Determinants of wind power curtailment in China: evidence from provincial panel data

Shiwei Yu, Xing Hu and Jie Liu

Applied Economics, 2023, vol. 55, issue 39, 4595-4608

Abstract: Identifying the determinants of wind curtailment is crucial to mitigating the overcapacity of wind power and achieving a low-carbon transition in China’s economy. Existing literature sorted out various factual causes of wind curtailment, but recognizing key factors and revealing their economic mechanisms are missing. Based on power market equilibrium theory, we address the issue by comparing the marginal effects of factors in a ‘supply-transmission-demand’ framework. Using the panel Tobit model with bootstrap standard errors, we find that variable wind resources and wind power supply capacity are the main determinants of curtailment. The wind power equipment utilization is significantly and negatively related to wind curtailment rate, suggesting that the variable wind resources inhibit wind power consumption from electricity security concerns and increasing costs of grid companies. The wind power supply capacity positively affects wind curtailment by directly spurring market structural disequilibrium and resource waste. We also find that policy intensity has a negative but relatively slight role, whereas wind power price does not affect curtailment due to government pricing.

Date: 2023
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DOI: 10.1080/00036846.2022.2130146

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