+
+# Configure logging
+logging.basicConfig(
+    level=logging.INFO,
+    format="%(asctime)s - %(levelname)s - %(name)s - %(message)s",
+)
+logger = logging.getLogger("powerplant")
+
+
+def create_app() -> FastAPI:
+    application = FastAPI(title="Powerplant Production Planner", version="1.0.0")
+
+    @application.exception_handler(Exception)
+    async def unhandled_exception_handler(request: Request, exc: Exception):
+        logger.exception("Unhandled error: %s", exc)
+        return JSONResponse(
+            status_code=500,
+            content={"detail": "Internal server error"},
+        )
+
+    application.include_router(api_router)
+    return application
diff --git a/app/schemas/__init__.py b/app/schemas/__init__.py
new file mode 100644
index 000000000..8d2fd8534
--- /dev/null
+++ b/app/schemas/__init__.py
@@ -0,0 +1 @@
+# Schemas package
diff --git a/app/schemas/payload.py b/app/schemas/payload.py
new file mode 100644
index 000000000..f80ba39dd
--- /dev/null
+++ b/app/schemas/payload.py
@@ -0,0 +1,27 @@
+from typing import Literal, Annotated
+
+from annotated_types import MinLen
+from pydantic import BaseModel, Field, NonNegativeFloat, ConfigDict
+
+
+class Fuels(BaseModel):
+    gas: float = Field(alias="gas(euro/MWh)")
+    kerosine: float = Field(alias="kerosine(euro/MWh)")
+    co2: float = Field(alias="co2(euro/ton)")
+    wind: float = Field(alias="wind(%)")
+
+    model_config = ConfigDict(populate_by_name=True)
+
+
+class PowerPlantIn(BaseModel):
+    name: str
+    type: Literal["gasfired", "turbojet", "windturbine"]
+    efficiency: float
+    pmin: float
+    pmax: float
+
+
+class ProductionPlanRequest(BaseModel):
+    load: NonNegativeFloat
+    fuels: Fuels
+    powerplants: Annotated[list[PowerPlantIn], MinLen(1)]
diff --git a/app/schemas/response.py b/app/schemas/response.py
new file mode 100644
index 000000000..a993f9faa
--- /dev/null
+++ b/app/schemas/response.py
@@ -0,0 +1,6 @@
+from pydantic import BaseModel
+
+
+class ProductionPlanResponseItem(BaseModel):
+    name: str
+    p: float
diff --git a/app/services/__init__.py b/app/services/__init__.py
new file mode 100644
index 000000000..a70b3029a
--- /dev/null
+++ b/app/services/__init__.py
@@ -0,0 +1 @@
+# Services package
diff --git a/app/services/production_planner.py b/app/services/production_planner.py
new file mode 100644
index 000000000..3962641aa
--- /dev/null
+++ b/app/services/production_planner.py
@@ -0,0 +1,231 @@
+from dataclasses import dataclass
+from typing import List, Literal
+
+from app.schemas.payload import ProductionPlanRequest
+
+
+@dataclass
+class Dispatchable:
+    name: str
+    kind: Literal["windturbine", "gasfired", "turbojet"]
+    marginal_cost: float  # euro per MWh
+    pmin: float
+    pmax: float
+    p: float = 0.0
+
+    @property
+    def headroom(self) -> float:
+        return max(0.0, self.pmax - self.p)
+
+    @property
+    def reducible(self) -> float:
+        # how much we can reduce while staying above pmin
+        return max(0.0, self.p - self.pmin)
+
+
+CO2_TON_PER_MWH = 0.3  # only for gas-fired according to challenge extras
+
+
+def plan_production(req: ProductionPlanRequest) -> list[Dispatchable]:
+    load = float(req.load)
+    if load == 0:
+        return [
+            Dispatchable(pp.name, pp.type, 0.0, 0.0, 0.0, 0.0) for pp in req.powerplants
+        ]
+
+    # Build dispatchable units with effective costs and capacities
+    items: list[Dispatchable] = []
+    wind_factor = max(0.0, min(100.0, float(req.fuels.wind))) / 100.0
+
+    for pp in req.powerplants:
+        if pp.type == "windturbine":
+            pmax_eff = pp.pmax * wind_factor
+            items.append(
+                Dispatchable(
+                    name=pp.name,
+                    kind=pp.type,
+                    marginal_cost=0.0,
+                    pmin=0.0,
+                    pmax=pmax_eff,
+                )
+            )
+        elif pp.type == "gasfired":
