Grid Constraints: Unlocking the Full Value of Renewables
Grid Constraints: The Bottleneck Holding Back Renewables
At Renewable Advisory Experts, we think it’s important to address one of the biggest – yet often overlooked – challenges facing the energy transition: grid constraints.
It may not capture headlines like offshore wind auctions or record solar builds, but this is the issue that will ultimately determine whether clean energy delivers on its promise.
Global renewable deployment is accelerating. Back in 2023 alone, more than 500 GW of new capacity was connected worldwide. Yet much of that clean power never reaches consumers, because the grids designed decades ago simply weren’t built for it.
Think of it like a motorway designed for light traffic, now handling a capital city at rush hour. Congestion is inevitable.
What Do We Mean by Grid Constraints?
Every transmission line, substation, and transformer has a limit. Push the grid too far, and stability issues – overheating, voltage swings, frequency deviations – quickly appear.
When output from wind farms or solar parks exceeds what the network can absorb, system operators have little choice but to order curtailment. Turbines are turned down, panels are idled, and valuable clean power goes unused.
The impact is not only environmental – it’s financial. Curtailment costs are rising, and in some cases fossil-fuel plants must be dispatched elsewhere to maintain balance.
Why Wind Feels the Impact First
Wind power is often located in areas far from demand – offshore, on remote coasts, or across rural plains. Without sufficient transmission capacity, it is the first to be curtailed.
Texas: Despite billions invested in CREZ transmission lines, around 5% of wind output was curtailed in 2022. Without further reinforcement, that figure could more than double by 2035.
Germany: In 2023, 19 TWh of renewable power (mostly wind) was curtailed, largely due to bottlenecks moving power from the north to the south. This cost consumers over €3 billion.
UK: The B6 boundary between Scotland and England remains so constrained that curtailment costs could exceed £2 billion annually by 2030.
India: In Tamil Nadu, wind farms are regularly curtailed despite “must-run” rules – sometimes for grid security, but often due to financial or operational limits in local utilities.
Why the Grid Is Falling Behind
Three structural issues stand out:
Transmission takes time: Building new high-voltage lines can take 5–10 years, while renewable projects are often delivered in a fraction of that.
Insufficient storage and flexibility: Large-scale batteries, demand response, and hydrogen remain under-deployed, leaving few options to absorb surplus power.
Market and regulatory gaps: Planning for generation and transmission is poorly aligned, and existing market designs often fail to incentivise solutions to congestion.
The Cost of Inaction
In the U.S., congestion added more than $20 billion to system costs in 2022.
In Europe, redispatch and curtailment cost another €4 billion in 2023.
Ultimately, these costs flow through to consumers – while renewable energy potential is wasted.
What Needs to Change
There are proven solutions to grid constraints. The challenge is scaling them fast enough:
Transmission investment: Build more, and build smarter, with community engagement to reduce delays.
Grid-enhancing technologies: Dynamic line rating, power flow control, and similar tools can unlock hidden capacity in existing assets.
Storage and demand response: From batteries to flexible industrial loads, these provide the buffer needed to integrate variable generation.
Market reform: Pricing models that reflect congestion and fair compensation for curtailment can align incentives.
Integrated planning: Renewables, transmission, and storage must be developed together, not in isolation.
Unlocking the Full Value of Renewables
Grid constraints are no longer a secondary issue – they are one of the main bottlenecks holding back the energy transition.
Wind and solar will only achieve their potential if transmission networks, storage, and market frameworks evolve in step. At RAE, we see addressing grid congestion as the next frontier for the sector: ensuring every megawatt of clean energy is delivered efficiently, reliably, and at the greatest value to society.
