Simplifying wildly: Electricity producers sell their electricity at auction. They all offer a bid (x Wh at price y), the utility accepts bids from lowest to highest until demand is filled, and then everybody gets paid the highest accepted price to fill demand. Wind and solar pretty much always bid their forecasted capacity at $0, because they have no additional costs between producing and getting curtailed.

So the silk incinerator only gets to sell electricity if demand is extremely high and the utility needs to accept even the highest bid.

Batteries would fix a lot of this, but western nations have extremely long interconnection queues (project waiting to be allowed to be connected to the grid), mostly because of stupid bureaucratic reasons.

The utility will bill the 40p/kWh to its industrial customers (and residential customers on “agile” smart meter tarriffs), and the customers can decide whether they need the power even at 40p, or whether they shut down their bitcoin mine/aluminium smelter/EV charger/floodlights for those two hours.

In the longer term, price spikes like this incentivise the building of batteries - which might be marginably profitable most of the time but profit big time (and help big time) in periods of price spikes.

> if they could price down a bit they could just run fossil fuels out of the market entirely

What do you propose we do when the intermittent sources don’t provide enough energy and all the other power sources have gone bankrupt?