+            # cost per MWh produced
+            fuel_cost = req.fuels.gas / pp.efficiency
+            co2_cost = CO2_TON_PER_MWH * req.fuels.co2
+            items.append(
+                Dispatchable(
+                    name=pp.name,
+                    kind=pp.type,
+                    marginal_cost=fuel_cost + co2_cost,
+                    pmin=pp.pmin,
+                    pmax=pp.pmax,
+                )
+            )
+        elif pp.type == "turbojet":
+            fuel_cost = req.fuels.kerosine / pp.efficiency
+            items.append(
+                Dispatchable(
+                    name=pp.name,
+                    kind=pp.type,
+                    marginal_cost=fuel_cost,
+                    pmin=pp.pmin,
+                    pmax=pp.pmax,
+                )
+            )
+        else:
+            raise ValueError(f"Unsupported powerplant type: {pp.type}")
+
+    # Sort by marginal cost asc; for equal cost, larger pmax first then better efficiency effect not tracked, fall back to name
+    items.sort(key=lambda d: (d.marginal_cost, -d.pmax, d.name))
+
+    remaining = load
+
+    # First, fully utilize wind (cheapest, pmin 0)
+    for d in items:
+        if d.kind == "windturbine" and remaining > 0:
+            take = min(d.pmax, remaining)
+            d.p = take
+            remaining -= take
+
+    # Then thermal units by merit order
+    committed: List[Dispatchable] = [
+        d for d in items if d.p > 0 or d.kind == "windturbine"
+    ]
+
+    for d in items:
+        if d.kind == "windturbine":
+            # already handled
+            continue
+        if remaining <= 0:
+            break
+
+        # Try to fill remaining using already committed units (headroom) before starting a new one with pmin
+        if committed:
+            remaining = _increase_existing_to_fill(remaining, committed)
+            if remaining <= 0:
+                break
+
+        # Need this unit
+        if remaining >= d.pmin:
+            take = min(d.pmax, remaining)
+            d.p = take
+            remaining -= take
+            committed.append(d)
+        else:
+            # remaining < pmin: try not to start this unit by increasing previous headroom
+            if committed:
+                rem2 = _increase_existing_to_fill(remaining, committed)
+                if rem2 <= 0:
+                    remaining = 0.0
+                    break
+            # Otherwise, we must start this unit at pmin and reduce some previous output to keep balance
+            d.p = d.pmin
+            committed.append(d)
+            # We overshoot by (pmin - remaining)
+            overflow = d.pmin - remaining
+            reduced = _reduce_previous_to_absorb(overflow, committed[:-1])
+            if reduced + 1e-9 < overflow:
+                # Could not absorb overflow -> infeasible
+                raise ValueError(
+                    "Infeasible dispatch with given pmin/pmax constraints to match load exactly"
+                )
+            remaining = 0.0
+
+    # After loop, if still remaining, try to increase existing including the most expensive if any left
+    if remaining > 0:
+        remaining = _increase_existing_to_fill(
+            remaining, [d for d in items if d.kind != "windturbine"]
+        )  # include all thermals
+        if remaining > 1e-6:
+            raise ValueError("Insufficient capacity to meet the load")
+
+    # Rounding to 0.1 and adjustment
+    _round_and_adjust(items, load)
+
+    # Return in original input order as typical expected response lists all plants
+    name_to_item = {d.name: d for d in items}
+    ordered = [name_to_item[pp.name] for pp in req.powerplants]
+    return ordered
+
+
+def _increase_existing_to_fill(remaining: float, units: List[Dispatchable]) -> float:
+    if remaining <= 0:
+        return 0.0
+    for u in units:
+        if remaining <= 0:
+            break
+        head = u.headroom
