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: As variable renewable electricity (VRE, wind and PV) penetration increases, the additional electricity delivered by one more unit of VRE capacity is substantially smaller than either its nominal output or average production: capacity of one VRE technology increases curtailment of other VRE technologies, magnifying its impact. Consequently, investment and policy decisions should be based on marginal rather than average delivered output, implying substantially higher marginal levelised costs than conventional LCoE calculations suggest. Their magnitude is calculated for a possible 2030 British scenario in which all internal congestion has been eliminated. The potential benefit of additional exports and storage depend on the extent of Continental VRE expansion. Additional nuclear power displaces some VRE, reducing its carbon benefit but by less than expanding VRE..

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: 2026-09-25
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
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Citations: View citations in EconPapers (1)

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