So changing this system means meddling in the free market. There are times and places where meddling is appropriate and this is likely one such, but there are significant consequences and side effects to doing so, so shouldn't be done lightly.
I'm putting 'free market' in quotes, because even beyond externalities, the current system with zonal uniform pricing is only 'free' for a very narrow view of what constitutes a commodity or a marginal cost.
Consider two households: (a) in northern Germany close to the Danish border, located in a small town with lots of local wind turbine capacity, (b) in Southern Bavaria with very limited renewable energy production close by. There's also no adequate power transport infrastructure to get the renewable energy from the North (or elsewhere in Europe) to household (b), mostly because local politicians in Bavaria oppose putting up any visible infrastructure, whether power lines or wind turbines).
Now, during peak wind hours, a significant portion of the wind turbines in the north will go offline because the network cannot handle the load, while household (b) still needs to get their power from gas. [This is not a contrived example, but reality in Germany.] Yet (a) and (b) both pay the same price -- that of the gas producer. How is this a 'free' market?
But to your point, the good news is that people are taking electricity market design very seriously, not lightly. (Section 6 of this white paper is a good read that outlines many of the current market inefficiencies (Disclaimer: my former academic advisor and a few former colleagues are coauthors)): https://synergie-projekt.de/wp-content/uploads/2021/12/Elect...
On the other hand I may be able to put a wind turbine on my premises and get subsidised for doing so which has the opposite effect of the mentioned tax on nuclear power in that it makes it easier to generate wind power profitably.
Some users are freed from all sorts of taxes which all others have to pay, here in Sweden this is - or was, the current government seems to want to change this policy - the case for the likes of Facebook, Google and Microsoft who were allowed to establish data centres with the promise of nearly tax-free electricity. These data centres take so much power that the regions where they have been established have found it difficult to allow other energy-intensive industry to establish there for lack of power.
Margin pricing on electricity is counterproductive and should be abolished since it makes it more profitable to underinvest in more efficient power generation technologies since that would have a negative effect on market prices. It is better to keep a few inefficient gas turbines online and make sure these are needed at peak hours since they will drive up the market price for all generated power. As long as margin pricing is in place I do not expect something like grid-scale battery storage for peak demand to take hold since that has the potential to drive down prices.
[1] https://naringslivets-medieinstitut.se/det-var-marknaden-som...
The "effektskatt" was removed in 2018.
> On the other hand I may be able to put a wind turbine on my premises and get subsidised for doing so which has the opposite effect of the mentioned tax on nuclear power in that it makes it easier to generate wind power profitably.
The subsidies for wind power in Sweden was phased out in 2021 due to not being necessary anymore.
How would you do it? If you keep the current market with multiple independent actors then they would try to predict the most expensive generation required and bid at that price. Or you could tell them that since you are "coal" you get this price. But then that would be unfair to someone who made a different business case based on their availability, or their costs, or whatever.
You essentially end up in a quagmire of 5 year planned production. Marginal pricing solves this, and is what is applied to all raw resource markets due to these issues.
If you do not like marginal pricing you have all the possibility in the world to buy electricity futures, which of course nets you less income as a power generator and costs more for customers, because the risk is still exists.
To return to sane prices one extra step may need to be made depending on the transfer capacity from a region or country to one neighbouring it which has markedly higher prices: consumer prices need to be disconnected from export rates if the transfer capacity and export demand is high enough to saturate the national generating capacity or prices will still be pushed up unduly. Just like with many other goods there may need to be an export market running parallel to the domestic market with the domestic market being the first one to run its auctions.
Is this a fully worked-out proposal? No, it is not but the weighed average pricing mechanism proposed has all of the benefits and none of the downsides of the marginal pricing mechanism, at least from a market perspective - producers probably prefer the marginal pricing mechanism which allows the final kWh to be generated by the CEO sat astride a home trainer with a generator attached.