> What is the end game here?
Getting off fossil fuels. Specifically, it's something called the "European Grid Vision" [1]
The short version is advances in long range power distribution using DC transmission lines mean we can transmit power further with less loss than traditional high voltage AC lines. ABB has done wonders in rolling out HVDC technology [2].
But what does this have to do with the variable duty problem you ask? Alternative energies are hard to grid precisely because they are so variable as you observed. But with efficient transmission you could, for instance, collect solar in North Africa to provide power to the continent as well as pump up water into dammed fjords in Scandinavia which can be drained at night to through hydro-electric supplies. Wind in Germany or Tarifa can supplement dams one week, which can be drained the next. And of course there is always geo-thermal and nuclear.
So yes, today one needs the backup coal/gas/nuclear plants but not by 2040 in the updated roll-out schedule.
[1] https://www.youtube.com/watch?v=Uir-BPoTN88#t=0
[2] http://renews.biz/109437/abb-transforms-chinese-grid/