The development of technology leads to the fact that the cost of many things tends to zero. What we once paid a lot for is now cheap or free - buy a computer, call the other side of the world, take a photo, watch a movie, listen to music, or even go to another country. More and more everyday activities will join this list. Perhaps one day there will be electricity. Cool, huh? After all, it's free. Who doesn't love free?
Energy is a very complex issue, in fact.
The cost of burning coal is no longer falling, but the cost of harvesting solar energy continues to fall. In October 2017, electricity bills in Saudi Arabia fell to 1.79 cents (an average of five times cheaper than in Russia) per kilowatt-hour, breaking the previous record in Abu Dhabi (2.42 cents kWh) … Unsurprisingly, these incredibly low prices are a legacy of the sunniest parts of the world. In the rest of the world, both in the US and in Russia, prices hover around 5-13 cents per kWh.
Whenever we think prices can't go down anymore, they do - and the best thing about this ever-decreasing price is that it's not due to batteries. Cheap and efficient batteries still lag far behind the general pace of development of power systems and especially renewable energy sources. But once we learn to conserve energy correctly and cheaply, there are very few limitations. And transparent solar cells will also become a reality, transforming every outer glass surface into a small power plant.
What will the world be like with free electricity? Electricity would become ubiquitous in many parts of the world where it is not. Elsewhere, electricity bills will disappear. Production costs will fall, transportation costs will fall, and all associated costs will also fall.
The money we save on energy could be funneled into social programs or even create a universal basic income that will help build a just society. If everything costs less, we won't have to work harder to make more money, which means we will have more time and we will be able to channel it into creative direction.
And yet every coin has a downside, and the old adage that we get the best things in life for free doesn't work in this case. Let's see what happened when we made other resources free or cheap.
In the United States, food was made cheap and plentiful by learning to produce it on a scale - and the problem was worse than ever. We learned how to make plastic bottles and bags for pennies, and now the oceans are filled with cheap and non-degradable garbage.
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The Jevons paradox is that as technological progress increases the efficiency of a product or resource, the rate of consumption of this resource increases due to growing demand, which directly reduces the efficiency of savings. After all, in the depths of its nature, humanity only takes, and electricity will not be an exception.
The Middle Eastern countries, which have the lowest electricity prices in the world, are prime examples. Excessive use of energy has become common and there is no incentive to curb it. Ideally, energy consumption per capita should be reflected in GDP per capita, but countries such as Kuwait, Bahrain and Saudi Arabia have an imbalance in this metric, using much more energy than is needed to achieve their GDP.
As energy becomes cheaper in other parts of the world, people will use it more and more, and the planet will be the first victim. While energy will be renewable, this does not mean that the environment will remain in order; there may be consequences that we do not even imagine, as the one who invented plastic never imagined that he would poison the sea life.
As energy becomes cheaper and eventually moves towards zero cost, we will need to be smart to use it wisely. Government regulation can play a role, as can market forces, despite the absence of economic incentives. As with any new technological development, we may have an adjustment phase where we go too far, catch ourselves by the tail, and pull ourselves back.
Free, clean energy will undoubtedly bring many benefits. But we cannot afford to forget that someone is also paying for free - and this is not always immediately obvious.
Ilya Khel