The current focus on artificial intelligence (AI) has reminded me of a point around energy which I still don’t think is understood or being considered enough. Unlike the old days of energy, where prices go up and down for various reasons, mostly unpredictable, with the all-electric and renewable energy revolution prices only go down. This is the same situation that has taken us to the terrifying potential of AI, but we don’t seem to be having the same conversation of what the same thing means for energy.
Using one of the new chatbots seems incredible, I still get a slight sense of discomfort as I see people get it to write a song or write reports that take me days. That said, (as I understand it) AI is no more than sheer processing power and probabilistic magic. It isn’t conscious or understanding or anything like that. In any case, what interests me is what got us here. The reason we see AI is that for generations we have seen processing power of computers increasing, Moore’s Law and all that, whilst the price drops. It is so obvious, that we don’t notice it. We all understand that next year our new phone, computer, TV, tablet, will be cheaper and/or more powerful that it is today. No-one wonders if the price of computing power will be higher than in a decade than it is today. No-one hedges their laptop buying to protect from the risk that they will be more expensive in five years.
With energy it has traditionally been different, many organisations hedge their fuel buying to protect against energy price variations over a few years. Even over decades oil, gas and coal prices have gone up and down unpredictably, as can be seen in the graph below. They certainly aren’t dropping consistently.
https://ourworldindata.org/grapher/fossil-fuel-price-index
But that is changing, fundamentally. Today is the day the cheapest electricity ever was generated. Next year, it will be cheaper. This is why we need more strategic thinking about the potential benefits and problems . It won’t be exactly the same as processing power; the cheapest energy is solar and that will always be intermittent, which introduces a complication around storage that processing power doesn’t face. In some cases the intermittency is irrelevant; electrolysis for hydrogen, in some cases it is crucial; heating my house. But still, the graph will look like the below one for processing power:
The point is, take whatever you think is realistic at today’s electricity prices and then halve the price, then reimagine, then halve again and continue indefinitely. You soon come to incredible thoughts.
- Energy bills like broadband; all you can eat for a fixed price
- Much cheaper air travel
- Almost zero marginal cost surface transport
- Disregard for energy efficiency? (Think about how incredibly inefficiently we use the processing power we have.)
- Alchemy (If energy is the blocker to performing chemistry magic then it will cease to be a blocker.)
- Water shortages irrelevant as desalination and pumping almost free
I have a poor imagination, but just as almost anything you can imagine will be achievable with processing power will come to pass, the same is true of energy.
Even if you accept what I am saying, you might say this is decades off. The really amazing stuff may be a couple of decades off, but this qualitative change of electricity from a fluctuating priced commodity to ever cheaper will change things for everyone and that will happen for most of us in the next decade. I have written before about how this change will have an amazing and mainly positive impact on geopolitics, but we need more writing and conferences on what almost unlimited, almost free power means for the world.
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