But what is this EROI (Energy Return on Energy Invested)? And why is it so Important?

 

If you are a lion, you don't just have to run faster than a gazelle; you have to make sure that the metabolic energy you obtain from eating the gazelle is higher than the energy you used for the chase. If not, you die. It is the harsh law of the EROI. 

The concept of Energy Return on Energy Invested (EROI or EROEI) has been around for a long time. It was introduced in its modern form in the 1980s by Charles Hall, but it is steeped in the thermodynamics of non-equilibrium systems. It can be easily understood if you see it as the equivalent of ROI (return on investment). ROI (EROI) is given by the money (energy) returned from a certain investment (energy infrastructure) divided by the monetary (energy) investment. You need a value larger than one in order for your investment to make sense or, if you are a lion, to survive. Large values of this parameter make life easy for investors, energy producers, and lions (although not for gazelles). (*)

Up to recent times, the conventional wisdom was that the EROI of fossil fuels was very high: during the heyday of oil extraction, it was said to be been around 100. Think of an investment that brings back to you back your capital multiplied by one hundred (!!), and you can understand why oil was, and remains, so important for our society. At the same time, the EROI of renewable energy was calculated to be of the order of 5-7, with some studies even placing it under 1. That gave rise to the narrative that only oil and other fossil fuels could sustain an industrial civilization and that renewables were not really so; at best they were "replaceables" as long as there was oil available. The consequence was an emphasis on social and political solutions: degrowth, energy saving, return to a rural economy, or, simply, accepting that we are all going to die soon. 

How fast things change! New studies, including one by Murphy et al., revealed that the EROI of oil may never have been so high. You need to take into account that oil in itself is useless: it needs to be transported, refined, and burned inside inefficient engines to provide energy for society. So, it is correct to calculate the EROI of oil at the "point of use" rather than at the "well mouth." Once that's done, it turns out that oil's EROI may well be (and have been) lower than 10. At the same time, technological progress and scale factors led to an improvement in the EROI of renewables (wind and photovoltaics) well over 10. 

Now, the paradigm is reversed. Renewables are truly renewable, while oil never was. That gives us a chance to revisit the dominant paradigm of how to face the energy crisis. The new paradigm is that we can rebuild a society that works on renewable power. It won't be the same as the one created by oil, and we may have to accept a considerable economic contraction in the process to get there. But it gives us a fighting chance to create a resilient and prosperous society. 

Of course, not everyone agrees on these concepts and there is a lively discussion in which several people are defending the old paradigm. One argument in the discussion says that if you use oil energy to refine oil, that energy should not be  counted in the denominator of the EROI ratio. And, therefore, that the EROI of fossil fuels is much larger than what the recent calculations indicate. This is silly: energy is energy, it doesn't matter where it comes from. Nafeez Ahmed discusses this point in detail in his blog, "The Age of Transformation" saying, among other things, that:

.... petroleum geologist Art Berman published a post also claiming that Murphy et. al’s paper is fundamentally incorrect. He concluded that if Murphy and his co-authors were right, then decades of EROI research showing extremely high values for fossil fuels would be wrong. He repeats the same argument as Hagens, and then uses it to offer a new calculation:

Nearly 9% of the total post-extraction costs for oil are for refining. Yet most of the energy for refining comes from the crude oil and refined products used in the refinery. It is, in effect, co-generated. That doesn’t negate the energy investment needed to operate the refinery but it is not a cost to society as indicated in the table… I divided their 8.9% for refining investment by 3 to account for the co-generation described above (it is probably much lower). The resulting oil EROI is 18. That completely removes the good news from Ahmed’s and Bardi’s proclamations of ‘mission accomplished’ and restores oil EROI to the consensus range for the last two decades.

The key error in this argument is where Berman says: “That doesn’t negate the energy investment needed to operate the refinery but it is not a cost to society as indicated in the table.”

But that is incorrect. The term ‘cost to society’ pertains precisely to energy invested which is not available for use by society. While the energy used to refine the crude oil is co-generated, it is still an input into the refinement process before the oil becomes available for actual work in society at the ‘final energy’ stage. In other words, the energy is being used to refine the oil and is therefore not available for society in any case.

What Berman and Hagens are effectively trying to do is classify the energy used to refine oil as an ‘energy output’ that represents useful work for society outside of the energy system. But this classification doesn’t make sense when we consider that it represents work that is specifically related to making the energy usable for society in the first place - because the oil must be refined and processed before it can actually be converted into usable energy for society.

