Photovoltaic curtailment and compensation in Southeast Asia: are operators paid?

Curtailment means your solar plant is forced to reduce or stop feeding in even when the sun is shining, usually because the grid is congested or midday supply exceeds demand. In most of Southeast Asia there is still no harmonised, guaranteed compensation for grid-ordered curtailment — so the practical answer for many operators today is: often little or nothing, which is why the region's focus is shifting from claiming compensation to avoiding the loss with storage.

In most Southeast Asian markets, grid-ordered (system-security) curtailment is treated as an operational instruction from the utility rather than a compensable event, unlike the settlement rules maturing in parts of Europe. Whether you are paid at all depends on your individual Power Purchase Agreement (PPA) with the single buyer — typically EVN (Vietnam), PLN (Indonesia), TNB (Malaysia), EGAT/MEA/PEA (Thailand) or the NGCP-dispatched market in the Philippines. If your PPA does not contain a 'deemed generation' or take-or-pay clause covering curtailment, you generally absorb the lost output yourself.

Vietnam is the reference case. Feed-in tariffs drove solar from almost nothing to roughly 16 GW of PV by early 2021, far faster than transmission could handle. During 2020–2021 EVN repeatedly curtailed solar and wind plants — especially in the sun-rich south-central provinces — because of grid congestion and low midday demand. Many operators were not compensated for that lost generation, and disputes over whether curtailment counts as 'force majeure' or a compensable event became common. Power Development Plan 8 (approved 2023) prioritises transmission and storage precisely to reduce this waste.

The pattern mirrors Europe's solar glut: heavy midday PV output, limited flexible demand, and grids that were not built for one-directional bulk solar. As the Philippines' WESM spot market and Malaysia's Large Scale Solar (LSS) auctions add capacity, midday oversupply and low or floor prices appear more often. Without flexibility, each extra megawatt of solar increasingly produces energy that is either curtailed or sold at value-destroying prices — the same dynamic already visible in European markets like Hungary and Bulgaria.

Because payment for curtailment is not guaranteed, the durable strategy is to stop losing the energy in the first place. A battery (BESS) absorbs the cheap or curtailed midday surplus and shifts it to the evening peak, when both demand and prices are highest. This turns a curtailment loss into an arbitrage gain, improves your PPA compliance, and — where ancillary or capacity services exist — can open additional revenue. Standalone solar is becoming harder to finance in oversupplied grids without a paired flexibility plan.

1) Read your PPA for any 'deemed energy', take-or-pay or curtailment-compensation clause and confirm how the off-taker logs curtailment events. 2) Meter and timestamp every curtailment instruction — undocumented losses are impossible to claim or optimise. 3) Model how much of your annual output falls in negative-, zero- or floor-price / congested hours. 4) Size storage to that surplus rather than to nameplate capacity. 5) Check national programmes (e.g. Vietnam's PDP8 storage push, Philippine and Malaysian storage pilots) before assuming curtailment is simply a sunk cost.

Before building or expanding, confirm the local grid operator's curtailment ranking (which plants are cut first), whether curtailment in your zone is congestion-based or system-wide, and whether your connection point is already congested at midday. In fast-growing corridors, a plant that looks bankable on paper can lose a meaningful share of output to curtailment within a few years unless flexibility is designed in from the start.

The Stromfee BESS system — connected

Charge DirectorAutomixerBESS EngineerPV Watcher