Australia’s large-scale wind and solar farms were forced to waste a record amount of electricity in 2025, highlighting the growing challenges of balancing renewable generation with existing grid infrastructure and persistent fossil fuel output.
About 7.2 terawatt hours (TWh) of renewable energy was generated but not used last year — nearly double the figure recorded in 2024 — as transmission limits, negative pricing, and the rise of rooftop solar squeezed large-scale producers out of the grid.
The volume of unused electricity, known as curtailment, equated to roughly half the annual power needs of South Australia.
Analysts warned that unless Australia manages this constraint more effectively, the problem could slow down critical investment in new renewable energy projects.
The surge in wasted power follows an already sluggish year for new investment, leaving the federal government with a narrower path to meet its 2030 target of 82 per cent renewable energy in the national grid.
Curtailment occurs when renewable generators are either prevented or discouraged from feeding power into the grid due to market or network constraints.
It is typically driven by two interrelated factors: economics and physical capacity.
Economically, curtailment often happens in the middle of the day when solar generation peaks, and wholesale electricity prices sink to extremely low or negative levels.
Under such conditions, selling power can become unprofitable, prompting generators to voluntarily reduce output.
Physically, the issue arises when transmission infrastructure — poles, wires, and substations — reaches its maximum load capacity.
When that happens, energy producers are unable to move additional power, even if demand exists elsewhere in the grid.
The steep increase in curtailment in 2025 also reflected a return to normal wind conditions after a quieter wind year in 2024.
Market operators were frequently forced to cut generation during daylight hours to maintain grid stability, as they struggled to balance high supply against low daytime demand.
Two structural factors have worsened daytime oversupply: the continued operation of coal-fired power plants and the surge in rooftop solar installations across households and businesses.
Coal generators cannot easily switch off when prices fall below zero, maintaining output even when the energy market is saturated.
Simultaneously, rooftop solar systems (outside market control) flood local networks with additional electricity during daylight hours, leaving large-scale renewables to bear the brunt of curtailment.
In 2025, curtailment was most pronounced in Victoria and South Australia, regions with the highest concentration of wind and solar relative to dispatchable energy sources such as coal or gas.
Seasonal variations also played a part: most excess energy was curtailed in spring and autumn, when renewable generation is strong, but power demand is moderate due to milder weather.
The unused power was evenly split between large-scale wind and solar farms, despite wind supplying nearly twice as much electricity to the grid overall.
The Clean Energy Council has identified curtailment as a key challenge to improving renewable project economics and securing finance for future developments.
While curtailment is expected to remain a feature of renewables-heavy systems, addressing grid bottlenecks and accelerating investment in transmission and storage will be vital to ensuring Australia’s energy transition stays on track.