Berman further questions that if EROI for fossil fuels was much lower, how could it have been so profitable?

As earth system scientist Ugo Bardi has pointed out, the profitability of an industry depends on numerous factors outside the energy system related to credit, markets, economic policy, investment, currency values and beyond. But in addition to that, the bottom line is that Murphy et. al’s research suggests that if oil has been profitable with EROI much lower than previously believed, then previous assumptions about economic prosperity requiring much higher EROI levels are questionable.

Because of the huge efficiency losses of converting energy from oil into useable forms (between 50 and 70% of energy is lost converting primary energy to final energy), as renewables avoid those losses they can produce about 50% less energy to meet demand. This means that the presumed minimum EROI to sustain a viable civilisation derived from fossil fuels could be much lower in a more efficient system.

As Marco Raugei points out, the shift to renewables and electrification “may open the door to achieving the required services with much lower demand for primary energy, which in turn entails that a significantly lower EROI than previously assumed may suffice”.

To learn more about EROI, you can look at these papers

The Role of Energy Return on Energy Invested (EROEI) in Complex Adaptive Systems, by Ilaria Perissi, Alessandro Lavacchi, and Ugo Bardi), Energies, 2021

Peaking Dynamics of the Production Cycle of a Nonrenewable Resource, by Ilaria Perissi, Alessandro Lavacchi, and Ugo Bardi, Sustainability 2023

A Christmas Post: The Miracle of Renewables

by Ugo Bardi

This is a post that I wrote for the Italian newspaper "Il Fatto Quotidiano." For this reason, it is simplified and short, yet it says what's needed to understand the revolution we are going through that will change the world in the coming years. If you are interested in the source of the data on which I am basing my considerations, you can find them on Lazard.com. So, Merry Christmas, and never despair. Sometimes, miracles happen! 

Miracles are not so frequent and, if one has serious health problems, it is not probable that a swim in the Lourdes pool will solve them. However, it is also true that sometimes things change quickly, opening up new possibilities. That's what's happening with renewable energy. Talking about a "miracle" is a bit much, I know, but recent technological developments have made available to us a tool that until a few years ago we didn't even dream of having. And this could solve problems that once seemed unsolvable.

For years, I've been lecturing about climate change and other looming worries, such as oil depletion. Usually, the people who came to listen to me were prepared for a message that was not exactly reassuring, but the question was what to do about it. At the end of the conference, a debate normally ensued in which the same things were said: ride a bicycle, turn down the thermostat in the house, install double glazing panes on the windows, use low energy light bulbs, things like that.

It was a little soothing ritual but, in reality, everyone knew that these weren't real solutions. Not that they're useless, but they're just a light layer of green on a system that continues to depend on fossil fuels to function. We have been talking about double glazing and bicycles for at least twenty years, but CO2 emissions continue to increase as before. Actually, faster than before. If we don't go to the heart of the problem, which is to eliminate fossil fuels, we will get nowhere. But how to do it? Until a few years ago, there seemed to be no way except to go back to tilling the fields by hand, as our ancestors did during the Middle Ages.

But today things have changed radically. You probably didn't notice it, caught up in the debate on politics. But it doesn't matter whether the right or the left wins. Change, the real one, is coming with renewable technologies. Wind and photovoltaic plants have been optimized and scaling factors have generated massive savings in production costs. Today, a kilowatt-hour produced by a photovoltaic panel costs perhaps a factor of 5-10 less than a kilowatt-hour from natural gas (and maybe a factor of 5 less than a nuclear kilowatt-hour) (source). We used to call renewables "alternative energy," but today all others are "alternative."

Furthermore, producing energy with modern renewable technologies does not pollute, does not require non-recyclable materials, does not generate greenhouse gases, does not generate local pollution, and nobody can bomb the sun to leave us without energy. Now, don't make me say that renewables have automatically solved all the problems we have. It is true that today they are cheap, but it is also true that they are not free. Then, investments are needed to adapt energy infrastructure throughout the country, to create energy storage systems, and much more. These are not things that can be done in a month, or even in a few years. There is talk of a decade, at least, to arrive at an energy system based mainly on renewables.

