If solar efficiency doubles every 2-3 years AND long-distance transmission becomes practical, which specific industries become viable in previously-uneconomic remote areas? How should CME treat this?

This combination is the most consequential aspect of the entire technology pair. Cheap power alone helps existing economic activity, but pairing cheap-far-from-load with long-distance transmission creates entirely new viable geographies — what economists call "extending the production possibility frontier" geographically rather than technically.

The Strategic Logic:

The Industries That Become Newly Viable in Remote Locations:

1. Hyperscale Data Centers

Energy is 35-45% of data center TCO. Cheap remote power makes it economic to place compute capacity in cool, geologically stable regions far from population centers. Greenland, Iceland, northern Sweden, Patagonia, and the Atacama Desert all become candidates. Existing examples (Iceland) demonstrate the model works at scale.

2. Vertical Farming and Controlled-Environment Agriculture

Indoor farming uses 30-50x more electricity than field agriculture but produces 10-20x the yield per square meter with 95% less water. With energy at <3 cents per kWh, vertical farming becomes economic for staple crops in arid regions and population centers. Saudi Arabia, UAE, and northern African coastal cities become major produce exporters.

3. Desalination at Industrial Scale

Reverse-osmosis desalination uses 3-4 kWh per cubic meter. At cheap power, water becomes effectively infinite for any coastal economy. This enables agriculture, manufacturing, and population growth in previously water-constrained regions (MENA, parts of California, northern Chile, western Australia, southern Spain).

4. Aluminum, Steel, and Chemicals Smelting

Aluminum is essentially "solidified electricity" — 30-40% of its production cost is power. Smelters historically located near hydroelectric dams (Iceland, Quebec, Pacific Northwest). With cheap remote solar + transmission, smelters can locate near any large solar resource and ship aluminum globally. Same logic applies to chlor-alkali, polysilicon, and ammonia.

5. Green Hydrogen and Synthetic Fuels

Electrolyzing water for hydrogen is energy-intensive but offers a chemical-carrier alternative to direct transmission. With sub-3-cent electricity, green hydrogen reaches cost-parity with grey/blue hydrogen for industrial uses (refining, fertilizer, steel reduction). Synthetic kerosene and ammonia become viable fuel substitutes for aviation and shipping.

6. Bitcoin / Distributed Compute

Already exists where stranded energy is cheap (Texas, Kazakhstan, Norway, Paraguay). Cheaper solar + transmission expands this dramatically — though regulatory risk is high.

7. Carbon Capture and DAC

Direct air capture currently costs $400-$800 per ton of CO2, mostly energy. At 2-3 cent power, DAC becomes economic at $100-$200 per ton — making industrial-scale climate intervention financially viable.

CME Sector Implications:

Practical CME Framework:

For 20-year strategic CME, model two scenarios:

1. Base case — transmission innovations partial, regional clusters emerge slowly. Energy-intensive industries get a 0.2-0.3 pp tailwind.
2. Full case — transmission innovation lets equatorial solar dominate global power markets. Energy-intensive industries get a 0.5-0.8 pp tailwind, but legacy energy producers face severe equity-value compression.

Practice this technology-shock scenario analysis in our CFA Level III question bank.