Will a renewable-heavy energy system make electricity cheaper for ordinary consumers?

Yes—primarily, though not exclusively. The first mistake is to ask only what kilowatt-hours cost, rather than what energy services cost. Households do not want electricity per se; they want cold beer, hot showers, light, mobility, comfort. The cheapest kilowatt-hour is still the one you do not need to make, move, and pay for. So if bills are high in 2040, I would first inspect whether we optimized supply widgets or the whole system. Wind and solar are not intrinsically expensive technologies in the way incumbents often imply. Their fuel is free, their modularity drives learning, and when paired with efficiency, storage, and flexible load, they can reduce total system cost. But if you bolt them onto a grid, market, and regulatory compact designed for giant thermal stations running whenever they please, then of course you will get friction, curtailment, stranded assets, and perverse prices. A bad architecture can make anything costly. Vaclav Smil is right to insist on counting storage, backup, wires, materials, and time. Good—let us count all of it. Then also count avoided fuel-price volatility, avoided line losses from distributed resources, avoided peak capacity through demand response, avoided capital through integrative design, and avoided risk. Utilities are often rewarded for selling more electricity and building more rate base, not for delivering least-cost energy services. That is a design flaw, not a law of nature. So if household bills stay high, I would ask: did we reform incentives, or merely change generators? If we electrify inefficiency and preserve obsolete utility economics, we can make even cheap renewables expensive.

No, not “rather than.” That is too convenient. If household bills remain high in 2040, I would first ask a banal but indispensable question: what exactly are we counting? Retail electricity prices are not wholesale auction prices for a windy afternoon. They are the cost of a reliable system: generation, balancing, reserve margins, storage, transmission, distribution, maintenance, and the financing of all that hardware over decades. Amory is right that incentives matter. Of course they do. But he too quickly converts an engineering challenge into a managerial one. You cannot govern away intermittency. You cannot regulate the sun to shine after sunset or the wind to blow during a winter anticyclone. A renewable-heavy system can have low marginal generation costs and still impose high total system costs. That is the distinction many enthusiasts prefer to blur. Wind and solar modules may be cheap at the plant gate. That tells us little about the delivered cost of dependable electricity. Once penetration rises, integration costs rise nonlinearly: more storage, more long-distance transmission, more curtailment, more redundant capacity. These are not accounting tricks invented by hostile utilities; they are consequences of physical reality and temporal mismatch. Elinor would correctly remind us that institutions decide who pays. Yes. But institutions do not repeal material intensity or historical inertia. Energy transitions are slow because infrastructures are vast, long-lived, and capital hungry. If bills are high, blame bad market design where appropriate—but do not use that as an alibi to deny the intrinsic system costs of renewables at scale.

I would resist the word “blame” unless we first do some diagnosis. The relevant question is not cheaper in the abstract, but cheaper for whom, under what rules, and over what period. Household bills bundle many things: generation costs, network costs, stranded investments, reliability obligations, subsidies, cross-subsidies, and the allocation of risk. If bills are high in 2040, we should not leap to a single cause. So: yes, bad market design and utility incentives may be central. If utilities are rewarded for enlarging rate base rather than for achieving reliable, affordable service; if market rules socialize losses while privatizing gains; if communities bear transmission burdens without meaningful voice; if households are exposed to volatility while firms are protected by contract, then even low-cost technologies can yield high bills. Institutions shape outcomes. But I would disagree with any suggestion from Amory that institutional reform alone solves the problem, and I would disagree with Vaclav if he implies that physical costs settle the matter. Technology characteristics matter, but they are always mediated by rules-in-use. The same resource system can perform very differently under different arrangements. I would ask a sequence of questions: Who decides investment? Who bears balancing costs? Are there polycentric opportunities—municipal utilities, cooperatives, community choice, neighborhood storage, demand response—that match local knowledge and preferences better than a single centralized design? Are consumers merely ratepayers, or are they participants in governance? If ordinary households still face high bills, the likely answer will be mixed: some intrinsic system costs, yes; but also poor institutional fit, weak accountability, and badly aligned incentives. That is not incidental. It is often decisive.

