There is some limited evidence that California’s solar “curtailment” problem is receding on battery deployment. Curtailment, or the involuntary reduction of output of solar or wind generation due to system oversupply, could restrict renewables penetration. Indeed, most renewables and electricity experts continue to warn that solar penetration will face hard ceilings without long-duration storage availability. It seems, however, that CAISO is successfully reducing solar and wind curtailment – at least for now. While batteries are only one variable in extraordinarily complex electricity markets, California’s experience suggests that the rest of America could soon see more at-scale battery deployment, mitigating renewables’ “intermittency” problems and increasing their share of the fuel mix. We’ll know more after data from California’s low baseload Autumn comes in.

California’s Solar Curtailment Trends

According to CAISO statistics through June, YTD solar generation is up 18% while YTD curtailment is down by about 9%. In other words, solar operators have been able to produce more without curtailing production.

Why are curtailments down? Large-scale battery deployment is having some impact, although the magnitude is unclear. CAISO battery deployments are up nearly 500% since January 2020 and now total about 1.5 GW, according to the EIA – although much of the build-out has occurred only in recent months.

Still, electricity markets are enormously complex and multivariate. Vaccines and weather patterns sharply lifted load demand from 2020 levels, peakload increased, and hydropower production fell. These factors also led to reduced curtailment. While we can confidently assert that battery deployment is reducing curtailment, we may have to wait for a sense of its magnitude until data from the low-demand months of October and November come in.

Curtailments are categorized into either systemwide curtailments (i.e. due to oversupply) or localized curtailments (i.e. due to transmission congestions). We’ll be keeping a close eye on CAISO’s autumn “system curtailments,” which will be closely linked to battery build-outs.

More on the way?

“Long-duration” daily electricity storage would be a game-changer for the power sector and renewables, full-stop. If batteries are able to economically store energy for more than 8 hours, electricity markets could better align renewables’ peak generation times with peak demand. Solar energy generation tends to peak around noon; wind output varies by market but tends to reach its apex in the 2 AM. Electricity demand, however, tends to peak around 6 PM.

Form Energy claims to have created an iron-air battery that will enable economical, long-duration electricity storage by 2025. We’ll wait and see if the technology becomes operational, but if it does achieve commercial scale the implications will be massive. Economical, long-duration battery storage could sharply reduce (and possibly even eliminate) systemwide curtailment. It could also reduce local curtailment in some contexts. These factors would go a long way towards easing CAISO’s solar value deflation problem and enable more renewables penetration onto the grid.  

In the meantime, we’ll continue monitoring the relationship between CAISO battery deployment and curtailment. We expect CAISO’s experience will have major relevance for other electricity markets, but particularly ERCOT. Stay tuned.