You make a number of valid points about the virtues of centralised transmission in accommodating large amounts of renewable energy, but you muddy the waters by treating large steam turbine generators and high capacity transmission as equally necessary in a workable system with a large contribution from variable output renewable sources like wind. The existing grid is useful for the reasons stated and, on balance, large scale renewable development in the developed world does depend significantly on the grid; but the large steam turbine generators which now dominate generation in the developed world are far less useful.
A more thoughtful approach than yours is needed to distinguish the transmission baby from the large generator bathwater, with the aim of throwing out the latter as renewables increasingly dominate the energy supply mix in future decades. Eliminating the largest generators now in use on modern central systems will actually reduce the need for spinning reserve on those systems. So will putting more generators on the grid closer to load concentrations.
Control of reactive power and frequency without use of large steam turbine generators is possible and does not cost a lot more. Capacitors, reactors, and control systems are comparatively cheap and rapidly increasing in capability. In addition, a distributed generation system tends to require less reactive power than most present systems because of lower mean transmission flows. Transmission lines themselves can meet a large share of the reactive power need, capacitors much of the balance. Wind systems can be managed to control reactive power. Large steam turbine generators are not essential to provide spinning reserve. Many smaller rotating machines can do this job at least as well as a few large ones.
Energy storage to back up for light winds or low sun is costly. So are alternatives such as excess biomass capacity. However, by the time that renewables have reached such penetration levels that storage might be considered necessary, natural gas prices will probably be high and going higher. Relative to the cost of gas and the cost of global warming, storage of renewable energy, probably initially in existing hydro reservoirs, may then be competitive. Eventually, some of that storage could be in the form of hydrogen produced and compressed by off-peak energy from offshore wind facilities. Ultimately, in this way, more than half of our electric resources could be wind based.
We need not detour through the coal fields to keep our lights on in the latter half of the next century. We can get all we need, directly or indirectly, from the sun and the wind. If we are serious about slowing global warming and living sustainably on our limited planet, we will never accept anything less than the ultimate goal of a 100% renewable electric supply system.
We will need the grid built for large generators for our own purposes, but let us not preserve the fossil-fuel or nuclear behemoths themselves a day longer than we must.
Whether we like them or not, large coal plant will continue to exist for some time and they do keep power systems stable at low cost. What's more, the level of the vital spinning reserve they provide will not alter if they are eliminated, as it depends upon uncertainties in predicting both demand and generation. Large hydro has similar characteristics to coal or oil-fired steam turbines, but not every system has access to hydro -- and the provision of dedicated storage, or of static compensation equipment (to provide reactive power) is unrealistically costly in comparison. Of the renewables not limited by geographical availability, wind is capable of development in substantial amounts, the waste combustion resource is more limited, and biomass gasification plant is in its infancy -- and expensive. Biomass might be able to supplant the system control functions of large coal fired plant, but the combustion side needs to be sorted out first.
In short, some of the time renewables may be able to supply most of the power, and all of the time some power can come from renewables, but a technical appraisal which shows that all the power can come from renewables all the time -- and keep things stable -- has yet to be seen.-----Ed.