Welcome to the WC, wherein you’re trapped in my mind for eight to ten minutes weekly.
Last week, we looked at investment opportunities in Mexico ahead of our planned 2025 investor field trip down south.
We also took a quick look at some investable Christmas gift ideas, and … you all are a mercenary lot.
Perhaps no surprise.
This week, we’re exploring a world of infinite abundance. Why energy will become absurdly cheap and what that means.
- (Nearly) Infinite Abundance
- The Technology Cascade: What Becomes Possible
- Case Study – Terraforming Nevada
- Case Study – Transforming the Arabian Peninsula
- Global Power Shifts and Investment Opportunities
Have a read-through, and let me know what you think.
Let’s go.
Table of Contents
(Nearly) Infinite Abundance
The cost of energy is about to collapse. Not gradually, not eventually, but rapidly and dramatically. The US average retail electricity price currently sits at 13.6 cents per kilowatt-hour, but this figure is poised for a historic plunge that will reshape our world in ways we’re only beginning to understand.
Solar power has consistently outperformed even the most optimistic predictions. Over the past decade, actual solar installations have been more than three times higher than five-year forecasts, while costs have dropped nearly 90%. This isn’t just continuation of a trend – it’s acceleration of a revolution.
The numbers tell a compelling story. By 2029, just five years from now, solar costs in optimal locations are projected to fall below 1 cent per kilowatt-hour. Even in average locations, costs will likely drop to 1.5-2.0 cents per kilowatt-hour. By 2034, we’re looking at costs below 0.7 cents across most sunbelt regions, with some locations achieving costs as low as 0.4 cents.
This isn’t just another incremental improvement in energy technology. It’s the beginning of an era of energy abundance that will rival the transformation brought by the original Industrial Revolution. The key difference? While the Industrial Revolution gave us cheap but environmentally costly energy, this revolution provides nearly free, clean power.
What’s driving this unprecedented cost decline?
Three major factors are converging:
- Manufacturing scale is increasing dramatically, particularly in solar and battery production.
- Technological improvements continue to boost efficiency—modern solar panels are approaching 30% efficiency, and new technologies promise even better performance.
- The learning rate in solar technology remains remarkably consistent at around 30% cost reduction for every doubling of capacity.
But the most important factor might be the self-reinforcing nature of this transition. As energy gets cheaper, the cost of producing solar panels and batteries drops, which makes energy even more inexpensive. This virtuous cycle is already accelerating beyond what most models predicted even a few years ago.
The implications extend far beyond our electric bills. When energy costs drop below certain thresholds, entire industries and processes that were previously uneconomical suddenly become viable. At 3 cents per kilowatt-hour, large-scale desalination becomes practical. At 2 cents, direct air capture of carbon dioxide becomes feasible. At 1 cent, we enter truly uncharted territory where energy costs effectively disappear as a constraint for most human activities.
This isn’t a distant future scenario. The technology exists today, and the economic forces driving this transformation are already in motion. Countries and regions that understand and position themselves for this change will thrive, while those that cling to traditional energy paradigms risk being left behind.
As we stand on the brink of this transformation, the question isn’t whether energy will become nearly free but how quickly we can adapt our infrastructure, institutions, and imagination to take advantage of this unprecedented opportunity. The answer will determine which regions and technologies lead us into this new era of abundance.
The Technology Cascade: What Becomes Possible
When energy becomes nearly free, the impossible becomes inevitable. Removing energy as a constraint unleashes a cascade of technological possibilities that have long existed in theory but remain economically impractical. Understanding this cascade requires thinking about both direct impacts and their ripple effects across society.
Consider computation.
Today’s artificial intelligence models are primarily constrained by computing costs, which are dominated by energy expenses. When energy costs drop below 1 cent per kilowatt-hour, we can expect a 50-100x increase in computational capacity for the same budget.
This doesn’t just mean faster computers – it enables entirely new approaches to problems. Drug discovery that today takes years could be accomplished in weeks. Climate modeling that requires months could be done in days.
But the real transformation begins with energy-intensive physical processes. Desalination costs $0.50-1.00 per cubic meter and could drop to $0.10 or less. This makes large-scale desert irrigation not just possible but economical. Industrial processes that today seem wasteful become practical: direct air capture of carbon dioxide, vertical farming in any climate, and synthetic fuel production all become viable when energy costs drop by 90%.
