Curtailment and Revenue

The continued growth of utility scale wind development has changed the mix of energy supply in many geographic regions. As variable generation sources such as wind and solar facilities become a much more substantial component of this energy mix, system operators may have to curtail facilities to ensure balanced and reliable grid operations. Regions with grid congestion or limitations of the transmission system between less expensive resources and load centers usually experience higher curtailment then those without. As curtailment can have a significant impact on the economics of a wind farm or solar facility, projecting potential curtailment becomes important to mitigate the risks of projects suffering economic consequences.

Assessing the risks for a new or existing project requires understanding its exposure to curtailment. Developers, investors and lenders need to understand the project’s interconnection scenario, market rules, futures, as well as local generation and transmission system characteristics in order to forecast curtailment over a project’s life.

AWS Truepower performs revenue potential and grid curtailment estimates for utility scale renewable projects by modeling the operation of the electric power system of the jurisdiction. Hourly potential production profiles of existing and proposed variable resource facilities throughout the jurisdiction are generated from long term datasets taking into account the appropriate technology. Where the technology is unknown an IEC class appropriate composite curve or applicable solar technology will be used.

Our analysis will be completed using state-of-the-art dispatch models that optimize generation dispatch to minimize operational cost and maintain grid reliability. Our model will use multiple future system scenarios per selected area jurisdiction, which are customizable to client needs. Each scenario is constructed to include future fuel prices, transmission build-out, generation build-out, load growth profiles, and the off-taker arrangements of portfolio facilities. By using multiple system scenarios, sensitivities and risks can be better characterized.

The Revenue Estimation and Curtailment Assessment tools can be applied to:

  • Acquisition and/or financial closing risk assessments
  • Annual balance sheet advisory updates
  • PPA expirations plans and negotiations
  • Hedge negotiations for merchant projects
  • Understanding merchant pricing for operators and annual planning
  • Understanding curtailment risk for operators and annual planning