Curtailment (electricity)

In the electric power industry, curtailment is an involuntary reduction of the electric generator output ("dispatch down") made to maintain the grid stability (for example, for the grid balancing). While curtailment is a standard technique that had been applied throughout the history of electric power production, in the 21st century it became an economic issue for the owners of wind and solar generators. These variable renewable energy plants, due to the absence of an expendable resource (like fuel), have quite low marginal cost of the electricity production, so curtailment affects the economics of the project in a much more significant way than in the case of conventional units.

Curtailment is a loss of potentially useful energy, and may impact power purchase agreements. However, using all available energy may require costly methods such as building new power lines or storage, becoming more expensive than letting surplus power go unused.