+        if head <= 0:
+            continue
+        inc = min(head, remaining)
+        u.p += inc
+        remaining -= inc
+    return remaining
+
+
+def _reduce_previous_to_absorb(overflow: float, units: List[Dispatchable]) -> float:
+    reduced_total = 0.0
+    # Reduce from most expensive first to keep merit order optimal
+    for u in sorted(units, key=lambda x: (-x.marginal_cost, x.pmin)):
+        if reduced_total >= overflow - 1e-9:
+            break
+        reducible = u.reducible
+        if reducible <= 0:
+            continue
+        take = min(reducible, overflow - reduced_total)
+        u.p -= take
+        reduced_total += take
+    return reduced_total
+
+
+def _round_and_adjust(items: List[Dispatchable], load: float):
+    # Round to 0.1 MW
+    for d in items:
+        d.p = round(d.p * 10) / 10.0
+        # Clip within bounds after rounding
+        if d.kind == "windturbine":
+            d.p = max(0.0, min(d.p, d.pmax))
+        else:
+            d.p = max(d.pmin, min(d.p, d.pmax))
+
+    target = round(load * 10) / 10.0
+    current = sum(d.p for d in items)
+    diff = round((target - current) * 10) / 10.0
+    if abs(diff) < 0.05:
+        return
+
+    step = 0.1 if diff > 0 else -0.1
+    # For increasing, prefer cheapest with headroom; for decreasing, prefer most expensive with reducible
+    for _ in range(5000):
+        if abs(diff) < 0.05:
+            break
+        if step > 0:
+            # try units with headroom
+            candidates = sorted(items, key=lambda x: (x.marginal_cost, -x.pmax, x.name))
+            changed = False
+            for u in candidates:
+                max_allow = u.pmax if u.kind != "windturbine" else u.pmax
+                if u.p + 1e-9 <= max_allow - 0.099:
+                    u.p = round((u.p + 0.1) * 10) / 10.0
+                    diff = round((diff - 0.1) * 10) / 10.0
+                    changed = True
+                    break
+            if not changed:
+                raise ValueError(
+                    "Cannot adjust up to reach exact load at 0.1 MW granularity"
+                )
+        else:
+            candidates = sorted(items, key=lambda x: (-x.marginal_cost, x.pmin))
+            changed = False
+            for u in candidates:
+                min_allow = u.pmin if u.kind != "windturbine" else 0.0
+                if u.p >= min_allow + 0.099:
+                    u.p = round((u.p - 0.1) * 10) / 10.0
+                    diff = round((diff + 0.1) * 10) / 10.0
+                    changed = True
+                    break
+            if not changed:
+                raise ValueError(
+                    "Cannot adjust down to reach exact load at 0.1 MW granularity"
+                )
diff --git a/requirements-test.txt b/requirements-test.txt
new file mode 100644
index 000000000..bb792c1dd
--- /dev/null
+++ b/requirements-test.txt
@@ -0,0 +1,3 @@
+-r requirements.txt
+pytest==8.4.2
+httpx==0.27.2
diff --git a/requirements.txt b/requirements.txt
new file mode 100644
index 000000000..d8216390c
--- /dev/null
+++ b/requirements.txt
@@ -0,0 +1,4 @@
+fastapi==0.117.1
+annotated-types==0.7.0
+uvicorn[standard]==0.36.0
+pydantic==2.11.9
diff --git a/tests/__init__.py b/tests/__init__.py
new file mode 100644
index 000000000..e69de29bb
diff --git a/tests/conftest.py b/tests/conftest.py
new file mode 100644
index 000000000..e6145b94c
--- /dev/null
+++ b/tests/conftest.py
@@ -0,0 +1,8 @@
+import pytest
+
+from app.main import create_app
+
+
+@pytest.fixture
+def application():
+    return create_app()
diff --git a/tests/test_api.py b/tests/test_api.py
new file mode 100644
index 000000000..4b17394f6
--- /dev/null
+++ b/tests/test_api.py
@@ -0,0 +1,33 @@
+import json
+from pathlib import Path
+from fastapi.testclient import TestClient
+
+
+BASE = Path(__file__).resolve().parents[1]
+
+
+def load_payload(name: str):
+    p = BASE / "example_payloads" / name
+    return json.loads(p.read_text())
+
+
