In an agricultural community in California’s Central Valley, huge bricks of clay, juiced to more than 1,000 degrees Celsius, use the state’s ample midday solar supply to provide steam to an ethanol plant. In Ireland, a nonprofit relies on excess wind energy to power water heaters overnight in state-subsidized housing. And at a Belgian port, a green hydrogen plant is in the works that will use spare wind electricity produced offshore.
These projects — and others like them — are designed to make use of renewable electricity at times of day when the grid is flush with it. They take advantage of a resource that would otherwise be wasted.
The potential for such projects has increased in recent years as wind and solar installations ballooned in number. Though natural gas still accounts for most U.S. generation, renewable energy has made up the majority of new additions to the grid since 2019. In many locations, new renewable installations now provide electricity at costs lower than fossil fuels.
In some markets, this dynamic has already led to a surplus of clean electricity at certain times of day. Long-duration storage is still too nascent to absorb it all, though energy modeling experts expect it to play a vital role in the decarbonized grid of the coming decades. In the meantime, project developers are increasingly considering how to avoid wasting electricity produced when there’s not enough demand for it.
It’s “something that is on the mind of every developer,” said Lora Chante, senior director of technical services at Avangrid Renewables, one of the largest owners of renewable energy projects in the U.S.
And if done right, it could spur decarbonization in new industries.
Today, curtailment happens just 1.5% to 4% of the time in many significant renewables markets, according to the International Energy Agency, but it will become more commonplace as even more renewables are deployed. Modeling shows that curtailment levels usually land somewhere between 5% and 20% in a least-cost, fully clean system, said Brian Tarroja, an energy systems researcher at University of California Irvine’s Advanced Power and Energy Program. “The goal isn’t often to eliminate all curtailment, but it’s to keep the levels of curtailment from getting out of hand,” he said.
Achieving that goal is expected to become more challenging. Experts from the National Renewable Energy Laboratory and the International Energy Agency expect that overbuilding wind and solar is the cheapest and most flexible way to build a decarbonized grid, which can then rely on storage to help with intermittency. But the hurdle also presents an opportunity: finding uses for all that extra electricity.
In the absence of transmission
To some extent, the issue of oversupply is of our own making. More and better grid connections would allow developers to send excess electricity further afield, balancing it across wider geographies than the current grid allows. But transmission backlogs have become a notorious snag for developers as more projects crowd the grid. So companies are having to get creative.
“When there’s not enough transmission to get that energy to market, it’s bad for the generators; it’s bad for the customers; it’s bad for everybody,” said Sheldon Kimber, CEO of Intersect Power, which owns solar and storage projects in California and Texas.
Batteries are the obvious choice for developers aiming to ease congestion and shift renewable capacity to other times of day. But today’s storage options — largely lithium-ion batteries, which have about a four-hour storage maximum and are also in demand for electric vehicles — can only soak up so much electricity, and long-duration batteries remain too expensive for widespread use.
Addressing those challenges is baked into the business plan for Intersect, says Kimber, as it looks to connect its projects to specific demands rather than general power contracts.
“We need to be trying to focus on making products, if you will, whether it be a data packet, or a molecule of hydrogen or a molecule of ammonia,” said Kimber. “If you do that, you put yourself in a much more flexible position because you’ve got these onsite uses that will use all of the energy that you produce.”
Kimber believes six technologies have the most promise for using the coming flood of cheap renewable electricity: desalination, data centers, fuels like green hydrogen, direct air capture, widespread EV charging, and heat energy for heavy industry.
That latter area is a large focus for Rondo Energy, the company behind the brick “battery” at the California ethanol plant. Manufacturing steel, cement, and chemicals requires high heat, which today comes mostly from fossil fuels. Rondo projects heat bricks during the day, when solar electricity is plentiful, then discharge them when a factory needs to power its kilns. In the future, the startup is considering linking up to wind and solar projects behind-the-meter, potentially speeding up renewables projects that have long been mired in a lengthy interconnection backlog.
“It’s one of the big, great development opportunities of our time for developers who have projects they want to build that are just stuck,” says Rondo’s CEO John O’Donnell, who previously worked at GlassPoint Solar, a concentrated solar power developer.
