We've just had a stark lesson on how important the price of energy is to our economy. In the future, the opposite is going to happen. The price of solar power has been dropping about 80% per decade for the last 50 years or so, and it looks like that is going to continue for the rest of this decade at least. It hasn't had a significant impact yet because solar has been more expensive than alternatives, but we've reached the crossing point, and solar power is now cheaper.
Energy is a major direct and indirect input into the price of pretty much everything.
Some people are going to figure out some good ways of turning cheap intermittent power into dollars, and those people are going to make a ton of money, dragging the rest of the economy with it.
(Unless of course that mechanism is completely useless, like crypto).
> Energy is a major direct and indirect input into the price of pretty much everything.
The other major factor, of course, being land.
While I don't expect many major economies to implement a Land Value Tax in the near term, to balance out these costs more fairly among citizens and corporations, it's worth noting that we are about to see peak population being reached in China [2025] and the EU [2026], which may have interesting macro-economic effects.
> In much of the country you can buy a square mile for a few million.
Yet in other parts of the country people pay that for 1000 square feet.
The fact that people aren't building skyscrapers or gold mines in "much of the country" doesn't mean that there isn't high demand for housing or precious metals.
I would be interested to know, for example, how much energy would cost if there were unlimited free space (with good weather and topography) for installing solar panels within easy transmission distance from all energy consumers.
In that sense, energy prices are dependent on land prices.
I'm worried that having cheap energy most of the time will lead to more disasters like Texas in Feb 2021.
We should focus more on how to avoid long-tail blackouts than how to profit from periods of abundance, particularly as electricity becomes critical for transportation and heating, which have traditionally relied on fuels that are easy to store.
We've just had a stark lesson on how important the price of energy is to our economy. In the future, the opposite is going to happen. The price of solar power has been dropping about 80% per decade for the last 50 years or so, and it looks like that is going to continue for the rest of this decade at least. It hasn't had a significant impact yet because solar has been more expensive than alternatives, but we've reached the crossing point, and solar power is now cheaper.
Energy is a major direct and indirect input into the price of pretty much everything.
Some people are going to figure out some good ways of turning cheap intermittent power into dollars, and those people are going to make a ton of money, dragging the rest of the economy with it.
(Unless of course that mechanism is completely useless, like crypto).