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					</table><p>The California Independent System Operator (<a href="https://www.caiso.com/" target="_blank" rel="noopener">CAISO</a>), the grid operator for most of the state, is increasingly curtailing solar and wind-powered electricity generation to balance supply and demand amid rapid renewable energy capacity growth, according to a report by the U.S. Energy Information Agency (<a href="https://www.eia.gov/todayinenergy/detail.php?id=65364" target="_blank" rel="noopener">EIA</a>).</p>
<p>The grid operator maintains a balance between power demand and supply and a stable electrical system.</p>
<p><img loading="lazy" decoding="async" class="aligncenter wp-image-80192 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/06/EIA-article-1-.png" alt="" width="651" height="378" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/06/EIA-article-1-.png 651w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/06/EIA-article-1--300x174.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/06/EIA-article-1--624x362.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/06/EIA-article-1--600x348.png 600w" sizes="(max-width: 651px) 100vw, 651px" /></p>
<p>The wind and solar output is reduced by price signals or through an order to reduce output. This reduction is generally implemented during periods of congestion when transmission lines lack sufficient capacity to deliver the available energy or during oversupply when generation exceeds demand.</p>
<p>In 2024, CAISO curtailed 3.4 million MWh of utility-scale wind and solar output, a 29% increase from the electricity curtailed in 2023.</p>
<p>CAISO also curtails solar generation to leave room for natural gas generation. A certain amount of natural gas generation must remain online throughout the day to comply with North American Electric Reliability Corporation reliability standards and to have sufficient generation available to ramp up in the evening hours.</p>
<p>In 2024, solar energy accounted for 93% of all energy curtailed by CAISO. The highest amount of solar energy was curtailed during spring, when solar output was relatively high, and electricity demand was low, as moderate spring temperatures reduced the need for space heating or air conditioning.</p>
<p><img loading="lazy" decoding="async" class="aligncenter wp-image-80193 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/06/EIA-article-2-.png" alt="" width="655" height="364" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/06/EIA-article-2-.png 655w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/06/EIA-article-2--300x167.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/06/EIA-article-2--650x361.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/06/EIA-article-2--624x347.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/06/EIA-article-2--600x333.png 600w" sizes="(max-width: 655px) 100vw, 655px" /></p>
<p>In 2014, California had a total of 9.7 GW of installed wind and solar photovoltaic capacity. By the end of 2024, this figure had increased to 28.2 GW.</p>
<p>Solar energy supplies almost half of CAISO’s electricity demand between 8 AM and 4 PM. However, demand rises during the later evening hours as people return home from work and switch on appliances such as air conditioners, electric heaters, lights, ovens, computers, and televisions.</p>
<p>This demand is particularly noticeable on hot summer evenings after sunset when solar power is no longer being generated.</p>
<p><strong>Ways of Curtailment</strong></p>
<p>CAISO is trying to reduce curtailments in the following ways:</p>
<ul>
<li>Trading with neighboring balancing authorities to try to sell excess solar and wind power</li>
<li>Incorporating battery storage into ancillary services, energy, and capacity markets</li>
<li>Including curtailment reduction in transmission planning</li>
</ul>
<p>Additionally, companies are planning to use excess renewable energy to make hydrogen, some of which will be stored and mixed with natural gas for summer generation at the interstate Intermountain Power Project’s new facility, scheduled to come online in July.</p>
<p>CAISO is also promoting the addition of flexible resources that can quickly respond to sudden changes in demand.</p>
<p>Battery storage may also come online, allowing some renewable energy to be stored and used four to eight hours later in the day.  CAISO’s battery capacity was 11.6 GW in 2024, rising 45% from 8.0 GW in 2023.</p>
<p>EIA said it is common for daily electricity generation to outpace consumption during the springtime. Without increased transmission capacity or long-term storage solutions, significant curtailments may still happen during this season.</p>
<p>The U.S. installed a <a href="https://www.mercomindia.com/us-adds-50-gw-of-new-solar-capacity-in-2024-a-21-yoy-growth" target="_blank" rel="noopener">record</a> 50 GW of new solar capacity in 2024, a 21% year-over-year increase, according to the Solar Energy Industries Association’s U.S. Solar Market Insight 2024 Year in Review report. The country <a href="https://www.mercomindia.com/global-wind-turbine-installations-hit-a-record-121-6-gw-in-2024-report" target="_blank" rel="noopener">added</a> 5.4 GW of wind capacity in 2024.</p>


California Grid Operator Curtails Solar and Wind Power to Maintain Grid Stability