+def test_productionplan_endpoint_ok_payload1(application):
+    client = TestClient(application)
+    payload = load_payload("payload1.json")
+    resp = client.post("/productionplan", json=payload)
+    assert resp.status_code == 200
+    data = resp.json()
+    assert isinstance(data, list)
+    # Length should match number of powerplants
+    assert len(data) == len(payload["powerplants"])
+    # Sum of p equals load
+    total = sum(item["p"] for item in data)
+    assert abs(total - payload["load"]) < 1e-6
+
+
+def test_productionplan_rejects_negative_load(application):
+    client = TestClient(application)
+    payload = load_payload("payload1.json")
+    payload["load"] = -10
+    resp = client.post("/productionplan", json=payload)
+    assert resp.status_code == 422
diff --git a/tests/test_planner.py b/tests/test_planner.py
new file mode 100644
index 000000000..8c9d1ffdc
--- /dev/null
+++ b/tests/test_planner.py
@@ -0,0 +1,45 @@
+import json
+from pathlib import Path
+
+from app.schemas.payload import ProductionPlanRequest
+from app.services.production_planner import plan_production
+
+BASE = Path(__file__).resolve().parents[1]
+
+
+def load_payload(name: str):
+    p = BASE / "example_payloads" / name
+    return json.loads(p.read_text())
+
+
+def test_plan_production_meets_load_and_constraints_payload1():
+    payload = load_payload("payload1.json")
+    req = ProductionPlanRequest(**payload)
+    result = plan_production(req)
+
+    # Sum of outputs should equal load within small tolerance
+    total = sum(d.p for d in result)
+    assert abs(total - req.load) < 1e-6
+
+    # Each output within bounds
+    for d, pp in zip(result, req.powerplants):
+        # windturbine pmin considered 0 dynamically, but planner sets pmin=0 for wind
+        if d.kind != "windturbine":
+            assert pp.pmin - 1e-6 <= d.p <= pp.pmax + 1e-6
+        else:
+            assert 0.0 - 1e-6 <= d.p <= pp.pmax * req.fuels.wind / 100.0 + 1e-6
+
+
+def test_plan_production_meets_load_and_constraints_payload2():
+    payload = load_payload("payload2.json")
+    req = ProductionPlanRequest(**payload)
+    result = plan_production(req)
+
+    total = sum(d.p for d in result)
+    assert abs(total - req.load) < 1e-6
+
+    for d, pp in zip(result, req.powerplants):
+        if d.kind != "windturbine":
+            assert pp.pmin - 1e-6 <= d.p <= pp.pmax + 1e-6
+        else:
+            assert d.p == 0.0  # no wind
diff --git a/tests/test_schemas.py b/tests/test_schemas.py
new file mode 100644
index 000000000..556de5cdf
--- /dev/null
+++ b/tests/test_schemas.py
@@ -0,0 +1,50 @@
+import json
+from pathlib import Path
+import pytest
+
+from app.schemas.payload import ProductionPlanRequest, Fuels
+
+BASE = Path(__file__).resolve().parents[1]
+
+
+def load_payload(name: str):
+    p = BASE / "example_payloads" / name
+    return json.loads(p.read_text())
+
+
+def test_fuels_aliases_population():
+    data = {
+        "gas(euro/MWh)": 10.0,
+        "kerosine(euro/MWh)": 20.0,
+        "co2(euro/ton)": 30.0,
+        "wind(%)": 40.0,
+    }
+    fuels = Fuels(**data)
+    # Attributes accessible by field name
+    assert fuels.gas == 10.0
+    assert fuels.kerosine == 20.0
+    assert fuels.co2 == 30.0
+    assert fuels.wind == 40.0
+
+
+def test_production_plan_request_parses_example_payload():
+    payload = load_payload("payload1.json")
+    req = ProductionPlanRequest(**payload)
+    assert req.load == payload["load"]
+    assert len(req.powerplants) == len(payload["powerplants"])
+
+
+def test_load_must_be_non_negative():
+    with pytest.raises(ValueError):
+        ProductionPlanRequest(
+            load=-1,
+            fuels=Fuels(
+                **{
+                    "gas(euro/MWh)": 10.0,
+                    "kerosine(euro/MWh)": 20.0,
+                    "co2(euro/ton)": 30.0,
+                    "wind(%)": 40.0,
+                }
+            ),
+            powerplants=[],
+        )