Proactive Solutions to Curtailment Risk: Identifying New Contract Structures for Utility-Scale Renewables

The Hawaiian Electric Companies face a unique risk with regards to curtailment of utility-scale wind and solar projects due to the high penetration of distributed solar on their system. Historically, curtailment has been done in “reverse chronological order”, meaning the oldest (and, often, most expensive) projects are the least likely to be curtailed. This structure is not sustainable over the long term, as higher and higher curtailment risk will necessarily be priced into projects and drive up customer cost. The Smart Electric Power Alliance (SEPA) and ScottMadden developed a set of alternative curtailment approaches for Hawaii to consider and deploy that better manage curtailment risk and should result in more equitable power purchase agreements over the long term. Full details can be found in the final report.

Additional information can be found here. Written by SEPA’s K Kaufmann, the blog, “Changing solar PPAs could turn curtailed power into dispatchable resources,” reviews the issue of overproduction and curtailment.

For more details on regulatory proceedings in Hawaii, please see the final report as submitted to the Hawaii Public Utilities Commission on December 22, 2016, in Docket 2015-0224 and Docket 2015-0225.

And, for added insight, view Greentech Media’s latest article, “Next-Generation Energy Technologies Are Constrained by Outdated Markets. Here’s How to Fix Them.”

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