Hours per year, who calls them, and whether curtailed hours are billed. The clause that decides how much of your capacity you really get.
You signed for a rate and a capacity figure, and the fleet has been running for a season. Then the first hot stretch of summer arrives and the machines go quiet for hours at a time, with no explanation beyond a notice that curtailment has been called. If this is the first time you have seen the clause in practice rather than on paper, the question to ask is not whether curtailment happened. It is whether the contract capped how much of it could happen, and whether you are paying for the hours you did not run.
Curtailment is not one thing, and who can call it varies
The word covers several different triggers, and they behave differently.
- Grid curtailment, called by the transmission operator or utility because the network itself needs load reduced, usually for reasons unrelated to price.
- Price-based curtailment, where the host or the underlying power agreement steps load down when the market price crosses a threshold.
- Economic curtailment, where the host chooses to reduce load because running it is no longer worthwhile at the current spread, independent of any external signal.
- Operational curtailment, for planned maintenance or a safety event at the site itself. Unplanned faults count as downtime, not curtailment.
These sit in different parts of an agreement, and a contract that caps one does not necessarily cap the others. Before you assume a curtailment cap covers everything, check which of the four types the cap names.
The distinction matters most between the first two and the third. Grid and price-based curtailment are, at least in principle, verifiable against a third party: a transmission operator's own record or a published market price. Economic curtailment is a decision made inside the host's own business, and the only record of it is whatever the host chooses to keep and share. That does not make it illegitimate. A host running a real site has real economics to manage. It does mean the clause governing it deserves more scrutiny, not less, because there is no outside reference to check it against.
For each type above, the agreement should say who has the authority to call a curtailment event, and how much notice you get before it starts. Grid events sometimes arrive with very little notice because the utility itself is reacting to conditions in real time. Economic curtailment, by contrast, is a decision the host is making on their own schedule, and there is no reason that decision cannot come with more notice than a grid event does. If the agreement treats every category the same way on notice, ask why, because the constraints behind them are not the same.
The annual cap, and what it is measured against
This is the clause that decides your realistic output for the year, more than the headline rate does. Look for a specific number of hours per year, and check three things about it: whether the cap applies per event or in total across the year, whether all four curtailment types count against the same cap or have separate limits, and what happens once the cap is reached. An agreement that caps grid curtailment at a stated number of hours but leaves economic curtailment uncapped has not really set a ceiling at all, because the host can curtail for economic reasons as often as the spread justifies it.
If the agreement does not state a cap at all, that is itself the answer. Get a straight statement of it in writing rather than inferring it from silence.
It also helps to ask how the cap is tracked once the year is underway. A stated ceiling in hours is only useful if someone is counting against it. Ask whether curtailed hours are logged as they occur, whether you can request a running total partway through the year, and what happens in practice once the count reaches the limit. An agreement can state a cap clearly and still leave the tracking of it to an honour system, which is a different level of protection than a cap that is actively metered and reported.
Billing during curtailed hours
Separately from the cap, check whether hours you are curtailed are billed as if you had run. Some structures bill a minimum draw or a capacity charge regardless of actual consumption, which means a curtailed hour still costs something even though it earned nothing. Others bill only for the load delivered, so a curtailed hour is a lost hour of output but not an additional charge. Ask directly which model applies, because the same curtailment cap produces a very different year depending on the answer, and it is exactly the kind of detail that a summary conversation glosses over in favour of the headline rate.
Notification, logging and proof
When curtailment does happen, you want a record that is independent of memory and independent of a single party's account of events. Ask how you are notified, whether that notification includes a timestamp and expected duration, and whether the host keeps a log you can request. If your own monitoring shows draw per unit, that record and the host's log should agree, and checking them against each other after the first few events is a reasonable way to confirm the process works the way the agreement describes before you need it to matter in a dispute.
What to ask before your next agreement, or your current one
Go back to the agreement and find the curtailment clause specifically, not the general power section around it. Confirm which of the four types it covers, whether there is a stated annual cap in hours, whether that cap is shared across categories or separate, and whether curtailed hours are billed. If any of those answers is missing, ask for it in writing rather than assuming the silence favours you. Our hosting rate page puts these curtailment questions next to the other ones that make two offers comparable, and the ASIC hosting agreement guide walks through where this clause sits alongside the rest of the contract.