If bills are still high, that is not proof my model was fantasy; it is evidence that many systems were redesigned halfway. Vaclav is right to insist on physics. I have always insisted on physics too—just the whole physics, not only the intermittency chapter. End-use efficiency, thermal storage, flexible loads, better buildings, smart charging, district resources, and integrative design are not institutional poetry; they are engineering. They change the load shape the supply system must serve, often more cheaply than adding central supply. Vaclav says you cannot govern away intermittency. Of course not. But you can often design it away from becoming costly. A negawatt is not intermittent. A well-insulated house with a smart water heater and a battery in the garage is not a passive victim of a winter peak. If you keep the old utility model—profit from throughput, earnings from rate base, socialized grid costs, consumers treated as captive load—then even cheap renewables get wrapped in expensive habits. So what share is unavoidable? Some. Wires cost money. Reliability costs money. Geographic diversity, balancing, storage, and reserves are real. But the large contingent share comes from how we choose to meet those needs. Do we build gold-plated central infrastructure, or procure distributed flexibility first? Do tariffs reward peak reduction, efficiency, and resilience, or punish self-provision and dumbly volumetric-rate everyone? Do regulators buy energy services or commodity kilowatt-hours? Elinor is exactly right that rules-in-use decide who pays. I would add: they also decide how much needs paying for in the first place. That is the leverage point.

I would not let Amory turn this into a morality play about wicked utilities obstructing elegant design. That is too easy. If household bills are still high under a renewable-heavy grid, then some share will indeed reflect bad regulation, poor tariff design, and foolish cost allocation. But a substantial share will be unavoidable because dependable electricity is not the same thing as cheap photovoltaic modules or wind turbines. This is the elementary confusion. Consumers buy reliability delivered second by second, in all seasons, during heat waves and winter lulls. As wind and solar shares rise, the system must pay for more balancing, more redundancy, more storage, more transmission, and more curtailment. These are not ideological inventions. They are physical requirements imposed by low power density and variable output. You can reduce them at the margin with better demand management, better buildings, better pricing. Fine. But you do not abolish them. Amory says a negawatt is not intermittent. True, but that does not answer the central question of large-scale supply adequacy. Efficiency is always desirable; it does not eliminate the need for a robust grid. He habitually underestimates the scale of legacy infrastructure and overestimates the speed with which households, appliances, buildings, and regulations can be synchronously redesigned. Elinor is right that institutions decide who bears costs. But first there must be costs to bear. If bills stay high, blame regulators where deserved. But do not mistake an institutional failure for proof that the underlying system was intrinsically cheap. In energy, wishful accounting is still accounting.

I would not let this be posed as a choice between “fantasy” and “physics,” because that framing conceals the institutional problem. The key question is: which costs are technologically necessary, and which are artifacts of the rules-in-use? Vaclav is right on one important point: there are real system costs in maintaining reliability under variable supply. No serious analysis should deny balancing, reserve, transmission, storage, or distribution costs. But I would challenge him if he treats those costs as if they arrive already assigned. They do not. Institutions determine whether they are minimized, by whom they are borne, and whether households have any capacity to respond. Amory is also right that design matters. But I would press him more than he presses himself. It is not enough to say distributed efficiency could have worked. Under what property rights, tariff structures, interconnection rules, financing arrangements, and decision processes? A “good design” is not a slogan; it is a set of enforceable rules, monitoring arrangements, and arenas for choice. If ordinary households still face high bills in 2040, I would suspect three failures. First, poor cost allocation: households paying for stranded assets, speculative overbuild, or risks they did not choose. Second, weak polycentricity: too few municipal, cooperative, and community-scale options for matching local conditions. Third, misaligned incentives: utilities rewarded for capital expansion rather than affordable service. So no, high bills would not by themselves prove Amory wrong or Vaclav right. They would prove we failed to build institutions fit for the technology and the communities using it.

