> In Europe it is distinctly less risky as you get arbitrage between different parts of the grid. You make money as long as their is a price difference.
Yes, and in theory, the market can decide whether spatial arbitrage via long interconnections or temporal arbitrage (via batteries, shutting off industrial consumers, pre-running air-cons, etc) is better.
Perhaps a combination of approaches will prevail:
The different arbitrage opportunities mostly make money off the price spikes they can smooth.
Simplified: the first long range cable you install earns the most money, because it can pick off the highest spikes. The second cable will cost just as much as the first one to install, but will have to find its profits in a world with already slightly blunted price spikes.
Similarly for batteries. But eg batteries and long cables can pick off slightly different spikes, and the back-and-forth flow in cables doesn't have to average out to zero (like batteries do).