As hybridisation and changing grid and market conditions redefine the scope of asset performance management, renewables project services provider 3E’s Anouk Hut looks at the growing importance of physics-based modelling and integrated digital infrastructure.
This is an extract of a feature article that originally appeared in Vol.43 of PV Tech Power, Solar Media’s quarterly journal covering the solar and storage industries.
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Congested grids, frequent curtailment, hybridisation and rapidly shifting market dynamics have
made asset performance management far more complex than it used to be. Where increased energy production once guaranteed higher revenue, today it can actually be more profitable to shut down production entirely to avoid exposure to negative pricing.
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If curtailment isn’t a challenge for you yet, it soon will be. And if you’re still relying on classic performance metrics, like the performance ratio (PR) or ASTM E2848-based evaluations, you’re likely getting an incomplete, even misleading, view of your plant’s true performance. It’s time to rethink how we assess and optimise PV plant performance in this new, market-driven reality.
The hybrid reality: why asset performance management must
evolve
Not long ago, you were either managing photovoltaics (PV) or wind power. Today, chances are you’re dealing with both, plus battery energy storage systems (BESS), often integrated within the same project.
Hybridisation is no longer an exception; it’s become the industry standard, especially in regions battling grid congestion. Grid connection points are being reengineered with added storage capacity to help mitigate curtailment risks and navigate exposure to fluctuating market prices. This trend extends beyond PV: more and more wind farms are being hybridised with PV and BESS to maximise asset utilisation and revenue flexibility.
However, with this flexibility comes a new level of complexity:
- More intricate system design and
integration challenges - Expanded IT/OT infrastructure
requirements - Greater coordination across multiple
internal and external stakeholders - New operational workflows impacting
both technical and financial teams
In this article, we propose an alternative methodology for structuring interactions with both internal and external stakeholders involved in managing a curtailed portfolio: leveraging a physics-based digital twin as the reference model. This approach offers more accurate, transparent and actionable insights for technical performance assessment, financial forecasting and ensuring contractual compliance.
You can’t optimise what you can’t trust: the new scope of asset
performance
As plants become exposed to dynamic market and grid conditions, increasingly complex control mechanisms and a mix of technologies, the scope of an asset manager broadens. This broadening is not just technical; it includes managing a web of internal and external stakeholder interfaces, spanning financial performance, technical KPIs, contract negotiation and grid coordination.
In the following sections, we’ll break down how this changing context affects PV asset management across four key dimensions: technical and commercial, both at the internal company level and externally, regarding, for example, grid, O&M and EPC contractual arrangements.
Technical KPIs (internal): hybridisation and curtailment blur visibility on underperformance
Traditional PV performance KPIs typically centre around irradiation, capacity and system output. Intentional power control events, triggered by grid or market signals, are often not included in the
equation. When ignored, these events can misleadingly appear as plant underperformance. In Europe, the PR has long been the dominant KPI, comparing actual energy output to expected output based on solar irradiation. Curtailment reduces actual output and therefore negatively impacts PR.
In the United States, standards by NREL and ASTM too, are often ill-equipped to address external variability and operational diversity, leading to inaccurate performance assessments.
But the issue goes deeper: under frequent curtailment, operators may lose visibility into the true health of
their assets. DC-side issues, such as degradation or string-level faults, can go unnoticed, leading to long-term performance losses.
While the industry has introduced exclusion periods in contracts to account for curtailment, this approach obscures a clear view of performance. In high-curtailment countries like the Netherlands, where grid congestion is common, these exclusions become frequent, resulting in unreliable PRs, increased manual work to differentiate between curtailment and actual underperformance, and burdensome reporting.
Furthermore, standard availability KPIs may unintentionally discourage optimal maintenance scheduling. For instance, they fail to incentivise performing O&M during negative price periods, precisely when such interventions would be least disruptive and most cost-effective. This disconnect between operational and
market incentives underscores the need to redefine availability metrics.
Commercial KPIs (internal): business plan parameters no longer meet expectations
How long did it take to build your 2025 energy budget? Across the industry, crafting a realistic business plan has become more difficult. Shifting subsidy schemes, rising market exposure and evolving
grid conditions have added volatility and reduced predictability.
Layer in hybridisation, and it’s safe to say financial forecasting today involves more headaches than it did five years ago. In addition, revenue is no longer derived from a single, predictable stream. With the decline of fixed PPAs, asset owners now rely on revenue stacking, combining spot market sales, imbalance
markets and grid services. Each stream responds differently to market or curtailment signals, making forecasting increasingly complex.
These dynamics complicate the estimation of long-term revenues and financial KPIs like the investment performance ratio (IPR) and operating performance ratio (OPR). If these parameters don’t accurately reflect market realities, the result is unrealistic objectives, missed KPIs, ROI disappointments and a distorted view of performance.
Business plans must, therefore, evolve into living models that are flexible and regularly updated to reflect the everchanging energy landscape. Static annual budgets are no longer sufficient for sound asset management or transparent investor communication.
Technical KPIs (external): lengthy liquidated damages discussions
Let’s extend these internal challenges to external stakeholders: the performance landscape is shifting, and this has direct implications for contractual agreements. Take traditional EPC and O&M contracts, for example. These often specify guaranteed PR and availability, energy yield targets and, more recently, response and resolution times.
Traditional EPC contracts will include performance guarantees (PR or ASTMbased) that are derived from a yield model of the actual design of the asset. In this yield model, the presence of curtailment conditions is mostly not taken into account, resulting in performance guarantees that are not really representative of
the actual operating conditions of the plant.
Common practice in EPC contracts is to exclude curtailment periods from performance guarantee calculations. This can, however, result in the evaluation of the performance guarantees during
limited periods that again can be less representative of the long-term operating meteorological conditions for which the performance guarantee was defined in the design and contracting phase: e.g.
low irradiation conditions or start-up periods. The result is that the investor and EPC contractor start discussing liquidated damages and the end of the contract based on KPIs that merely represent
the purpose of contractual guarantees and often end up in lengthy discussions on exclusions and actual performance. This drains energy and impacts on the relationship between buyer and supplier.
Similar situations can occur in O&M contracts with performance guarantees or availability formulas that don’t take curtailment into account properly.
About the author
Anouk Hut is head of product management at 3E. With a background in SaaS product management across renewables and supply chain sectors, she focuses on building scalable and user-centric digital solutions. After joining 3E in 2023 as product manager for BESS and flexibility, she now leads the product management team, driving the roadmap and development priorities of 3E SynaptiQ.
