Unintended consequences of curtailment cap policies on power system decarbonization

As countries pursue power system decarbonization, a well-intentioned strategy being pursued in jurisdictions like China is the strict integration target, often in the form of a curtailment cap. The effects of these curtailment caps have not been systematically studied. Here, we evaluate the effects of these caps on the decarbonization of one provincial power system using a capacity expansion model. Results reveal that curtailment caps yield deleterious effects that do not align with the stated goals of these policies. Capping curtailment significantly increases storage capacity (+43% with a 5% curtailment cap) and reduces renewable capacity (-17%). Even with the increase in flexible storage capacity, the policy still jeopardizes power system reliability by increasing occurrences of over or under generation. It also suppresses power generation from hydropower and reduces energy storage utilization while increasing fossil fuel utilization. Capping curtailment increases economic costs (+6% with a 5% curtailment cap) and CO₂ emissions (+7%).