A recent memorandum from the California ISO says that “bountiful” hydro conditions and “significant” additional solar installations could result in the curtailment of between 6,000 MW and 8,000 MW of renewable energy capacity this spring.
Past CAISO market performance reports show no significant levels of curtailment prior to the spring of 2015.
As California’s renewable capacity grows, CAISO expects curtailments to become more frequent, possibly hitting 13,000 MW by 2024.
This winter’s heavy rains and snowfalls have revived California’s duck curve, a graphic representation of high levels of renewable generation, particularly solar power, that offsets baseload generation and then falls off sharply in the evening, requiring the quick ramp up of conventional generation sources.
A report late last year from ScottMadden found that the duck curve is growing more quickly than expected. That could mean that there could be too much of a good thing.
Excess generation can lead to grid reliability problems and can drive up costs. Because it is dispatched first in California, excess wind and solar generation can force other plants to shut down. But because they may be needed later when the sun goes down, the plants must run at minimum levels.
In addition, many renewable energy plants have contractual obligations, such as power purchase agreements, that limit curtailments or have specific provisions for allocating curtailment risks. Lawyers at Latham & Watkins LLP write that those provisions could come into play if curtailment climbs toward the 13 GW mark.
Curtailing renewable resources can also affect whether or not utilities can meet mandated renewable portfolio standard targets. California has a 50% renewable energy mandate to hit by 2030, with a 40% target in 2024.
Rising levels of excess generation could prompt a re-evaluation of how curtailment is handled in PPAs, CAISO warned as far back as 2014.