What is forced curtailment, how it differs from other events, and why it matters in the US and Europe

If you manage or operate wind and solar assets in regulated or liberalized markets, understanding curtailment risks is essential.

In this article, you'll learn:

• What forced curtailment is and how it affects renewable generators
• The difference between forced, economic, and voluntary curtailment
• How TSOs and ISOs handle constrained events in different regions
• What compensation frameworks exist, and how to qualify for them
• Why anticipating these events is critical for project profitability
  
  

What is forced curtailment?

Forced curtailment occurs when a generator is technically able and ready to deliver electricity, but is prevented from doing so by the system operator, typically due to grid congestion, voltage limits, or reliability concerns.

In these cases, it's not the generator's fault, nor an internal issue: it's a system-level decision made to ensure stability. The generation is essentially blocked despite full operational capability.

This is increasingly relevant for intermittent sources like solar and wind, whose output depends on natural conditions and can't always be scheduled. Even when the sun shines or the wind blows, a generator can be held back.

Forced vs. Economic vs. Voluntary Curtailment: What's the difference?

While often grouped under the term "curtailment," there are meaningful distinctions:

Understanding these categories is critical when it comes to regulatory reporting and financial recovery.

How do system operators manage forced curtailment?

Grid and market operators around the world manage forced curtailment differently, but the logic is the same: prioritize system safety and efficiency.

In the US, Independent System Operators (ISOs) like CAISO, PJM, and ERCOT use economic dispatch models, locational marginal pricing (LMP), and congestion management protocols. Forced curtailment can influence market clearing prices or result in make-whole payments depending on the ISO’s rules.

In Europe, Transmission System Operators (TSOs) compensate constrained generation through redispatch mechanisms or balancing markets. In countries like the UK, generators receive constraint payments calculated based on opportunity cost and bid prices, as explained by NESO.

In high-renewable markets, such as Spain and Denmark, proactive congestion forecasting and flexibility services are being deployed to avoid or preempt curtailment events altogether.

These system-level decisions are usually recorded in official market platforms, enabling generators to seek compensation, when eligible, under the respective regulatory framework.

Regulatory insights: How is forced curtailment treated in the US and Europe?

United States
Each ISO or RTO has its own market rules. For example, CAISO may provide reliability must-run (RMR) or congestion revenue rights. These tools are used to mitigate grid constraints and ensure system reliability.

According to the U.S. Energy Information Administration, “in 2024, CAISO curtailed 3.4 million MWh of utility-scale wind and solar output, a 29% increase from 2023. Solar accounted for 93% of all the energy curtailed,” underscoring how grid saturation and transmission limitations continue to impact renewable generation in California.

Europe
TSOs compensate constrained generation through redispatch mechanisms or balancing markets. In countries like the UK, generators receive constraint payments calculated based on opportunity cost and bid prices. Germany operates under a "Netzengpassmanagement" system, redistributing generation and paying based on avoided generation revenues.

Understanding how your region's system operator and regulatory body define and compensate curtailment events is crucial to protect asset profitability.

Compensation for forced curtailment: What you need to know

To claim compensation, generators typically must:

• Prove generation capability with operational data (e.g., SCADA, forecast vs. actual)
• Document the event as system-initiated and beyond their control
• Comply with market rules and timelines for filing and reconciliation
  
  

In most cases, the payment is calculated as:

• Constrained energy (MWh) × Market price (LMP or Day-ahead price)
  or
• Lost revenue as per the PPA or constraint payment rate
  
  

For VRE assets like wind and solar, which can’t store energy at scale, these events can significantly distort expected revenues and project IRR.

Impact on solar projects

Solar plants are engineered to peak during daylight hours, especially in high-irradiance regions. When they’re curtailed due to grid constraints, that energy is not shifted or stored—it's lost.

This risk is growing in markets with high solar penetration and limited grid flexibility, such as:

• California’s “duck curve” midday surplus
• Spain’s rural overgeneration zones
• Eastern Europe’s emerging solar clusters
  
  

Without dynamic curtailment forecasting and congestion-aware planning, even high-performance PV plants can under-deliver financially.

Impact on wind projects

Wind farms already face production volatility due to weather conditions. But forced curtailment introduces an external, non-weather-related risk that can be hard to predict.

This is frequent in:

• Texas (ERCOT): Where transmission upgrades lag wind development
• The North Sea: Dense offshore wind clusters challenge onshore capacity
• Northeastern Brazil: Congested corridors despite rich wind resources
  
  

Even with excellent capacity factors and turbine uptime, forced curtailment can flatten margins, especially in merchant or semi-regulated market structures.

Why This Matters for Asset Operators

Because curtailment isn’t just about grid management, it’s about revenue certainty. For O&M teams, asset managers, and investors, it’s critical to:

• Distinguish between internal and external constraints
• Document each event clearly for compliance and compensation
• Integrate forecasting and predictive analytics to mitigate risks
• Collaborate with market and regulatory teams to optimize outcomes
  
  

Want to minimize revenue loss from curtailment events?
Delfos offers advanced predictive intelligence that detects and anticipates curtailment risks before they happen. Our AI-based platform helps renewable operators boost revenue certainty, reduce operational blind spots, and stay compliant with market regulations.
Schedule a call with our technical team.

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