Grid Curtailment and Other Ailments

We keep hearing news proclaiming the rise of renewables these days. X number of solar plants or wind farms being built, Y% of increase of RE capacity, so on and so forth. It seems that for as long as nature provides together with proper funding, we should be able to tap on these resources as main power sources, right? The answer’s not so simple. There exists a thing called “Grid Curtailment”, an ailment to the spread of renewable energy usage.

What is this grid curtailment all about? Put simply, it’s a phenomenon of power plants fighting for getting their power on grid. Take for example, wind energy. Energy generated from turbines does not automatically get passed to the grid and end users (or “dispatched”). Because the grid is connected to a network of power plants, there are rules that determine which one gets their power onto the grid during certain periods of time.

Factors determining dispatch:

  • Load Matching (Consumption demand).
  • Supply to the Grid
  • How quickly the power can come on line
  • Cost of dispatch
  • Priority is typically given to renewables, deemed as free energy

California saw an issue of oversupply of renewable energy and insufficient load (demand). This is partially due to the inflexibility that some generators need to constantly be run, such as nuclear, hydroelectric, geothermal and some gas-fired stations. That means the price of electricity will go below zero (generators pay to get their electricity on grid). That will lead to grid curtailment of these REs. There is no compensation for grid curtailment by the operator which means that those power generators will have to suffer a loss of profits.

Solutions to these include signing deals for the export of surplus energy to different regions, storage facilities as well as demand response. Storage facilities are valuable in storing energy during low demand hours for future release during peak demands. In other words, you get charged for storing and when energy is released again you get your money back.

At the opposite end of the spectrum, we see insufficient supply such as the one plaguing the UK. This may be the first time UK cannot meet peak demand, as they are struggling to also meet emission reduction goals. Coal and gas fired plants are being shut down and this results in losses in capacity. Due to lack of foresight in implementing policy of building new plants quickly, the capacity gaps may lead to market fluctuation in pricing. This was the impetus for the crazy 24 billion GBP nuclear deal that was signed in Oct 2015.

Maybe less risky alternatives like demand response may come in to curb the issue of over demand. Governments such as Singapore’s, are trying out demand response programmes to encourage participants to reduce their electricity consumption during peak demands. They receive an incentive for reducing electricity usage during peak demands via the electricity price reduced.

Sources: NA Windpower, The Energy Collective, GTM, Financial Times, Yahoo and others