California solar and wind curtailments increasing

As excess energy generated by renewables creates price volatility, solutions include increasing demand and either using or storing the excess electricity during times of peak generation.

June 11, 2025 Ali Karimian

Image: Pixabay

In 2024, CAISO curtailed 3.4M MWh of utility-scale wind and solar output, a 29% increase from the amount of electricity curtailed in 2023.

In its analysis, published on May 28, the U.S. Energy Information Administration (EIA) noted that solar accounted for 93% of all the energy curtailed in 2024. CAISO curtailed the most solar in the spring, when solar output was relatively high and electricity demand was relatively low, because moderate spring temperatures meant less demand for space heating or air conditioning. In 2014, a combined 9.7 GW of wind and solar photovoltaic capacity had been built in California. By the end of 2024, that number had grown to 28.2 GW.

The impact of the excess solar generation presents itself in the formation of energy prices. The graph below shows the energy prices in the first two weeks of April 2025. It is notable to see the hours of high solar generation with low or negative energy prices, while night, early morning and evening hours show higher energy prices. The y-axis of this graph is limited to –50 to +150 $/MWh. There were two instances that five-minute real-time prices reached almost $1000/MWh in the 2-week period shown (clipped from the graph, and visible as two lines that go beyond the y-axis limit). The transition period from low to high prices often shows the highest price volatility.

How do we fix price volatility?

One of the answers to this question is to increase demand and either use or store this excess electricity during times of peak generation.

CAISO is trying to reduce curtailments in several ways:

promoting the addition of  flexible resources that can quickly respond to sudden increases and decreases in demand;
trading with neighboring balancing authorities to try to sell excess solar and wind power;
incorporating battery storage into ancillary services, energy, and capacity markets;
including curtailment reduction in transmission planning.

Starting this year,  companies are planning to use excess renewable energy to make hydrogen, some of which will be stored and mixed with natural gas for summer generation at the Intermountain Power Project’s new facility scheduled to come online in July.

Batteries can soak up cheap renewable energy when it’s abundant and discharge it when congestion has eased. In some cases, there are tangible commercial benefits for business owners having battery storage on site.

Energy storage can be used to lower consumption from the grid at peak times, and the grid also financially rewards those who can reduce consumption and/or feed into the grid within a short space of time. Battery storage can help a business become more energy resilient and, if linked to generation on site, it helps the business to operate in a greener way.

A range of grid-balancing services provide opportunities to earn revenue by supplying stored energy to the grid. There are also opportunities to trade energy from battery storage on the wholesale market to capitalize on fluctuating prices. But with multiple markets on which to trade, the investment landscape for battery storage is a complex arena. However, understanding how and where businesses can stack revenues and provide an automated response is the key to proving the business case.

The landscape for battery storage is a complex arena as an opportunistic offering of batteries in various electricity markets of day-ahead or real time, energy or different type of ancillary services is a large part of the value stack. This means real-time and continual modelling, that takes variables into account, including weather variability and overall demand uncertainty is required to assess the most likely range of returns, allowing companies to place their asset into the best available market.

Smart energy companies combine machine learning, AI and data solvers with a trading team to ensure that project owners are able to maximize the value not only from the renewables project, but from the battery storage asset.

Ali Karimian is market optimization director at GridBeyond, an intelligent energy and smart grid platform provider for distributed energy resource management.

The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.

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