FAQ: To what extent should analysts account for insufficient transmission & distribution (T&D) capacity and curtailment?
T&D capacity and curtailment primarily affect volumes, versus net unit impact.
Transmission and distribution (T&D) refer to the infrastructure that moves electricity from where it is generated to where it is used.
Curtailment typically refers to situations where electricity is available to be generated—often from clean sources like wind or solar—but cannot be delivered to the grid or used, typically due to local congestion, limited grid capacity, or a mismatch between supply and demand at a given moment.
In the example of a renewable energy source displacing a fossil fuel energy source, GHG impact should focus on where the solution and incumbent are different, including in downstream inefficiencies. For example, if both a solar solution and a coal incumbent are equally affected by local grid congestion, that congestion is not relevant.
Investors will also need to decide how systems will change over time—because of the solution or independent of the solution. This will factor into how they quantify volumes over time. They can also actively invest in or support activities that improve T&D.