Avangrid, too, is exploring behind-the-meter applications for excess renewables, but has focused on areas that it views as simpler to interconnect. For instance, in the last several months Avangrid has bid its projects in the Pacific Northwest into the Western Energy Imbalance Market to send excess generation to areas of higher demand, which has helped the developer reduce curtailments there.
“Consumption is often not in the places where the renewable generators are,” said Brian Faist, Avangrid’s vice president of renewable origination. “Anything that can align consumption or load with generation is the key to avoiding congestion, curtailment, and allowing more renewable energy on the grid.”
Urging conservative developers to bet big
Faist and Chante said Avangrid has also been working to promote EVs and the production of green hydrogen, which can be used both for fuel cells that produce electricity and as a liquid fuel. Last October, the developer announced a joint agreement with utility holding company Sempra to explore the development of large-scale green hydrogen projects. They haven’t yet announced any commercial projects.
Charging vehicles and producing green hydrogen (depending on its end use) are among the most efficient ways to use excess renewable energy, according to Tarroja, who co-authored a 2019 paper on how to prioritize end-uses for excess renewables to minimize costs and maximize reductions in greenhouse gas emissions. Any use designed to absorb extra renewable electricity should be evaluated on three elements, Tarroja says: its efficiency, the climate impact of the energy the electricity would replace, and the flexibility of the load that it powers.
Electric vehicles do well on all three, depending on the charging scheme used. In a 2023 paper modeling flexible EV charging, researchers showed that utility-controlled charging could decrease emissions from charging by 7%, versus unrestricted charging.
As more Americans buy EVs, charging all those batteries has the potential to strain the grid. But if drivers opt into smart charging, they could instead provide an outlet for surplus renewables. In the future, vehicle-to-grid technologies could even allow drivers to discharge batteries at times of high demand — assuming, that is, that drivers are willing to occasionally give up control of their batteries for the good of the grid, which Tarroja said is an open question at this point. Utility interest could also pose barriers for the vehicle-to-grid adoption, which has long lagged.
Meanwhile, green hydrogen is perhaps the buzziest technology angling to absorb a glut of renewable generation, based on a flood of interest from utilities and developers. Like Avangrid, Intersect has invested in collaborations in the space; in 2021, the company joined up with startup Electric Hydrogen to promote renewable hydrogen projects, though none has been publicly announced since.
As of May, developers worldwide had announced more than 1,000 hydrogen projects, according to a Hydrogen Council assessment. These represent $320 billion in investments through 2030. Ninety-one of those projects are slated to use renewable energy, which would produce the most climate-friendly type of hydrogen.
Both Intersect and Avangrid said they consider climate impact when selecting technologies to optimize the use of electricity from their projects, but money is also a big factor. Avoiding curtailment is reason enough for some to consider these projects, but further incentives could encourage more movement. For instance, Kimber noted the need for market mechanisms to compensate longer-duration storage technologies to spur more developer interest in those applications.
The development community is conservative by nature, so it will take some clear financial benefits before many companies make a habit of foregoing traditional power purchase agreements to make use of excess renewables.
Project owners can lose revenue when electricity is curtailed, but some contract types still generate returns when supply exceeds demand, said Nelson Nsitem, an energy storage analyst at Bloomberg New Energy Finance. And detailed modeling allows developers to estimate how often curtailments are likely to happen, which can then be baked into power purchase price. Though contract agreements vary, curtailments would most likely have to be significant and unexpected to cut into the bottom line — or the prospect of new industries must be enticing enough to encourage investment.
Today, Faist at Avangrid still sees transmission buildout as the most significant solution to reducing curtailment.
Kimber, though, thinks waiting for that type of fix is a risk. Avoiding — or at least limiting the impact of — regulatory constraints, he said, could bring about an impactful solution more quickly: “There is no Eisenhower-style, massive build-out of transmission coming to save us.”
Clarification: This story was updated on October 17 to clarify that Avangrid bids all of its Pacific Northwest projects into the Western Energy Imbalance Market, which then makes use of the excess.
