Let your wind blow freely
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Article Type
Sustainability Soapbox
Topic
Responsible Investing
Published
September 10, 2025
Read time
4 mins
Author
Rhydian Campbell
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In early August, Storm Floris swept across Scotland with gale-force winds, driving record-breaking output from wind farms. Yet much of that clean energy never reached homes or businesses. Grid bottlenecks meant NESO (the grid’s post-nationalisation name) had to pay wind farms to stop generating, while simultaneously paying gas-fired plants elsewhere to ramp up in order to keep the system balanced. All these constraint payments ultimately get passed to consumers. This practice – known as renewable curtailment – isn’t just a weather-related anomaly. It’s a structural issue rooted in decades of underinvestment in grid infrastructure, now colliding with the rapid rise of renewables.

 

While dramatic weather events like Storm Floris highlight the issue, they expose the ongoing structural challenge of insufficient grid capacity to handle growing renewable generation.  In the first half of 2025 alone, wind farms in northern Scotland were paid to curtail nearly 40% of their potential output, wasting 4.6 terawatt-hours of clean electricity1 and costing £117 million. And this isn’t just a UK problem. EU analysts warn that by 2040, up to 310 TWh of renewable electricity could be curtailed annually due to grid congestion2 - roughly half of all the wind and solar power the EU generated in 2022. Even China, despite its modern grid and massive investment in renewables, saw solar curtailment jump to 5.7% in early 2025, prompting a record ¥650 billion ($90 billion)3 pledge to expand ultra-high-voltage transmission lines.

 

Without solutions, much of our green power will remain stranded, perpetuating narratives that renewables “overwhelm the grid”, cannot provide reliable 24/7 power, or are too expensive to produce. High curtailment also directly cuts into generators’ revenues, undermining the economics of clean energy.

 

The good news is that this challenge can be turned into an opportunity. Solving curtailment requires multiple solutions – each a potential growth area for investment, backed by supportive policies. Broadly, the opportunities fall into supply and demand side measures:

 

Supply-Side Solutions

 

Grid Expansion and Upgrades – The most direct fix is to strengthen and extend transmission networks - moving green power from where it’s generated to where it’s needed. This includes building new high-voltage lines (including subsea interconnectors), upgrading existing corridors, and deploying smart grid technologies to optimize flow.

 

Governments are responding. The UK has announced its biggest electricity network upgrade in decades, aimed at slashing constraint costs. Across Europe, planners envision a one-third increase in grid length by 2040, with multilateral projects like the North Sea offshore grid connecting countries and smoothing regional imbalances4.

 

Investor Opportunity: Companies involved in transmission infrastructure - cable manufacturers, engineering firms, utilities - stand to benefit from this policy-backed wave of investment.

 

Energy Storage Deployment – Curtailment often happens when supply outpaces demand in real time. Storing surplus energy for later use transforms waste into value. This opens investment in utility-scale batteries, pumped hydro, and emerging long-duration storage technologies. Battery Energy Storage Systems (BESS) are scaling rapidly as costs fall5. Meanwhile, pumped hydro is making a comeback, with new facilities proposed in Scotland and Wales to absorb excess wind power6. Technologies like flow batteries, compressed air, and hydrogen-to-power are also gaining traction.

 

Investor Opportunity: Storage is the enabling backbone of a renewable-heavy grid. It offers returns from energy and balancing markets while protecting the value of renewable assets.

 

Demand-Side Solutions: Smarter Consumption

 

Not all solutions require concrete and steel. Smarter consumption can reduce curtailment by aligning energy use with renewable generation patterns.

 

Dynamic pricing, flexible industrial loads, and strategic siting of energy-intensive operations (like data centres or hydrogen electrolysers) near renewable hotspots can help absorb surplus power. While investment opportunities here are less direct, they’re emerging as part of broader energy system innovation.

 

Investing in a Flexible, Resilient Grid Future

If issues of curtailment are proactively addressed, the energy transition should advance more efficiently and profitably. Allowing green power to flow freely or be stored for later use means consumers get more low-cost, clean electricity and generators earn more consistent returns. High curtailment rates today are a clear signal of where strategic investment is needed, and where responsible investors can find growth opportunities while supporting climate goals. In many ways, grid congestion and flexibility shortfalls are becoming a business opportunity. By directing capital toward critical grid infrastructure, storage projects, and smart demand solutions, investors not only address a major bottleneck, de-risking renewables, but also tap into new revenue streams created by the clean energy transition. The payoff is twofold: lower energy costs and improved energy security for society, and attractive returns and a more reliable growth trajectory for those investing in the backbone of a net-zero energy system. Curtailment is, correctly, interpreted as wasted potential, but the process of mitigating it is an opportunity in clean energy investment.

 

 

1 Scottish wind farms paid not to generate nearly 40% of potential electricity

2 https://ease-storage.eu/wp-content/uploads/2024/10/1.5-Georg-Thomassen-ESGC-2024.pdf

3 https://www.power-technology.com/news/china-renewable-energy-curtailment/?cf-view

4 https://www.ofgem.gov.uk/press-release/ofgem-approves-initial-ps24-billion-operate-and-maintain-critical-gas-networks-and-upgrade-britains-electricity-supergrid

5 https://www.rabobank.com/knowledge/b011485609-battery-energy-storage-systems-in-europe

6 https://www.sserenewables.com/news-and-views/2025/03/sse-and-gilkes-energy-submit-plans-for-new-pumped-hydro-storage-project-in-the-great-glen/

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Author

Rhydian Campbell
Responsible Investment Associate
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