Large-scale wind and solar farms in Australia wasted approximately 7.2 terawatt hours of generated power in 2025, nearly double the figure recorded in the previous year. This unprecedented curtailment is attributed to grid constraints, the ongoing reliance on coal, and an influx of rooftop solar installations, which collectively limited the amount of electricity that could be sold into the grid. The curtailment raises concerns about future investments in renewable energy unless these issues are effectively addressed.
Curtailment occurs when renewable energy sources generate more power than the grid can accommodate. The 7.2 terawatt hours of unused energy in 2025 is significant, equating to roughly half the annual power needs of South Australia. The Australian federal government has set an ambitious goal of achieving 82 percent green power in the grid by 2030, making it essential to manage curtailment effectively.
Dylan McConnell, an energy systems researcher at the University of New South Wales, compiled the data and emphasized that curtailment is a common issue in renewable-heavy power grids. He noted that energy production tends to peak during the day when prices are low or even negative, while demand spikes in the evening when prices soar.
“Currently, it is a difficult risk to manage,” McConnell stated. “For developers, there is a co-ordination problem with other aspects of the transition, such as what other projects are coming in, when new transmission projects will arrive, and which coal plants will leave.”
The increase in curtailment can be attributed to two main factors: economic and physical limitations. During peak solar production hours, the supply often exceeds demand, leading to plummeting prices. Additionally, the infrastructure that connects generators to the grid has limited capacity. When this capacity is reached, renewable sources cannot deliver additional power, even if there is a demand for it.
The rise in curtailment in 2025 also coincides with the return to normal wind conditions following a less productive year. The Australian Energy Market Operator (AEMO) faces the challenge of balancing energy supply and demand, particularly during the daytime when demand is lower.
The Clean Energy Council, led by chief executive Jackie Trad, acknowledges the challenges posed by curtailment but insists they can be managed. “For generators, it reduces output and revenue certainty, undermining project economics and increasing financing costs,” she explained. Trad also highlighted that curtailment can hinder charging opportunities for energy storage systems, complicating the business case for new investments.
Curtailment is especially prominent in the National Electricity Market (NEM), particularly in Victoria and South Australia, where renewables represent a larger share of the energy mix compared to dispatchable sources like coal and gas. It tends to be more pronounced in spring and autumn, periods characterized by high solar output and moderated demand due to cooler temperatures.
In 2025, the curtailed power was almost evenly split between wind and utility-scale solar, despite wind energy contributing nearly double the overall power to the grid. Planned infrastructure projects, such as the VNI West cable connecting New South Wales to Victoria and the Energy Connect project linking South Australia to the eastern states, are expected to alleviate some of the congestion experienced in the NEM.
Energy storage solutions, such as hydroelectric facilities and batteries, also present a viable method to address curtailment. These technologies can store excess energy generated during the day for use in the mornings or evenings when demand and prices are higher. A spokesperson for AEMO reported that batteries account for approximately half of the 56 gigawatts of new energy projects currently in the pipeline, with 17 percent being solar and battery storage hybrids.
“AEMO’s analysis shows these storage and hybrid solar facilities have the potential to soak up excess renewable generation and then dispatch this energy when demand is high,” the spokesperson said.
The oversupply of renewable energy can also yield benefits, particularly during extreme weather events when demand surges for several consecutive days. Addressing the challenges of curtailment will be essential for securing the future of renewable energy investments in Australia.
