We’ve witnessed an astonishing 100-fold improvement in the cost of solar power over the past few decades, making it the most affordable form of energy available today. And the best part? The cost is expected to continue dropping. This downward trend in cost is not limited to solar power alone—wind, wave, tidal, and other energy production methods are experiencing similar reductions in cost. Just imagine our lives if energy became ten or even 100 times cheaper. What if electricity was too cheap to meter? What if instead of paying for every kilowatt-hour, we could subscribe to energy for an affordable flat fee and use as much as we needed whenever we needed it?
It may sound outrageous, but let’s consider the parallel of the telecommunications industry. Half a century ago, long-distance calls were billed per minute, with weekday calls between Los Angeles and New York costing a whopping $0.70 per minute. Much like energy today, telecommunications were tightly regulated. However, a wave of deregulation swept through the industry starting in the 1970s, allowing businesses to compete with the telecom giant AT&T. This led to the emergence of innovative services like Private Branch Exchanges (PBX) and Voice Mail.
In 1982 AT&T was broken into multiple Regional Bell Operating Companies (RBOCs), and long-distance services were separated from local calling. These moves ignited a wave of competition and innovation, propelling the transformation from circuit-switched analog services to packet-switched digital services. This groundbreaking shift paved the way for the rise of the Internet, cloud services, and video streaming as we know them today.
Just a few decades ago, setting up a video conference required weeks of advanced planning to book and test a circuit to carry the video feed. The cost was exorbitant. Only major corporations could justify permanent video links between locations due to the expense involved. Fast forward to the present day, and we think nothing of launching a Zoom call at a moment’s notice, completely free of charge.
Energy is currently undergoing a similar innovation and cost curve. We are actively deregulating our energy system and supporting the emergence of Independent Power Producers (IPPs) and Power Purchase Agreements (PPAs) between energy consumers and IPPs. Our energy delivery system, the grid, is being digitized, enabling greater efficiency and flexibility. Furthermore, we are incentivizing demand response programs to better match supply and demand and encouraging the adoption of new energy sources and other innovations.
With a next-generation digital grid moderated by advanced storage systems and inverters, we can effortlessly manage the fluctuations in supply from intermittent renewables. We can provide sophisticated support for large energy consumers, such as industrial manufacturers, data centers, and fleet charging stations. Additionally, we can facilitate the integration of micro-grids and smaller generators like rooftop solar and industrial co-generation.
Taking a page from the telecom revolution, we could offer unlimited electrical service for a fee based on the electrical bandwidth required. This model would allow us to leverage ongoing innovation and cost reduction in the transformed power system.
It was nearly impossible to fathom on-demand video conferencing from our desktops, let alone from our mobile phones, just a few decades ago. Yet today, we effortlessly stream high-definition videos to any device, anytime and anywhere. Similarly, it is hard to fully imagine a future where we deploy fifty or even a hundred times more renewable power at a fraction of the current cost, perhaps as low as one cent per kilowatt-hour or even less. As with the telecom revolution, this energy surplus will unlock incredible new possibilities.
In a future where energy is too cheap to meter, transportation will be revolutionized. Consider, for example, the burgeoning electric vehicle (EV) market. As it stands, the cost of charging an EV can already be significantly less than the cost of refueling a traditional petrol-based vehicle. If electricity becomes virtually free, EVs could become the default mode of transport spurring additional innovation in vehicle design, long-range battery technology, autonomous driving systems, and electric public transport, leading to cleaner, quieter cities with significantly reduced carbon emissions.
Let’s talk space travel. I know not everyone is into it (and I firmly believe we need to take care of Earth) but abundant and cheap energy could completely transform the way we approach space exploration. Launching a spaceship out of Earth’s gravity well requires an incredible amount of fuel. But if energy costs were to plummet, more frequent and ambitious space missions could become feasible leading to innovations in propulsion technology, the construction of off-world colonies, the mining of asteroids for rare minerals, and kinds of science and industry we can’t yet imagine.
The ramifications of essentially free energy on the global economy would be enormous. It would completely reshape the economics of energy-intensive industries like mining, manufacturing, and data centers. High-energy processes like aluminum smelting, steel manufacturing, or large-scale cloud computing could become significantly cheaper, leading to lower prices, increased consumption, and potentially entirely new uses for these products and services. Eliminating energy poverty could also stimulate stability and economic growth in developing countries, providing opportunities for innovation and entrepreneurship in regions previously held back by inadequate energy infrastructure.
An abundance of cheap renewable energy could potentially enable large-scale desalination projects, solving water scarcity issues that many regions face. It would drive innovations in desalination technology, making clean water available to all, regardless of geographical location.
Last but not least, the environmental benefits of such an energy transformation cannot be understated. An abundance of nearly free renewable energy could replace fossil fuels, drastically reducing greenhouse gas emissions. It would also lead to carbon capture and storage technologies innovation, allowing us to tackle the excess CO2 in the atmosphere directly. These technologies, combined with renewable energy, could enable us to halt and possibly reverse the effects of climate change.
We must continue and accelerate our energy transformation efforts, not just to combat climate change but to drive the next wave of innovation that will propel our economy forward in ways we haven’t dreamed or thought of yet.