Curtailment: The Emerging Challenge in the Indian Grid

India’s electricity grid, once celebrated for integrating record renewable energy capacity, now faces a paradox — abundant green power being curtailed for lack of flexibility.
Curtailment, or deliberate reduction in renewable generation despite available capacity, is fast emerging as one of the biggest challenges to India’s clean energy transition.
This comprehensive blog explores the evolving causes of curtailment, its implications for system reliability and economics, and the urgent reforms required to align renewable growth with grid flexibility.

Understanding the Emerging Challenge of Curtailment

Curtailment of renewable energy (RE) — particularly wind and solar — is reported daily by Grid-India through its Variable Renewable Energy (VRE) reports. Table 8 of these reports shows state-level curtailments, including Rajasthan, Gujarat, and Maharashtra, while Table 9 highlights national-level curtailments under emergency Tertiary Reserve Ancillary Service (TRAS) instructions.
Such curtailment  outside TRAS represents direct revenue loss to generators and indicates structural inflexibility in the grid.

Historically, RE curtailment occurred due to:
• Transmission line constraints and outages causing N-1 insecurity in real-time operations.
• High-frequency periods with underdrawal by discoms trying to avoid Deviation Settlement Mechanism (DSM) penalties.
• Economic motives, especially when PPAs were expensive (above ₹5.50/kWh between 2019–21).

While the Ministry of Power’s “Must Run” rule 2021 attempted to curb discretionary curtailment, its enforcement remained weak. The years 2022–24 saw surging demand — peaking at 250 GW in May 2024 — driven by summer heatwaves and elections. However, the monsoon of 2024–25 brought a sharp reversal. Behind-the-meter rooftop solar reduced grid demand during solar hours, and over 50 GW of new ISTS-connected renewables overwhelmed system flexibility between 10:30 and 14:30 hours.  Frequency levels rose dangerously, forcing Grid-India to approach the Central Electricity Regulatory Commission (CERC) for authorization to curtail through TRAS during emergencies.
While ISTS-connected RE under TRAS remains financially insulated, intra-state RE often faces uncompensated losses.
Grid-India’s daily Ancillary Services reports further reveal that  thermal plants receive artificially low schedules during solar hours to maintain reserves for evening ramps. However, this Security-Constrained Unit Commitment (SCUC) process frequently leads to expensive generation being backed up while cheaper generation is reduced.

Curtailment based on Grid India data for 12 Oct.2025 

(https://webcdn.grid-india.in/files/grdw/2025/10/12.10.2025_NLDC_REMC_REPORT_285.pdf)

Interpretation:
- Solar dominated both generation and curtailment — about 20% of potential solar output was curtailed or backed down.
- Wind saw limited TRAS action and low curtailment (<10%). At ISTS level (TRAS down) total VRE curtailment  was around 40%.
- All-India, approximately 96 MU of renewable energy (≈16.7%) was curtailed on 12 Oct 2025 — driven by TRAS Down at large ISTS solar hubs such as Khavda, Bhadla, and Pavagada.
The crisis underscores the need for flexibility resources — storage, demand response, and dynamic dispatch mechanisms — to evolve alongside RE capacity.

The Way Forward — Managing Abundance, Not Scarcity

India’s power system was designed for scarcity. Now, as VRE penetration crosses 30% of instantaneous demand, the grid faces a flexibility deficit rather than a capacity shortage. Curtailment is no longer a local or technical anomaly but a national flexibility crisis.

1. Why the Present Market Design Is Inadequate
Over 85% of India’s generation remains tied to long-term PPAs with fixed schedules. DSM and ancillary mechanisms function as post-facto corrections instead of real-time balancing markets. Thermal plants lack incentives for flexible operations, while market-based scheduling is constrained. The SCUC mechanism, though necessary, often increases overall cost by reducing cheaper generation and ramping up costlier units to maintain reserves.

2. Flexibility Resources — The Missing Pieces
Three critical levers can address the flexibility gap:

(a) Storage as Capacity, Not an Add-On:
Battery Energy Storage Systems (BESS) and Pumped Hydro Storage (PHS) must be treated as firm capacity resources. Storage procurement should move from pilot tenders to market-linked capacity contracts where operators are paid for availability and ramping performance.

(b) Flexible Thermal Operations:
Coal plants must operate at 40–50% load and ramp at 3–5% per minute. Contracts should include flexibility payments to compensate cycling and part-load operations, similar to capacity charges.

(c) Demand-Side Flexibility:
Industrial and agricultural consumers can provide 5–10 GW of flexibility by responding to time-of-day (ToD) or real-time price signals. Smart meters and ToD tariffs are essential tools for this transformation.

3. Market Reforms for a Flexible Future
• Establish a Real-Time Flexibility Market (RTFM) for all flexibility resources.
• Implement co-optimization of energy and reserve markets to ensure renewables are dispatched first.
• Reform DSM (version 3.0) to reward flexibility and response to grid signals.
• Introduce Locational Marginal Pricing (LMP) to manage congestion transparently and guide investments in transmission and storage.

4. Regulatory and Institutional Imperatives
The Central Electricity Authority’s (CEA) Technical Standards must be revised to reflect high-RE operational needs.
Grid-India’s proposal for a unified “RE Curtailment Registry” is crucial for transparency.
Dynamic tariffs reflecting time and location value of energy are needed, and Grid-India must be empowered with financial and operational authority to manage TRAS and reserves through market mechanisms.

5. Transmission and Storage — The Twin Pillars
Delays in the Green Energy Corridors and inter-state transmission systems have stranded several gigawatts of RE.
Even with full evacuation capacity, curtailment will persist without sufficient storage. India needs at least 15–20 GW of grid-connected storage by 2030 to maintain frequency and absorb surplus RE.

6. Aligning Transition with Economics
Every MWh curtailed is a lost opportunity — economically and environmentally.
Curtailment increases total system cost, reduces carbon efficiency, and erodes investor confidence.
True decarbonization depends not just on installed capacity but on absorbed renewable energy. Without flexibility markets, 500 GW of RE by 2030 could remain underutilized.

7. A Cultural and Institutional Shift
India’s grid management must evolve from control to coordination. The future depends on transparency, data-driven decision-making, and incentives aligned with system performance.
This requires collaborative evolution among MoP, CERC, CEA, Grid-India, SLDCs, and discoms.

Conclusion
Curtailment represents the next frontier of India’s energy transition challenge. It is not the failure of renewables but the failure of system design to keep pace with them.
India must now move from building capacity to building flexibility — transforming curtailment from a crisis into an opportunity for innovation.

If managed wisely, this phase can redefine how emerging economies integrate large-scale renewables while maintaining reliability, affordability, and sustainability.