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					</table><p>Congestion costs in regional transmission organization (RTO) regions, excluding the California Independent System Operator (CAISO) region, amounted to $12.1 billion in 2022. Extrapolating these figures to include CAISO and the rest of the United States brings the total congestion costs to $20.8 billion, according to a report by power sector consulting firm <a href="https://gridstrategiesllc.com/" target="_blank" rel="noopener">Grid Strategies</a>.</p>
<p>The exponential growth in congestion costs is due to the frequent reliance on higher-cost thermal generators, as renewable energy sources are often curtailed due to insufficient transmission capacity. This trend is further exacerbated by increased system vulnerability to extreme weather, rising electricity demand, and the preference for clean energy sources often geographically distant from consumers.</p>
<p>Annual internal market congestion costs in the U.S. power sector have experienced significant growth in recent years, posing consumer challenges and highlighting the urgent need for transmission infrastructure upgrades.</p>
<p>Congestion costs, which occur when inadequate transmission capacity hinders the delivery of low-cost electricity generation, have nearly doubled from 2020 to 2021 and increased by approximately 56% from 2021 to 2022 across the RTOs and Independent System Operators (ISO). These entities serve around 58% of the country&#8217;s electricity load, making congestion costs a pressing issue affecting consumers.</p>
<p>While congestion data in non-RTO regions are not readily available, it can be assumed that congestion outside these transparent markets mirrors that within them. The price transparency and favorable transmission expansion policies in RTO regions tend to reduce congestion compared to non-RTO areas.</p>
<p><strong>Insufficient investments</strong></p>
<p>Increasing transmission capacity remains the most effective strategy to alleviate congestion. However, the investment in new large-scale, high-voltage transmission lines has been insufficient. This is despite the escalating need arising from heightened vulnerability to extreme weather events, growing electricity demand, and increased reliance on variable and clean energy sources far from consumers.</p>
<p>Additionally, the adoption of grid-enhancing technologies (GETs), such as dynamic line ratings, advanced power flow control, and topology optimization, which optimize existing grid infrastructure, has been limited among U.S. utilities.</p>
<p>Certain regions, such as New England, may experience minimal internal congestion but face significant congestion at interregional interfaces, such as the New York-New England connection. Inadequate regional and interregional transmission capacity is the root cause of congestion. It occurs when lower-cost generation cannot reach customers, forcing the dispatch of higher-cost alternatives and raising prices. The construction of new high-voltage transmission lines has considerably decreased since 2010, exacerbating congestion-related issues.</p>
<p>Volatility in fuel prices, particularly natural gas, and coal, contributes to high congestion, as cited by various RTO market monitor reports. Wholesale natural gas prices in the U.S. reached their highest level since 2008, increasing by over 53% from 2021. Transmission outages resulting from scheduled maintenance and upgrades, along with extreme weather events like Winter Storm Elliott in December 2022, have also substantially exacerbated congestion costs.</p>
<p><a href="https://www.lbl.gov/" target="_blank" rel="noopener">Lawrence Berkeley National Laboratory</a> found that regional and interregional transmission links are crucial in reducing congestion, with interregional links providing even greater benefits. Berkely Lab estimates that only 5% of hours contribute to 50% of transmission value, emphasizing the significant impact of extreme weather events on transmission systems. As extreme weather events have increased by 67% since 2000, the importance of interregional transfer capability and transmission infrastructure resilience continues to grow.</p>
<p>According to the Berkeley Lab, solar, storage, and wind projects <a href="https://www.mercomindia.com/renewables-awaiting-grid-connection-us" target="_blank" rel="noopener">accounted</a> for 95% of over 2 TW of all proposed generation capacity awaiting connection to the grid in the U.S. at the end of 2022.</p>
<p><a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/07/Marginal-value-1.png"><img loading="lazy" decoding="async" class="aligncenter wp-image-56497 " src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/07/Marginal-value-1.png" alt="Marginal value" width="786" height="518" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/07/Marginal-value-1.png 900w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/07/Marginal-value-1-300x198.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/07/Marginal-value-1-768x506.png 768w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/07/Marginal-value-1-650x428.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/07/Marginal-value-1-624x411.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/07/Marginal-value-1-600x395.png 600w" sizes="(max-width: 786px) 100vw, 786px" /></a></p>
<p>While RTOs/ISOs mitigate congestion through security-constrained economic commitment and dispatch, transmission expansion planning does not consistently prioritize regional transmission congestion cost reduction. Furthermore, interregional congestion cost reduction opportunities are not adequately considered in RTO/ISO transmission planning. State and federal regulators have an opportunity to assign responsibility for congestion management.</p>
<p>Addressing congestion requires long-term investment in large-scale, high-voltage transmission lines, which can take over a decade to develop. However, given the issue&#8217;s urgency, short-term solutions such as GETs can increase transmission capacity on existing infrastructure, alleviating up to 40% or more of congestion. Medium-term strategies, such as reconductoring with advanced conductors, involve replacing traditional steel and wire cores with carbon and composite cores on existing towers and rights of way, enabling increased line capacity.</p>
<p>Last June, the U.S. government <a href="https://www.mercomindia.com/us-doe-launches-i2x-initiative" target="_blank" rel="noopener">launched</a> the Interconnection Innovation e-Xchange initiative to connect more green energy to the country&#8217;s grid. The initiative is aimed at cutting the waiting period for clean energy sources in interconnection queues while lowering the grid connection rates.</p>


US Power Sector’s Total Congestion Costs Reaches $20.8 Billion in 2022

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