Since some sources of renewable energy are variable, at times power generators may produce output that is not needed. In the absence of energy storage systems, the surplus may have to be dumped or the power plant output turned down or switched off for a while. That may also have to happen if the grid cannot handle the power. Either way it is called “curtailment”.
Some specific reasons for curtailment include:
- Weak grids: there may be congestion on the grid, especially local grids, making it hard for local projects to feed power to users when other projects are also employing the grid
- Inflexible capacity: there may be large inflexible plants on the grid, e.g. nuclear plants, that cannot be turned down to allow use of power from variable renewables when it’s available
- Over-capacity: it is likely that, in order to be able to meet average demand with variable renewables, more renewable capacity will be installed than is needed when demand is lower
Growing curtailment
In each case, the result can be wasteful: the potential output is not used. In recent years, the scale of this curtailment has grown; in some countries it’s become quite significant. For example, in China, where grid upgrades have not kept pace with the rapid expansion of wind energy generation, 20% of potential wind output was curtailed in 2016. China has been trying to deal with it, as I’ve noted in earlier posts.
In the UK, with well-developed grids, the problem is smaller. Indeed, the Policy Exchange puts the loss from wind in 2017 at just 1.5 TWh of wind, representing 0.4% of total UK power demand. Even output is sometimes being curtailed, which is wasteful environmentally and economically. Wind power companies, like most generation companies, have negotiated contracts to protect themselves from this. They get compensation payments, so-called “constraint payments” for power not generated or used. So far, the payments to wind projects have been a small proportion of the total constraint payments given to generators as a whole. They can nevertheless be provocative and, as wind and other renewables expand, the proportion will grow unless measures are taken to improve grids and balancing, including the provision of storage.
The cost of energy
Some argue that curtailment is nothing new and does not matter — we have always accepted that some plants will have to be idle some of the time when demand is low. Indeed, in the case of fossil-fired plants, where fuel costs make up a significant part of the generation cost, not using them for a while will save money, although that has to be set against, on one hand, the loss of earnings and on the other, the avoidance of emissions.
However, with renewables like wind and photovoltaics (PV), where the fuel costs and emissions are zero, the balance is much more in favour of using the plant whenever possible, to earn income to pay off the construction costs. So curtailment should be avoided, although not if that involves excessive cost, e.g. for storage or grid upgrades: in some situations, curtailment may be the cheapest option. That will clearly often be the case if constraint payments are available. Some even say that in any case, with renewable costs falling we can afford to accept curtailment and build more capacity regardless. I will be looking at that contention in detail in a future post. For now, suffice it to say that the benefit may not be so clear if the value of the green energy forgone is high — it’s still a waste.
Negative prices
It’s a market-based issue. What’s more, curtailment, constraint payments or storage are not the only possible outcomes or options. There are other market responses and issues. Given the low marginal generation costs for renewable projects, if grid congestion is not the issue, the surplus output may sometimes simply be dumped on the power market at very low or even zero cost, possibly below retail or wholesale prices. That has been the case in Germany at times, and it’s been happening in the US too. Negative pricing has spread quite widely, including to the UK.
It can be good for consumers but not so good, economically, for renewable plant operators. This is part of a wider “race to the bottom” problem: as prices fall, there is less income available to support investment in new generation. More immediately, the fossil generators on the grid, for example gas turbines, cannot compete with these low marginal cost technologies and zero or even negative prices. If these gas plants abandon the market, as is a risk in Germany, that can have significant systems implications — there will be less capacity available when renewable inputs are low. That’s why capacity markets, or similar mechanisms, are being developed, to ensure that there is enough balancing capacity, in effect providing a subsidy to keep gas plants available or for other balancing services.
Surplus solutions
The simple message from this brief look at curtailment and system problems is that if renewables are to expand, there is a need to develop full grid-balancing capacity so as to avoid shortfalls, oversupply at other times and system conflicts. There is a positive potential outcome, however. If, rather than curtailing the occasional surplus output, this essentially free energy is stored and used to meet shortfalls at other times, then the problem of renewable supply variability has been at least partly solved.
Trading the surplus with other areas that have shortfalls is also an option, assuming the necessary long-distance grid transmission infrastructure has been developed. That can be used to import surpluses from elsewhere, if available when needed. For areas with regular surpluses, this could be a lucrative net trade.
It’s also possible to operate on the demand side, for example by pricing signals, so that peak demands are shifted to times when otherwise there may be low demand, too much power and a need for curtailment. In addition, on the heat demand side, some of the power surplus can be used to warm large heat stores – through immersion heaters in insulated water tanks, or other bulk heat store options, linking up with flexible combined heat and power (CHP) generation and heat networks. So variable power supplies can be used to meet varying heat demand.
A global 100% renewable energy system
Although establishing these measures will have costs, they may reduce overall system running costs, including curtailment costs, and help ensure the full balancing of variable renewables 24/7/365.
So curtailment can be dealt with, by improving grids but also by using the surpluses, and operating the power and pricing system in different ways. As we heard earlier, some think curtailment may in any case not be a major problem. A review by the UKERC found that curtailment can remain “at a low level even at very high penetrations of intermittent renewables”. It noted that “the point at which curtailment becomes significant can vary dramatically, with some analyses finding the inflection point to be as low as a 15% penetration and others finding the inflection point not being reached until there is over a 75% penetration of variable renewable generation”.
Broadly, UKERC says “the findings for relatively early curtailment are from studies focused on US electricity systems, with UK and European analyses suggesting that curtailment levels are very low until over 50% of electricity is supplied from variable renewables”.
It added “some level of curtailment may be both economically rational and sensible from a system operation perspective — so, in isolation, a degree of curtailment is not necessarily an indicator of the unsuitability of any particular form of variable renewable generation”.
That may be optimistic but although, perversely, low prices may be a problem as they make it hard for suppliers to earn enough to invest in new capacity, curtailment needn’t be a show stopper. It can be dealt with and doing so may open up interesting possibilities and net overall benefits, as long as there are not large inflexible plants on the grid making flexible balancing hard.
That was one of the messages in my 2016 IOP Publishing book Balancing Green Power [Editor’s note: IOP Publishing is the parent company of Physics World]. It is explored further in the revised and expanded version of my 2013 IOP Publishing book Renewables, which will be out soon. In my next post I look at what China is doing to reduce curtailment problems.
But can I end with a tribute to Professor Godfrey Boyle, a friend, Open University colleague and pioneer in renewables, who sadly has just died. Curtailed much too soon…
