Jeju curtailment: the benefits of lowering minimum generation capacity
Quantifying how lowering minimum generation capacity thresholds in Jeju could reduce renewable curtailment by up to 70% and save ₩4.5 billion in fuel costs.
This study quantitatively analyses the effects of lowering minimum-generation capacity thresholds.
Background
In April 2024, an "output floor for operation below minimum capacity" was introduced for must-run units in Jeju, lowering the threshold. However, the level remains higher than overseas recommendations (20–40%), and on the mainland the discussion has not yet seriously begun.
Scope of Analysis
The study covers actual curtailment events in Jeju from September 2022 to March 2024, and analyses the effect had the April 2024 lower output floor been applied earlier.
Key Findings
| Scenario | Curtailment reduction | Fuel cost savings |
|---|---|---|
| April 2024 revised level | 17% (5,800 MWh) | — |
| Floor lowered to 20% | 70% (24,032 MWh) | up to ₩4.5 billion |
Policy Implications
These results indicate that lowering the minimum-generation capacity threshold is a key policy tool that can simultaneously reduce GHG emissions and cut costs.
By contrast, the Jeju renewable energy bidding market introduced in June 2024 superficially reduced curtailment, but in reality merely converted forced curtailment into market-based selective non-dispatch. This is hard to interpret as genuine improvement in renewable integration.
Policy Recommendations
- Establish a roadmap to lower the minimum-generation capacity threshold step-by-step toward international recommendations (20–40%)
- Disclose the basis of unit-level minimum-generation capacity calculations and the rationale for must-run designations, strengthening transparency and reasonable verification
- Apply the Jeju measure equally to the mainland system, and continue further lowering of Jeju's minimum-generation capacity threshold
Market reforms alone cannot fundamentally resolve curtailment. Structurally lowering must-run levels and minimum-generation capacity is the most direct and cost-effective way to expand renewable integration, strengthen system flexibility, and accelerate the energy transition.