Energy and economic implications of photovoltaic curtailment: current status and future scenarios

Abstract

As photovoltaic (PV) capacity grows, electricity grids are increasingly relying on curtailment to manage variability. Curtailments limit the amount of PV energy accepted by the grid, reducing revenues for PV operators, especially in high-penetration markets like Spain. However, their magnitude and economic impact have not yet been assessed at the national level. This study quantifies the energy and economic consequences of PV curtailment in Spain using real electricity production, curtailment and price data from October 2022 to September 2024. A techno-economic model is applied to calculate the impact of curtailment on the levelized cost of electricity (LCOE) and net present value (NPV) and to assess the viability of batteries. Results show that, over the investigated period, 2.5 % of PV-generated energy was curtailed without compensation, leading to a loss of €146,400 per day, an increase in LCOE by 0.10 €cent/kWh (+2.5 %) and a decrease in NPV of €27.1/kW (−7.7 %). Batteries sized at 0.2 kWh/kW could recover up to 80 % of curtailed energy, with an economically justifiable CAPEX of up to €47/kW. Additionally, each 1 % increase in curtailments would raise LCOE by 1.69 % and reduce NPV by 2.96 %. These findings highlight curtailment’s economic impact and the viability of batteries as mitigation.