The transformation extends to transportation and infrastructure. Electric aircraft become practical for long-range flight when battery costs plummet due to cheap energy for manufacturing. High-speed rail networks, whose construction today is limited by energy-intensive materials production, become much more economical to build and operate. Even space launch costs could drop by 60-70% as energy-intensive fuel production and materials processing become cheaper.
Perhaps most intriguingly, climate control at massive scales becomes possible. When energy is nearly free, actively cooling or heating large outdoor areas moves from science fiction to engineering challenge. Cities could maintain comfortable temperatures year-round through a combination of shade structures, water features, and active cooling systems – all powered by virtually free renewable energy.
The second-order effects are equally profound. When energy costs disappear as a constraint, the primary limitations become human capital, regulatory frameworks, and physical space. Countries with strong governance and infrastructure planning gain enormous advantages. The ability to build and maintain complex systems becomes more valuable than natural resource wealth.
What makes this cascade particularly powerful is its self-reinforcing nature. Cheaper energy leads to more efficient manufacturing, which leads to cheaper solar panels and batteries, which leads to even cheaper energy. Each technology that becomes viable helps enable other technologies, creating a virtuous cycle of innovation and deployment.
This isn’t just about making existing processes cheaper – it’s about fundamentally changing what’s possible. When energy costs effectively disappear as a constraint, human creativity and engineering become the primary limitations on what we can achieve. The societies that thrive will be those that can imagine and execute ambitious projects at scale, unconstrained by traditional energy economics.
Case Study – Terraforming Nevada
The transformation of Nevada may be one of the most ambitious and achievable applications of nearly free energy. Today, Nevada is primarily desert, with only 1% of its land used for agriculture despite its massive size. But with energy costs approaching zero, this limitation becomes a choice rather than a necessity.
The transformation begins with water. A massive desalination network along the California coast, powered by solar energy costing less than 1 cent per kilowatt-hour, could produce fresh water at unprecedented scale. The energy required to pump this water over the Sierra Nevada, historically prohibitive, becomes negligible. A network of reservoirs and distribution systems could turn Nevada’s high desert into productive land.
But this isn’t just about adding water. The transformation requires a systematic approach to climate modification. Large-scale shade structures, powered by virtually free electricity, could reduce surface temperatures and evaporation. Controlled humidity systems could create microclimates suitable for various forms of agriculture and habitation. The entire state becomes a canvas for environmental engineering.
The soil itself would need transformation. Energy-intensive soil treatment processes, previously uneconomical, become viable when energy costs disappear. Mineral enhancement, carbon sequestration, and biological enrichment could convert desert soils into productive agricultural land. Advanced monitoring systems would optimize water use and soil health in real-time.
The economic implications are staggering. Nevada’s available land could support millions of acres of new agriculture, from traditional farming to advanced vertical growing systems. New cities could rise, designed from the ground up for energy abundance, with climate-controlled spaces and advanced transportation systems. The state’s strategic location between California and the Mountain West makes it ideal for new manufacturing and logistics hubs.
Infrastructure development would follow a similar pattern of transformation. High-speed rail networks, powered by nearly free electricity, could connect Nevada’s new population centers. Advanced data centers, freed from energy constraints, could make Nevada a global computing hub. The state’s abundant solar resources could make it an energy exporter, even as it uses massive amounts of power for its own transformation.
This isn’t a distant future scenario – the technology exists today. What’s missing is the economic viability that comes with nearly free energy. As energy costs approach zero, projects that seem outlandish today become not just possible but inevitable. Nevada’s transformation could serve as a template for similar projects worldwide, demonstrating how energy abundance can reshape our relationship with supposedly inhospitable environments.
Case Study – Transforming the Arabian Peninsula
The Arabian Peninsula stands at a unique crossroads as we enter the age of nearly free energy. With some of the world’s best solar resources and significant capital for investment, this region could transform from a fossil fuel powerhouse into something far more revolutionary: a template for human achievement in previously inhospitable environments.
The transformation begins with climate control at an unprecedented scale. When energy costs approach zero, actively cooling vast areas becomes economical. Imagine a network of solar-powered cooling systems and shade structures covering major cities and agricultural zones. Temperature management that today costs hundreds of dollars per square meter annually would drop to negligible levels, enabling year-round outdoor comfort in one of Earth’s hottest regions.
