Marginal Curtailment and the Efficient Cost of Clean Power

David Newbery and Chi Kong Chyong

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: At high penetration levels, the marginal curtailment of an extra MW of wind is typically 3+ times its average. With a portfolio of different technologies (on- and offshore wind, solar PV), an extra MW of any single technology can increase the curtailment of all technologies, increasing the marginal: average curtailment ratio and the cost of displacing fossil generation. Higher expected future capacity factors amplify this ratio. Increasing nuclear output can also cause renewable curtailment but its effect is smaller than increasing VRE to give equivalent extra output. The choice of the VRE expansion plan depends on whether the potential, average, or marginal capacity factors are used. Storage and trade significantly increase the curtailment ratio but lower delivered costs, with higher VRE penetration in neighbouring markets further amplifying curtailment.

Keywords: Variable Renewable Electricity; Marginal Curtailment; Least-Cost Expansion (search for similar items in EconPapers)
JEL-codes: H23 L94 Q28 Q42 Q48 (search for similar items in EconPapers)
Date: 2025-04-14
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