But it is also true that every journey begins with the first step. And now we see ahead of us a road ahead. A road that leads us to a cleaner, more prosperous, and hopefully less violent world. I haven't stopped going around giving conferences but, now, I can propose real solutions. And it's not just me who noticed the change. In the debate, today you can feel the enthusiasm of being able to do something concrete. Many people ask if they can install solar panels at home. Others say they've already done it. Some mad (and rightfully so) at the bureaucracy that prevents them from installing panels on their roof or in their garden. You see the changed trend also on social media.

There is always someone who speaks out against renewables reasoning like the medieval flagellants who went around shouting "remember that you must die". But there are also those who respond in kind, like, "good riddance, live happily in your cave together with the other cavemen." If you have a south-facing balcony (and if your municipality doesn't sabotage your idea), you can already install photovoltaic panels hanging from the railing that will help you reduce your electricity bill. No paperwork needed! (another small miracle). One step at a time, we will succeed!

Good news from Italy: The 30 MW Wind Plant on the Appennini Mountains has been approved

It is with immense joy that I learn and share:

"The council of the ministers, after a proposal by president Mario Draghi, has approved the project of the new wind plant "Monte Giogo di Villore" of 29.6 MW of total power to be located in the towns of Vicchio and Dicomano, including the associated infrastructure to be built in the towns of San Godenzo, Rufina, and Dicomano, as proposed by AGSM AIM S.p.a.

And, with immense gratitude, I thank the many passionate people who spent their time to support this project!

Marco Giusti, director of engineering and research in the AGSM AIM s.p.a 

Humankind's Tragic Mistake: How we Blew our Chances of Survival

 

A chronicle of how our civilization (if we want to call it in this way) blew its chance of survival. If we had invested in what really mattered, energy, we could have made it. But we preferred to invest in the toys we like so much: military hardware. And think that these 6 trillion dollars of hardware were used to make sure that some foreigners would send us the energy the US needed. With the same money, we could have had the same amount of energy produced at home. So much money thrown away, and that doesn't count the damage done on the receiving end. And now we are throwing away another good chunk of our remaining resources to follow the impossible hydrogen dream

 

An amazing article by Paul Gipe.

https://www.renewableenergyworld.com/2019/12/19/beating-swords-into-plowshares-or-wind-turbines-solar-panels-we-could-have-done-it/

 

 

We Could Have 100% Renewable Electricity If We Had Invested in Wind and Solar Instead of War in the Middle East

Yes, the United States could be generating 100% of its electricity from renewable energy if we had used the money spent on our ill-advised wars in the Middle East to build wind and solar systems, as well as battery storage, here at home.

That’s the startling conclusion of a simple calculation my colleague Robert Freehling and I made after the latest reports on the economic cost of our wars in the Middle East.

This is, after all, not rocket science. Money spent on war–anywhere–is money lost. It’s not an investment in the future. It’s money quite literally that goes up in smoke.

In contrast, money spent on building wind and solar farms or putting solar systems on rooftops is money invested in the future that will be earning returns–in the form of electricity–for 20 to 30 years.

I’ve followed this topic since the invasion of Iraq in 2003. I posted my first article on this subject on July 4, 2005, and I’ve been updating that article periodically since then as the cost of our wars continued to grow.

On the anniversary of September 11th this year, news articles on the cost of the war in Afghanistan prompted me to take another look at our lost opportunities to invest in infrastructure here at home for the direct benefit of Americans.

What I learned shocked me. Using what I call a back-of-the-envelope method, I calculated that we could have installed enough wind turbines to more than provide 100% of our electricity with what we’d spent on war.

That just didn’t seem right. These are big numbers and it’s easy to get them wrong. After all, we’ve been told for decades that it’s simply too expensive to install that many wind turbines and solar panels. We could never afford it, critics warned.

So I called my colleague and renewable energy analyst Robert Freehling for help. I’ve relied on Freehling to sort out such thorny problems in the past.

His conclusion? Yes, we could be generating 100% of our electricity in this country from just wind and solar; that is, not counting existing hydro, geothermal, or biomass generation. Freehling, though, goes even further. We would be generating so much renewable electricity that we could store huge amounts in batteries–electricity storage that also would be paid for with our “war savings.”

How did we reach such a conclusion? Did we use a supercomputer to calculate all the possible permutations of what a renewable electricity supply would look like?

No. We kept it simple. We looked at two respected estimates of what our wars have cost in economic terms to the US taxpayer, not what they’ve cost in human suffering, nor what they’ve cost the countries on the receiving end of our expenditures.