The biggest driver of unnecessarily high household bills is still trying to run 21st-century resources with 20th-century rules. Vaclav is right that reliability is not free. But he keeps treating variability costs as if they are a fixed tax levied by nature. They are not. They are a design variable. What is irreducible? Some wires, some reserves, some balancing, some seasonal adequacy, some cyber and physical resilience. Fine. A reliable grid is a value, not a nuisance. But the size of those costs depends enormously on whether we first optimize the demand side. If you can flatten peaks, shift EV charging, preheat buildings, control water heaters, aggregate behind-the-meter batteries, and harvest efficiency, then the costly tail of the supply curve shrinks. That is not “abolishing physics.” It is using more of it. The costliest mistake is to treat consumers as passive loads and utilities as rewarded capital deployers. Then every reliability problem gets answered with another central asset, another rate-base opportunity, another socialized network upgrade. Cheap renewables then arrive wrapped in expensive choreography. Elinor asks the right question: which rules make good design real? Start with tariffs that price peaks and reward flexibility, performance-based regulation that buys delivered energy services rather than throughput, open access for distributed resources, and ownership structures—municipal, cooperative, community-scale, third-party—that let households share in value, not just bills. So yes: some costs are unavoidable. But the larger avoidable share comes from bad market architecture. If you design the whole system, renewables can make electricity cheaper. If you merely bolt them onto fossil-era institutions, don’t blame the wind turbine for the tariff.

I will be more specific. The irreducible costs are those required to maintain adequacy and stability when the weather is uncooperative. That means firm capacity for periods of low wind and low solar output, storage of sufficient duration, reserve margins, expanded transmission to smooth regional mismatch, voltage and frequency control, and inevitable curtailment when output arrives at the wrong time. These are not accounting conventions. They arise from the temporal mismatch between variable generation and demand. Amory still understates this. Flattening peaks, shifting EV charging, smarter water heaters, better insulation—yes, all useful. I have never argued against efficiency. But efficiency is not generation, and demand response is not a guaranteed substitute for multi-day or seasonal supply shortfalls. A household can preheat for some hours; it cannot negotiate with a dark, windless week. To imply that “design” can largely dissolve these costs is to confuse marginal improvements with system adequacy. Elinor is right that institutions shape allocation. Tariffs can lower peak demand, ownership can redistribute gains, cooperatives can reduce some overheads, regulators can avoid perverse incentives and stranded-cost dumping. Those are real, and they matter for household bills. But they work on top of physical requirements, not instead of them. So which is bigger? At low shares of wind and solar, bad rules can dominate. At high shares, the unavoidable costs of intermittency management, storage, transmission, redundancy, and backup become increasingly decisive. Ordinary consumers do not buy ideology. They buy reliable electricity, every hour of the year.

I would separate this into two questions, because they are too often collapsed. First: what costs are genuinely necessary to keep a reliable system? Second: what governance arrangements determine whether those necessary costs are contained, fairly shared, and open to local adaptation? Vaclav is correct that some costs are irreducible. If a system relies heavily on variable generation, then some combination of balancing, reserves, network investment, storage, forecasting, and backup capacity will be required. I do not think we gain anything by denying that. But I would oppose Vaclav if he lets that observation do too much work. Those costs do not come with a natural price tag already attached. Their magnitude depends on rules-in-use. Amory is right that demand-side coordination can materially reduce system cost. But I will press him again: such coordination does not happen because engineers wish it. It depends on tariff design, metering, interconnection rules, access for aggregators, financing for household retrofits, and organizational forms households can actually trust and join. So which is the bigger driver of high bills in practice? For ordinary consumers, very often it is institutional misfit. Households can end up paying not only for necessary reliability, but also for stranded assets, poorly sequenced investments, monopoly protections, inequitable tariffs, and the exclusion of municipal, cooperative, or neighborhood-scale solutions. That is not a law of nature. My answer, then, is diagnostic: the unavoidable costs are real, but high household bills are frequently driven more by governance failures than by variability itself. The remedy is not one ideal market, but polycentric arrangements fit to diverse places and users.