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No alarms and no surprises: Dynamics of renewable energy curtailment in California

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  • López Prol, Javier
  • Zilberman, David

Abstract

As variable renewable energy (VRE) sources like wind and solar increase their penetration in electricity markets, their production has to be curtailed more often due to overproduction, system inflexibility or grid congestion. Curtailment entails a higher levelized cost per unit of usable electricity and could therefore hamper the further diffusion of VRE. We study the effects of variable (wind and solar) and inflexible (nuclear) penetration and demand on hourly VRE curtailment in California (CAISO) between May 2014 and July 2022. All the methods used (OLS, FGLS Prais-Winsten, Beta regression and Generalized Additive Models) show that increasing variable and inflexible penetration increases wind and solar curtailment rates. On the opposite, increasing electricity demand reduces curtailment rates up to around 60% of peak load, where it stabilizes. Solar curtailment is generally higher and more predictable than wind curtailment at the same penetration levels. Despite increasing wind and solar penetration, the effect of curtailment on levelized costs is moderate.

Suggested Citation

  • López Prol, Javier & Zilberman, David, 2023. "No alarms and no surprises: Dynamics of renewable energy curtailment in California," Energy Economics, Elsevier, vol. 126(C).
    • Handle: RePEc:eee:eneeco:v:126:y:2023:i:c:s0140988323004723
    DOI: 10.1016/j.eneco.2023.106974
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    More about this item

    Keywords

    Variable renewable energy sources; Cannibalization; Excess electricity; Energy transition; Curtailment;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

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