I think curtailment is inevitable soon in South Australia when the Victorians complete their new Solar and wind projects. Curtailment will reduce the capacity factor of generators and this will increase the cost/mwh because the fixed costs will be divided by a smaller denominator. If the wind goes to storage then the storage will consume electricity and distribute around 20 % less into the grid due to losses. The losses are then built into the cost which increases. If the storage is behind the meter the capacity factor will be reduced because of the storage consumption and will reduce the capacity factor. The more wind, the more curtailment, the more curtailment the lower the capacity, the lower the capacity factor, the higher the cost/mwh.
Most large manufacturing plants deal with this issue regularly so the concept is not new. I think more work needs to be done to ensure we are on the right path. Also this effect is not just a renewable issue and is already happening to the traditional generators.
