The spring squeeze

Hey Reader, welcome to The Energy's weekly data newsletter. This week we explore new records in curtailment and why we should get used to them in the energy transition.

Not so sunny

Poets have celebrated spring for thousands of years. But one class of people increasingly confronts spring’s dual nature.

For owners and operators of wind and solar farms, spring brings more sunshine and wind, which means they generate more power for which they can charge customers.

Spring is also the season of curtailment, which means they can’t inject all the power they generate into the grid. Instead they must “spill” a steadily increasing proportion of it, either because of grid constraints, or because prices are negative. When they do that, they earn no income from the spilled portion.

Curtailment is increasing rapidly. It breaks new records every spring, says Dylan McConnell, Senior Research Associate at the University of New South Wales, who extracted the charts in this newsletter from Australian Energy Market Operator data.

Curtailment of wind and solar generation touched a new record of 10.9 GW on Sunday.
*Source: Dylan McConnell, UNSW; AEMO data*

Pleasant Sunday

On Sunday, a pleasantly warm spring day, curtailment touched a new spontaneous mark of 10.9 gigawatts, up from the 10GW mark set three weeks earlier on 14 September (another pleasant spring Sunday). Last year’s peak spontaneous curtailment was just 8.7GW.

Rising curtailment is playing havoc with the economics of new wind and solar projects.

It’s one reason wind and solar farms haven’t been getting built in large enough numbers to keep the nation on track to meet the Albanese government’s clean energy targets.

It’s also the reason the government is throwing money at new transmission — which is needed to connect far flung wind and solar farms to population and industrial demand centres — and grid-scale batteries, which can store surplus energy for use later when demand is tighter.

Expert view

"Curtailment is a feature of a renewable energy dominated electricity system, and is something we should collectively become comfortable with. It is both efficient, and expected across many planning studies. That said, current levels are beyond what might be considered efficient, and are a challenge for new renewable energy developers. We are currently seeing curtailment at levels not previously anticipated until FY2030, when there is expected to be much more renewables in the system.

Levels seen today are partly related to the inflexibility of coal. Coal is often generating at negative market prices, while renewable energy is being curtailed, due to the costs of full shutdown. We are starting to see some developments here, with Bayswater showcasing its ability to turn off units over the weekend. The demand side and load shifting also offers considerable opportunity to make use of some of this otherwise spilled energy.

Network congestion is also a considerable factor in curtailment levels. Building out network to reduce curtailment is only part of the story — it's important to remember that not every electron is sacred, and there is an efficient amount of network congestion. The key is managing this: the current approaches need work, and common approaches used internationally have been ruled out here.

While the closure of coal and expansion of network will help reduce levels of curtailment, we need to remember that curtailment will be a feature of the new energy system. We need to think about ways to appropriately allocate the costs and risks of curtailment, rather than removing it entirely."

Dylan McConnell
Senior Research Associate, Renewable Energy & Energy Systems Analyst, UNSW

Peaking

The first chart shows a 90 day rolling average for curtailment of wind and solar generation in the National Electricity Market.

Curtailment is a small percentage of total generation, but a large and growing share of wind and solar generation. During the spring peak around 25% of total solar generation is typically curtailed, and around 12% of wind generation.

A 90 day rolling average captures the seasonality of curtailment.
*Source: Dylan McConnell, UNSW; AEMO data*

The chart appears as a series of ever increasing seasonal peaks, topping out each spring. The reason for such a consistent pattern is that as wind and solar generation increase, ‘Goldilocks’ spring temperatures — neither too hot nor too cold — reduce demand for heating and air conditioning, resulting in surpluses.

Inflexible coal plants also play a role here. Even those with increased flexibility have minimum generation levels below which they can’t flex without switching off. So they go on generating, paying to do so when prices are negative.

A 30 day rolling average (chart below) shows more starkly how far ahead of last year curtailment in the NEM has charged. Solar curtailment tops out at 30% on that basis this year and last, and wind curtailment this year tops 15% for the first time.

A 30 day rolling average shows how curtailment topping 30%of solar and 15% of wind generation. *Source: Dylan McConnell, UNSW; AEMO data*

Ascending

A 365 day rolling average eliminates seasonality and shows the steadily ascending toll of curtailment.

In absolute terms, combined wind and solar curtailment over the 12 months has just topped 6TWh In the last few days, curtailment of wind and solar power measured on a rolling 12 month basis has passed 6TWh for the first time.

That’s up 40% in a year, says McConnell.

A 365 day rolling average eliminates seasonality and shows combined wind and solar curtailment topping 6TWh for the first time. *Source: Dylan McConnell, UNSW; AEMO data*

SA, Victoria’s secret

The next two charts map curtailment by season, state and technology (wind, solar). They show South Australia and Victoria have the biggest curtailment problems (although solar curtailment is a problem everywhere).

Victoria has the biggest wind curtailment problem, in relative and absolute terms, by a street.

SA has the biggest solar curtailment problem in relative terms, closely followed by Victoria. But in absolute terms more solar generation is curtailed in the large and sunny states of NSW and Queensland.

SA has the biggest solar curtailment problem in relative terms, but in absolute terms more solar generation is curtailed in the large and sunny states of NSW and Queensland.
*Source: Dylan McConnell, UNSW; AEMO data*

Victoria has the biggest wind curtailment problem in relative and absolute terms.
*Source: Dylan McConnell, UNSW; AEMO data*

Finally, in Victoria in September, nearly 23% of utility solar generation and 19.1% of wind generation was curtailed.

If all this isn’t enough to get ministers, policymakers and developers on the same page on transmission and environmental and planning approvals, what would be?