Curtailment

Curtailment is any situation where a generator produces less than it could: the system operator turning down wind farms behind a transmission constraint, an asset reducing output during negative price periods, or contractual limits on export.

In GB, constraint-driven curtailment is typically actioned through the Balancing Mechanism, with compensation depending on the unit’s bids. Market-driven curtailment — choosing not to generate at negative prices — depends on the asset’s support scheme and contract terms.

For PPAs, curtailment risk is a standard structuring point: who bears the volume loss, whether the buyer compensates for instructed curtailment, and how negative-price hours are treated all need to be explicit in the contract.