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So space expands due to Hubble Flow. Some light is observed, which is seen to be red-shifted due to the space expansion. It is less energetic. Where did the energy go?

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marked as duplicate by John Rennie, Community Feb 12 '16 at 16:51

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It didn't go into anything. Energy is not conserved "globally," it is conserved in "local" Lorentz frames. If you like the idea of the continuum, you might say that energy is conserved "precisely at each point in space," but only approximately as you increase the size of the region. Of course our models of physics in local Minkowski frames assume conservation of energy in absolute terms and have been wildly, wildly successful at making predictions based on that conservation. As far as I know, it's not totally clear how this tension is resolved in the transition from local to global phenomena.

As another example, the Hubble expansion itself is a non-conservative effect. Where does the energy that accelerates distant galaxies come from? We call that dark energy. Large scale structure is a very confusing and different realm from Newtownian physics or quantum field theories.

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