What is curtailment, and why are wind farms paid to stop?
Curtailment is reducing generation below what a plant could produce — and wind farms are compensated for it because the grid physically cannot move the electricity to where it is needed, not because too much is being generated.
The actual constraint: transmission capacity. Generation and demand are frequently in different places. In Britain, a great deal of wind generation is in Scotland while much of the demand is further south, and the transmission capacity between them is limited.
When wind output exceeds what the network can carry southward, the system operator must constrain generation on one side and increase it on the other — paying the wind farm to reduce output and paying a generator nearer the demand to increase it. Both payments appear on bills, which is why constraint costs attract attention.
Why the wind farm is paid at all. It has a contract to sell electricity it is being instructed not to produce. Payment compensates for that lost revenue, and the alternative — no compensation — would make investment substantially more expensive, since the risk would be priced in.
Other reasons curtailment occurs:
Minimum stable generation. Some plants cannot reduce below a floor without shutting down, and certain thermal plant must run to provide grid stability services.
Negative prices, where oversupply pushes wholesale prices below zero and generators reduce output voluntarily.
System stability requirements, including inertia and voltage control, which historically required synchronous generation.
Local network limits rather than national ones.
Why it is increasing. Renewable capacity has been built far faster than transmission infrastructure, because a wind farm takes a few years to build and a major transmission line takes considerably longer — planning, consenting and construction. The mismatch in build times is the structural cause.
What reduces it:
Transmission reinforcement, which is the fundamental answer and is slow.
Storage, absorbing surplus and releasing it later.
Demand flexibility, shifting consumption to periods of surplus.
Interconnectors to other countries.
Locating demand near generation — data centres and hydrogen production being the frequently cited candidates.
Locational pricing reform, which would price electricity differently by region to signal where generation and demand should be sited.