For it to truly be free energy it would have to be a generator that produces unlimited energy and transmits it without any sort of infrastructure to wherever it needs to go. Otherwise there would always be some cost. However even if it were completely unlimited and free I think PoW would still be viable because mining hardware is finite. The cost of hardware would spike as everyone scrambled to take advantage of the free energy.
Discussion
How big of an impact do you think a material like LK-99 would have on the energy market and Bitcoin mining process?