Ontario wind power companies have reached an agreement that will curb electricity output from wind turbines when there’s surplus power on the grid.

In return, the companies will get compensated for lost output, within certain limits.

The agreement puts an end to a dispute before the Ontario Energy Board that pitted the wind companies against provincial power agencies.

Until now, wind power has had almost unrestricted access to the power grid, under rules designed to encourage the development of renewable power in Ontario.

Wind power is especially tricky to deal with, because there’s a lot of it and the wind often blows strongest overnight or on weekends, when demand is low.

Nuclear plants also produce power regardless of market conditions, because most nuclear units are very difficult to control – they’re either on or off.

As more wind power floods onto the grid, the combination of wind and nuclear sometimes leads to power surpluses, forcing Ontario to sell power to its neighbours at a loss, or even pay them to take it.

The new rules will allow the Independent Electricity System Operator (IESO) to switch off the flow of power from wind turbines if there’s too little demand.

Wind operators will be compensated for some, but not all, of their lost output.

The Ontario Power Authority outlined a compensation model recently under which wind companies would have to absorb a certain portion of the lost output, but would be paid if the loss output exceeded certain limits.

(Other generators also get paid not to produce at times. Bruce Power is sometimes asked to cut the output from several of its nuclear units, but is compensated for the lost production.)

Controlling power output has become a pressing issue in Ontario as more and more renewable power connects to the grid. An additional 3,000 megawatts of wind power alone is due to come on stream in the next 18 months.

The IESO had estimated that coping with surplus power production will cost Ontario’s power system up to $200 million a year if market rules don’t change.