Water becomes abundant through massive desalination networks powered by nearly free solar energy. The Arabian Peninsula’s lengthy coastline becomes an asset rather than a barrier, with desalination plants producing fresh water at a fraction of today’s costs. This water, combined with climate control, enables large-scale agriculture in previously barren areas. Vertical farming towers, operating 24/7 with nearly free electricity, could produce food equivalent to traditional farms many times their size.
But the real transformation comes in urban development and industry. Cities could be rebuilt or expanded with climate control as a fundamental design principle, not an expensive addition. Vast indoor spaces become economical when cooling costs disappear. The region’s position between Europe, Asia, and Africa makes it ideal for a new kind of manufacturing hub – one powered by unlimited clean energy and automated with advanced robotics.
The space industry represents another tremendous opportunity. The peninsula’s clear skies, stable geology, and soon-to-be-abundant energy make it ideal for space launches and research. Space becomes a viable commercial frontier when launch costs drop by 60-70% due to cheap energy. Manufacturing in orbit, solar power satellites, and space tourism all become practical industries.
Education and research undergo similar transformations. Universities and research centers, unconstrained by energy costs, could operate massive computational clusters and experimental facilities. The region could become a global hub for climate engineering research, testing technologies that could help other parts of the world adapt to changing conditions.
This isn’t just about transforming a desert – it’s about creating a new model for human civilization in previously inhospitable environments. The Arabian Peninsula could become a laboratory for technologies and techniques that will be crucial as humanity adapts to climate change and expands its habitable range. The key is nearly free energy, which removes the primary constraint on human ingenuity in this challenging environment.
Global Power Shifts and Investment Opportunities
The transition to nearly free energy will reshape global power dynamics more profoundly than any development since the Industrial Revolution. Traditional measures of national power – fossil fuel reserves, strategic locations, even military might – will be overshadowed by new metrics: solar resources, governance quality, and infrastructure readiness.
Countries with strong governance and infrastructure planning gain enormous advantages. The high-speed train from Paris to Nice will become even faster, while regions with poor infrastructure planning struggle to capture cheap energy’s benefits. Nations with stable regulatory frameworks and efficient bureaucracies will attract investment and talent, while those with weak institutions will fall further behind.
The investment opportunities in this transformation fall into three categories: direct plays, second-order effects, and long-term positioning. Direct plays include companies manufacturing next-generation solar technology, advanced batteries, and grid infrastructure. Look for firms pushing the boundaries of efficiency and scale, particularly those with strong intellectual property portfolios.
Second-order opportunities might be even more lucrative. Companies developing desalination technology, climate control systems, and advanced materials will see explosive growth. Agricultural technology firms, especially those focused on controlled environment agriculture, will benefit from the ability to grow food anywhere. Transportation infrastructure companies, particularly those specialized in high-speed rail and electric aircraft, will thrive.
Long-term positioning requires thinking about resources differently. Water rights in regions primed for transformation, land in areas that could become newly habitable, and rights-of-way for future infrastructure could all become incredibly valuable. Companies developing technologies for space exploitation – mining, manufacturing, and tourism – could see astronomical returns as launch costs plummet.
The most interesting opportunities might be in unexpected places. Countries like Morocco, which combines excellent solar resources with proximity to Europe and stable governance, could become energy and manufacturing powerhouses. Australia’s interior, long considered too hostile for development, could become valuable with the right infrastructure investment.
For investors, the key is understanding the cascade of effects. When energy costs drop below certain thresholds, entire industries become viable almost overnight. The companies that have prepared for these thresholds – through technology development, land acquisition, or infrastructure planning – will be best positioned to profit.
This transition won’t be smooth or uniform. Some regions will adapt quickly and prosper, while others will resist change and decline. The key is identifying which regions and companies are best positioned to ride this wave of transformation and which might be left behind by the sudden shift in economic fundamentals.
The future belongs to those who understand that nearly free energy doesn’t just change the price of electricity – it changes everything about how we live, work, and organize our society.
That’s all for this week; I hope you enjoyed it.
Cheers,
Wyatt
Disclosures
- Our pals at Melograno brought this issue to you.
