I would suggest that the problem of 'variability' of renewables is overstated, geographic dispersion helps a lot and the grid deals with constantly varing loads, already. What we need to accommodate more renewables is 'load following' plant, typically small gas turbines. What is in the way is so called baseload plant such as coal (and nuclear). These plants need to run as often as possible to pay off mainly capital costs (as does wind).

And before that, we will need more transmission lines. Wind technology is ready now and there is a lot of farmland in Australia with plenty of it. However, transmission lines do need to be built to take this energy to the major loads - cities and major industrial areas. And someone needs to pay for it. In the good old days when the state owned fully vertically integrated utilities, people just went out and built those lines to Collie, Hunter Valley, La Trobe Valley etc on low or no interest government loans. So on top of not paying for the pollution produced, water consumed and depleting non renewable resources, coal also enjoys these having costs 'grandfathered'. Level playing field, whassat?

PV, of course, enjoys the benefit of providing power during the day and at load. No such transmission lines are required. However, they are still probably about 5 times the cost of big wind per kWh generated (of course, wind is anytime and has to be imported from country areas). Mind you, by 2010 this could all change, the global output could be in the order of 26GW - it is now around 5GW - by 2010. This is outrageous but Rogol explains why he believes it will happen - Photon Magazine.

The fact that we hit 100% wind penetration on the Denham system means it can be done. The question, of course, is how it can be scaled up and how much it will cost to do it.