Ben, thanks for continuing the dialog. I look forward to listening to the podcast as soon as I can!. For now, a few brief reactions to the post:
You write: "[Wind and solar] don't fit in with an Econ 101, clearing-price, merit-order-dispatch market, since they don't respond to short term price signals."
This is a pretty strong thesis!! Also not one energy economists would support. I think this is where our friendly disagreement arises.
"[The merit order effect] will put a cap on [wind and solar] deployment at a level far below what we need them to achieve in order to decarbonize the planet. This is not a technical limit, but a self-imposed financial limit due to market design."
Again, no. The fact that wind and solar stop deploying at some point under sound market designs is a sign of the declining societal value of further renewables deployment. The fact that wind and solar stop deploying under a sound market design is precisely because it is cheaper to deploy something else to reach our climate goals.
Unfortunately, I really do think you are still substituting means for ends. I'll listen to the podcast as soon as I can (looking forward to it!) but from your post, it seems like we may still be talking past one another. Hope we can fix that soon.
If your thesis is that there simply is nothing else to deploy to reach our climate goals, that "wind and solar are the winners" because all other renewables are constrained and nuclear and CCS are off limits a priori, then wind and solar won't stop deploying. There is no alternative, so under a strict carbon limit, they'll keep deploying (and the costs of complying with the carbon limit will keep rising).
But if there are other alternatives, wind and solar will stop deploying once their marginal value is less than their marginal cost, which occurs exactly at the point when wind or solar become more expensive than other zero-carbon alternatives. And that's exactly what we should want as society. Forcing wind and solar past this limit only implies higher costs to reach the same goals -- in other words, a waste of resources that could be better spent on other societal goals (curing cancer, electrifying Africa, climate adaptation, buying whiskey etc.). That's my concern with substituting means for ends.
To be continued...