California is witnessing a growing challenge in managing its renewable energy resources, especially solar and wind power, as curtailments continue to rise. The California Independent System Operator (CAISO), which manages the majority of the state’s electricity grid, is increasingly reducing electricity generation from solar and wind sources. This is happening due to the need to balance supply and demand on the grid, even as renewable capacity is expanding rapidly.

Curtailment means cutting back the output from renewable sources. This is done either through price signals or, at times, direct orders. CAISO usually curtails power during two key situations: congestion, when transmission lines are unable to carry all the electricity generated and oversupply, when power generation exceeds customer demand.

In 2024, CAISO curtailed 3.4 million megawatt-hours (MWh) of utility-scale solar and wind energy. This marks a 29% increase compared to the previous year. Solar energy made up 93% of all curtailed energy. The highest curtailments occurred in the spring season. This is when solar output is high but demand is low due to mild temperatures. On cooler spring days, there is less need for heating or air conditioning, which leads to lower power consumption.

California’s total installed solar and wind capacity grew significantly over the past decade. In 2014, the state had 9.7 gigawatts (GW) of combined capacity. By the end of 2024, this number had grown to 28.2 GW. While this is a positive sign of renewable energy growth, it also means the grid has to handle more electricity than it can sometimes use.

Another reason for solar curtailment is the need to keep some natural gas power plants online. This is required under North American Electric Reliability Corporation (NERC) rules, which ensure grid reliability. These natural gas plants need to be ready to ramp up quickly in the evening, especially when solar generation drops off after sunset. Between 8:00 a.m. and 4:00 p.m., solar energy supplies nearly half of CAISO’s electricity. However, demand peaks in the evening as people return home and use lights, appliances, and air conditioners, particularly in the summer.

To reduce curtailments, CAISO is taking several steps. It trades excess solar and wind energy with neighboring grid systems. It is also adding more battery storage and using it across various energy markets. CAISO now includes curtailment reduction as a factor in planning new transmission lines.

New business models are also emerging. Some companies plan to use excess renewable energy to produce hydrogen. This hydrogen will be blended with natural gas and used for power generation, particularly at the Intermountain Power Project’s new facility expected to be operational by July.

One major tool helping to avoid curtailment is the Western Energy Imbalance Market (WEIM), a real-time electricity market. In 2024, it helped prevent about 274,000 MWh of curtailments, around 8% of the total. Another upcoming solution is the Extended Day-Ahead Market (EDAM), expected by May 2026, which will offer even more flexibility in managing energy.

Battery storage is proving vital. It allows solar power collected during the day to be used in the evening. In 2024, CAISO’s battery capacity increased from 8.0 GW to 11.6 GW, a 45% rise. Yet, in spring, when there is more solar energy than can be used in a single day, curtailments can still occur. Until more transmission lines or long-term storage solutions are available, high levels of curtailment are likely to persist.