Mythbusting “Wind Oversupply”

November 16, 2021
Hasan Zahka
Joseph Daniel
Senior Energy Analyst

Wind energy is already a common source of electricity because it is abundant, clean, reliable, and a low-cost source of electricity. Wind turbines are also flexible. Grid operators can turn down (or curtail) the output from wind farms to balance electricity supply and demand.

Grid operators curtailing wind power have given rise to the myth that wind curtailment is caused by an “oversupply” of wind. However, a recent analysis shows that wind curtailment is not caused by an oversupply of wind energy. Rather, its main causes include insufficient transmission capacity, the inflexible operation of coal-fired power plants, and a lack of battery storage.

As we continue to add more wind resources, grid operators and others must address these shortcomings in the system. Otherwise, wind curtailment will increase and ultimately hinder the transition to a cleaner, more affordable power system.

Analysis of electricity mix during wind curtailment events

The Union of Concerned Scientists commissioned Synapse Energy Economics to investigate how the Southwest Power Pool (SPP), the grid operator in the Great Plains, handles wind curtailment. SPP has the highest level of wind adoption as a percentage of total load and is consequently the grid most likely to experience “wind oversupply” events.

The results were clear: “A wind oversupply does not exist in SPP.”

Rather, during all of the hours when wind was curtailed, other higher-cost, more-polluting resources were still online. And, because of coal resources’ higher marginal cost and emissions rate, electricity customers would be better off if SPP were able to curtail coal instead of wind. Customers could have saved more than $40 million and avoided nearly 1.2 million short tons of carbon emissions per year.

If wind is available, burning coal is always more expensive, so why waste wind when there is plenty of coal to displace?

These graphs depict two of the largest wind curtailment events in 2018 and 2019 in the SPP footprint. The yellow section represents the portion of coal generation that could have been displaced by available wind energy had there been no operating constraints on the bulk power system, such as power plants with unnecessarily high minimum operating levels or transmission constraints. For the fact sheet, click here.

The solutions to wind curtailment (No. 2 might surprise you)

1: Transmission: Sometimes, all the wind blows at once. If that happens, the amount of energy produced by wind turbines can exceed the amount the transmission system can carry. But the ability for additional transmission investments to reduce wind curtailment is well established. Just take a look at the “CREZ” projects in Texas, or the Midcontinent Independent System Operator’s (MISO) Multi-Value Projects. To blame wind curtailments caused by transmission constraints on “wind oversupply” is wrong. Better to put the focus on solutions and call it a transmission undersupply.

2: Coal: You might be surprised to learn that coal has to play an important role to play in reducing wind curtailment. The fact is that significant portions of the coal fleet are operated inflexibly. And it is true that a coal plant isn’t as flexible as a wind turbine, but many coal plants could be turned down or turned off but aren’t. The reason and intent behind such actions are irrelevant, the effect is a less-competitive, less-flexible, less-clean grid that ends up costing consumers billions of dollars.

3. Storage: Storage seems an obvious solution to the problem of having more energy than needed at any given moment. Before refrigeration, if you had too much food, most of it would go bad. The same is true for electricity. If supply doesn’t match demand, it will be wasted. But with storage, you can keep excess energy and use it for later.

A few caveats

The reason we asked Synapse Energy Economics to focus on SPP was that its data were available, not because SPP isn’t doing a laudable job integrating its record-breaking levels of wind adoption. In fact, SPP has done an incredible job of keeping wind curtailment levels low. Wind adoption is higher in SPP than in MISO, but wind curtailment is lower in SPP than in MISO. SPP also reports its data in highly granular formats, enabling Synapse (and other analysts) to conduct this kind of research. MISO, not so much.

Down the road, when the grid is nearly or fully decarbonized, there may be sufficient wind or solar on the grid to cause actual renewable energy oversupply, at which point curtailment may be a cost-effective choice. The need to build more transmission and storage today is not to say that grid planners should overbuild the system to deliver every single megawatt-hour of wind generation tomorrow. At some point in the future, some amount of wind curtailment might be cost-optimal (i.e., the incremental cost to add storage or transmission may far exceed the benefits of avoided curtailment).

Is a misnomer a problem worth solving?

You may be thinking to yourself, “Okay, so technically there isn’t an oversupply of wind per se, but the wind is still being curtailed. Isn’t the curtailment the problem we should be focusing on?”

Sure, we should focus on reducing wind curtailment. And we must also recognize that misunderstandings about the causes of wind curtailment can prevent effective solutions. There are multiple causes for wind curtailment, but attributing it all to “wind oversupply” gives a false impression that there is too much wind. If anything, the opposite is true. We need more wind energy as part of the clean, affordable, reliable electricity grid of the future.

The bottom line is, if you are an analyst or an advocate, using the term “wind oversupply” is problematic.

For now, at current and near-term levels of wind deployment, a significant amount of wind curtailment could be avoided by building transmission to more effectively move renewable energy across the grid, by ending uneconomic self-commitment so that coal plants can be turned down to a greater degree and renewables can get from the grid to the load, and by building storage to soak up any remaining renewable energy that cannot be used immediately or exported.

About the author

More from Joseph

Joseph Daniel is a senior energy analyst and manager of electricity markets with the Climate & Energy program at the Union of Concerned Scientists. In his role, he serves as the primary point person for coordinating UCS’s utility regulatory work at state public utility commissions, independent system operators, and the federal energy regulatory commission.