Welcome to the concept of voluntary curtailment, where renewable energy producers actively choose to scale back production—even when the sun is shining or the wind is blowing. While this may sound counterintuitive, it’s a reality of today’s dynamics in many markets with a high degree of renewables in the mix. But, make no mistake: the ultimate goal should of course be to minimize curtailment by building smarter, more flexible energy systems that make room for every available unit of renewable energy.
What is voluntary curtailment?
Voluntary curtailment refers to a conscious decision by renewable energy producers (solar farms, wind parks, companies with on-site renewables) to reduce their energy output even when technical conditions allow them to produce at full capacity. This stands in contrast to grid-driven (non-voluntary) curtailment, which happens when system operators force producers to cut output to maintain grid stability.
In voluntary curtailment, the decision is driven by economics rather than grid constraints. When market prices are too low (often negative), or when operational or regulatory costs exceed potential revenues, continuing production can become financially unattractive.
Why would you curtail voluntarily?
As mentioned, mainly for economic returns of renewable energy investments. The main driver is the phenomenon of price cannibalization. As more renewable energy is expected to flood the grid during the same sunny or windy hours, wholesale electricity prices can collapse. In some markets, prices regularly dip below zero.
For producers, these low prices mean that producing energy can actually cost you money rather than saving you money. Even in fully amortized assets like wind farms with minimal operating expenses, exposure to these negative prices in combination with balancing costs can erode profitability during oversupplied periods.
The difference with grid-driven curtailment
Grid-driven curtailment happens when renewable energy producers are required to reduce their output because the electricity grid cannot handle all the available power. This can occur due to grid congestion, lack of transmission capacity, or other technical constraints that system operators must manage to maintain stability. In these cases, producers have no choice but to comply, and they are often compensated through regulated mechanisms.
In essence, grid-driven curtailment is imposed by system needs, while voluntary curtailment is a financial decision by producers responding to market conditions.
Turning a challenge into an opportunity might not be as easy as you think
Voluntary curtailment highlights both the challenges and opportunities of a renewables-heavy grid. While it’s a rational economic response to low prices, it’s also a symptom of an incomplete energy system.
And there are still many misconceptions related to it...
Many producers today wait until day-ahead prices are published before deciding whether to produce or curtail. This reactive strategy can create adverse imbalance effects and sometimes worsen the problem. The real opportunity lies in proactively integrating demand-side flexibility, energy storage, and digital tools that align supply and demand in real time. By shifting demand to times of high renewable production, or by storing surplus energy for later use, we can keep renewable production online and curtailment at a minimum.
It’s about moving from reactive decisions to end-to-end value strategies, ensuring that renewable energy is used effectively, sustainably, and profitably.
Conclusion
Voluntary curtailment is a reminder that a fully renewable energy future requires more than just wind turbines and solar panels.
It needs smart flexibility solutions that match supply and demand continuously. By understanding why producers sometimes choose to generate less, we can design systems that avoid curtailment altogether whenever possible, making the most of every clean kilowatt-hour.
Because at the end of the day, our goal is to use renewable energy wisely, consistently, and to the fullest extent possible.
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The Curtailment Club
This article kicks off our series called “The Curtailment Club”, where we will dive into the drivers, misconceptions, and solutions behind renewable energy curtailment over the coming months.
Stay tuned for our next article on why reactive decision-making could be costing producers (and the grid) more than they realize.
