Mailbag episode! Biotech, layoffs, battery recycling and more

Energy Costs

The notion that the marginal cost of energy is approaching zero is a common but flawed assumption. Shayle Kann explains that while solar costs have been declining, recent trends show an increase due to supply chain issues and tariffs 1. He emphasizes that even if solar costs decrease, the overall cost of energy includes other factors like transmission and distribution, which have been rising 1.

The marginal cost of production could be going down, but the cost of transmission distribution has been going up.

--- Shayle Kann

Sarah Golden adds that assuming energy costs will drop to zero is a risky premise for startups relying on current electricity prices 2.

   

Desalinization

Cheaper energy could significantly impact the viability of desalinization and other industrial processes. Shayle Kann notes that while desalinization is already in use, its expansion depends on the availability of cheap, clean energy 3. He lists other processes like direct air capture and hydrogen production that could benefit similarly.

In a world where the cost of energy overall, particularly if it's 24/7, is getting cheaper, delivered, then, yes, I think desalinization, amongst a number of other things, could take off as a result.

--- Shayle Kann

Sarah Golden agrees but cautions against assuming this energy trend will materialize, highlighting the need for careful consideration of current energy economics 4.