Solar Curtailment in Australia's NEM Reaches Crisis Levels | Why Hybrid EYA Changes Everything

In theory, solar curtailment shouldn’t exist. If the sun is shining and panels are producing, that energy should flow to where it’s needed. In practice, it often doesn’t.

Curtailment occurs when renewable generators are forced to reduce output because the grid cannot accept the energy at that moment. In Australia’s National Electricity Market (NEM), curtailment is now a defining operational reality for many solar projects, particularly in regional areas where network limits are increasingly binding.

According to Australian Energy Market Operator (AEMO)'s 2025 Enhanced Locational Information (ELI) report, grid-scale solar generation across the NEM averaged 4.5% curtailment in 2024. That headline number understates the problem. Several utility-scale solar plants recorded curtailment well above 25%. More alarmingly, analysis of hypothetical new 300 MW solar developments show most will have a curtailment rate of more than 35% by 2027, with some locations pushing beyond 65%.

The impact is not evenly distributed. Curtailment is concentrated in areas such as western New South Wales and north-west Victoria, where large volumes of new generation are connecting to networks originally designed to serve local demand, not export energy at scale. As renewable capacity continues to outpace transmission upgrades, congestion and voltage constraints are becoming structural features of the system rather than temporary inconveniences.

Co-located battery energy storage is often positioned as the solution. In reality, it only works when the solar, battery, load, and grid are designed and analyzed as a single system.

That is where Hybrid Energy Yield Assessment (Hybrid EYA) changes the conversation.

What is Hybrid EYA?

Hybrid Energy Yield Assessment models solar and battery storage as a single integrated system, not as separate assets that happen to share a connection point.

Traditional Approach

• Calculate solar generation

• Model battery arbitrage separately

• Sum the two revenue streams

• Subtract generic curtailment (2–5%)

• Assume load absorbs excess

Hybrid EYA

• Model solar + BESS + load + grid simultaneously

• Capture battery impact on export capacity

• Track state-of-charge evolution

• Identify when/why curtailment occurs

• Optimize BESS for actual constraints

Why This Matters: In constrained networks, battery behavior changes grid constraints, and grid constraints change battery behavior. Traditional sequential analysis misses these feedback loops entirely.

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‍How Co-Located BESS Can Address Curtailment

When designed using Hybrid EYA methodology, battery energy storage systems can

1. Manage  renewable energy output during curtailment periods by absorbing excess generation when grid constraints bind

2. Reduce voltage-driven curtailment through proper power rating selection that minimizes voltage rise during charging

3. Shift generation to high-value periods by storing curtailed energy and dispatching when export capacity is available

4. Provide grid services that relax system security constraints, particularly through grid-forming capability

The key is understanding which curtailment is recoverable through BESS optimization versus structural curtailment requiring transmission upgrades.

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Key Design Principles

Battery Duration vs. Power Trade-offs

• In voltage-constrained networks, lower power ratings can reduce voltage rise during charging, preserving export capacity for solar

• Higher energy capacity (longer duration) delays state-of-charge saturation, maintaining charging headroom during extended high-solar periods

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Charge Window Optimization

• Avoid simultaneous peak solar generation and high-rate battery charging during voltage-constrained periods

• Split charge windows to capture curtailed energy during afternoon shoulder periods when constraints ease

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Control Strategy Design

• Voltage-aware charging that reduces battery power when network voltage approaches limits

• SOC targeting that maintains headroom during peak curtailment risk windows

Counterintuitive finding: In many constrained networks, reducing battery power rating while increasing duration improves curtailment mitigation. This is only discoverable through hybrid modeling that captures voltage-curtailment interactions.

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Key Takeaways

• Solar curtailment in the NEM is reaching crisis levels, with AEMO forecasting 35-65% curtailment rates for new projects in constrained regions by 2027

• Co-located BESS designed using Hybrid EYA can materially reduce curtailment by addressing the actual constraint mechanisms at each location

• Hybrid EYA models the system as it operates, capturing interactions between battery behavior and grid constraints that sequential analysis misses

• Energy balance accuracy doesn't guarantee performance accuracy. A project can have perfect load-generation alignment annually while experiencing material hourly curtailment

• Battery optimization requires understanding when and why curtailment occurs, not just how much energy is available

• In constrained networks, duration matters more than power. Delaying state-of-charge saturation beyond peak curtailment periods is often more valuable than high charge rate

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When to Use Hybrid EYA

Hybrid EYA is essential for any solar + BESS project where:

• Export limits are less than peak generation capacity

• Network is voltage-constrained (common in distribution-connected projects)

• Project is located in high-curtailment regions (western NSW, northwest Victoria, South Australia)

• Load profiles have temporal mismatches with generation

• Battery sizing and control strategy will materially affect curtailment

For projects in regional Australia and other constrained networks, hybrid EYA should be standard practice, not an exception.

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About the Data: Curtailment forecasts sourced from AEMO's 2025 Enhanced Locational Information (ELI) report. Project example represents typical curtailment patterns observed in constrained distribution networks