The National Priorities Project calculates that the wars in the Middle East since 2001 have cost $4.9 trillion, a sum that continues to rise. The Watson Institute for International and Public Affairs at Brown University estimates $5.9 trillion through Fiscal Year 2019. Their latest estimate raises that to $6.4 trillion through FY 2020.

To paraphrase Senator Everett Dirksen, “A trillion here, a trillion there and pretty soon it adds up to real money.” For a sense of perspective, one billion is 1,000 million. Thus, a trillion is one million million. That’s a one with twelve zeros behind it–a very big number.

We made no attempt to match the annual costs of the wars to the deployment of wind and solar. Again, we kept it simple. We simply prorated the costs over two decades with the exception explained below.

Freehling’s simple spreadsheet model assumes ramping up installations from a low base over a decade to reflect the necessity of scaling up manufacturing to meet the demand. Then he held installations constant for another decade until he reached 100% renewable generation from wind and solar. If we had started in 2001, the whole conversion would be accomplished by 2020.

Shockingly, there was a lot of money left over. So Freehling plowed the remainder into battery storage using the same approach as with wind and solar. He scaled installations up from a low base until the industry was likely to reach maturity.

Existing renewable generation from hydro, geothermal, and biomass was then shunted into the mass of new storage. Batteries would be used to equalize the grid when winds were light or the sun had set. The remainder could then be used to charge electric vehicles.

Wind and solar are cheap today. That was not so, two decades ago. Freehling accounts for this by using historical figures for the cost of wind and solar.

He dropped the initial cost of wind from $2,500 per kilowatt of installed capacity in the year 2000 to about $1,400 today.

Solar has seen a dramatic drop in cost during the past two decades. Freehling used $12,000 per kilowatt as the cost of solar capacity in 2000 and dropped it to nearly $1,500 per kilowatt in 2020.

We apportioned how much wind and how much solar were built, based on the work of my French colleague Bernard Chabot. He found that for a temperate climate, such as the United States, the optimum mix of generation is 60% wind and 40% solar energy. This mix minimizes the amount of storage needed.

Batteries are still expensive. The cost of battery storage, however, has fallen 80% in the past decade alone notes Freehling. He suggests that the cost of battery storage would have fallen even more rapidly through economies-of-scale if we had begun deploying them at scale sooner. Batteries for Electric Vehicles (EVs) would also be cheaper today if we had plowed some of our war savings into battery development.

Here in California, the Independent System Operator (Cal-ISO) requires 4-hours of storage for it to reliably meet peak demand.” Our scenario calls for one million megawatts of wind and another one million megawatts of solar. This scenario uses some 700,000 MW of batteries to store 3 terawatt-hours (TWh) or 3 billion kilowatt-hours of electricity. The amount of storage is approximately enough to meet the peak electricity demand for the entire United States for a period of 4 hours.

All together, wind, solar, and storage would be capable of providing 4,400 TWh per year–the amount of electricity generated annually in the United States–for an investment of $6 trillion over two decades.

The United States produces more than 700 TWh per year–about 17% of annual electricity generation–from existing wind, solar, hydro, geothermal, and biomass. Existing renewables would be capable of powering more than one-third to as much as one-half of the entire US passenger vehicle fleet with electricity.

If we had instead invested the $6 trillion we squandered on war in the Middle East, we would, two decades later, have made our grid more resilient with battery storage, and be generating 100% of our electricity with wind and solar. Moreover, existing sources of renewable energy would be sufficient to power a substantial portion of our passenger cars with clean, renewable electricity.

Incredible.

What a lost opportunity.
———-
Paul Gipe is a renewable energy analyst and the author of Wind Energy for the Rest of Us. He has worked with wind energy for the past four decades.

• United States Budgetary Costs and Obligations of Post-9/11 Wars through FY2020: $6.4 Trillion

• Cost of National Security, National Priorities Project

• Watson Institute of Public Affairs, Brown University, Economic Costs of War

• Beating Swords into Wind Turbines–or Solar Panels if You Like, December 29, 2007. This op-ed was originally posted on July 4, 2005 and then appeared at Renewable Energy Access.com (Now RenewableEnergyWorld.com) on July 11, 2005. This version has been updated with current figures for the cost of the war and estimates of its total direct and indirect costs (to the USA only).