alt Hacker NewsAgreed. From first hand experience, even for regulated electricity markets, games get played to maximize profit per power generated that are directly making stability worse. Fixing these loop holes is hard for the regulator since they are instructed to encourage both increased renewable penetration and stability, despite traders/operators/producers not acting in good faith and just gaming whatever they can.
A healthy regulated will encourage maximizing profit for power and bring in competition which drives the cost down until energy is a commodity and the cost of electricity is actually based on the price of production and a small profit based on the cost of capital. Any situations that cause price spikes result in investment to harvest the difference.
The fact that you can add to the grid by installing solar and battery and connect to the grid in a single afternoon makes it pretty easy these days to have an elastic market that grows until you hit the limit of decentralized production vs. existing transmission architecture... but with the right equipment you can have community sized islands that can be much more immune to instability.