Energy and natural resources
Curtailment
Deliberately cutting wind or solar output because the grid cannot take all of it.
Last reviewedWhat does Curtailment mean?
Curtailment is when a wind or solar plant is told to produce less than it could, because the grid is congested, there is more supply than demand at that moment, or the system needs other plants running for stability. The lost energy is usually wasted. Example: a 100 MW solar farm that could produce 250,000 MWh a year loses 5 percent of that output to curtailment, or 12,500 MWh; at 40 per MWh that is 500,000 of lost revenue, unless its contract pays compensation. Rising curtailment is a sign that a grid needs more transmission lines or storage.
Where does it come up in case interview prep?
- How the power system works, and who makes money in itLesson in Power, utilities and renewables
- Power economics and operations: levelized cost, the merit order, storage and the gridLesson in Power, utilities and renewables
- Power players, trends 2024 to 2026, and how to crack the casesLesson in Power, utilities and renewables
Related terms
- Capacity factorA power plant's actual output as a share of what it could produce running at full power all the time.
- Merit orderRunning power plants from cheapest to most expensive running cost until demand is met.
- Round-trip efficiencyThe share of energy put into storage that comes back out.
- BottleneckThe slowest step, which limits the output of the whole process.
- Barrel of oil equivalent (boe)A unit that converts gas into barrels of oil by energy content, so oil and gas can be added together.
- Lifting costThe cost of producing oil or gas from wells that already exist, per barrel.
- Full-cycle breakevenThe oil price a project needs to cover all its costs, including building it, and earn its required return.
- Fiscal breakeven oil priceThe oil price a government needs to balance its budget.