Charles A. S. Hall: Will EROI be the primary determinant of our economic future?

Charles A. S. Hall: Will EROI be the primary determinant of our economic future?

Charles A. S. Hall, Professor Emeritus, SUNY College of Environmental Science and Forestry, State University of New York Syracuse, N.Y. 13210 Diese E-Mail-Adresse ist vor Spambots geschützt! Zur Anzeige muss JavaScript eingeschaltet sein!

The view of the natural scientist vs the economist

Charles A. S. Hall

Two philosophical worldviews as to how the future of energy will unfold play out within the confines of economics and science. Each is reflected profusely and erratically in the blogosphere. The first is that of human determinism associated with human cleverness and technological cornucopianism, the second assumes that human determinism is largely underwritten by energy subsidies, and will ultimately be constrained by larger forces of nature. These two world views are playing out now in two principal, and as yet unresolved, issues related to energy.

The first is whether prices are all that is needed to make decisions about energy and the second is whether to decrease impacts of climate change or depletion we can replace the carbon-intensive fossil fuels that dominate our energy use with something else, such as biomass, photovoltaics and wind turbines. Presently most of these decisions are based on economic analyses by corporations and government agencies except as influenced by the legislated terrain. But prices are hugely influenced by subsidies, and the presence or absence of externalities, and reflect far more the present than a possibly very different future.

Energy Return on Investment (EROI, sometimes EROEI) is a tool (or metric) that avoids some of the problems with financial analysis while generating additional insight into the factors that influence present prices and future availabilities. EROI is simply the energy delivered from a process divided by the energy required to get it. A lower EROI means that society must divert more of its total economic activity to get the energy to run the rest of the economy. EROI integrates the counteracting effects of depletion and technological improvements.An important issue is "the energy cliff". Changes in EROI at relatively high values, above say 10:1, have much less impact than changes at lower values.

Historically the view of economists has been that depletion is not an issue for the future of economic production because the higher prices that will result will encourage a reduction in use and the substitution of alternatives, including lower grade resources. EROI provides a bullet proof response to the economists' argument that ever lower grades can be used indefinitely. Curiously it is based on economist David Ricardo's concept that humans use the best resources first. As higher grades are depleted the energy required increases. At some point the energy input is as great as the energy output, and the resource is no longer economic in any sense except where some cheaper fuel is used to get more expensive fuel. There are many important oil (and oil substitute) resources that are already at or near this point, including many of our legacy oil wells in the US and China, shale oil (kerogen), corn-based ethanol, and tar sands.

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Michel de Rougemont am 18.10.2017
What way forward?

According to the second law of thermodynamics, the EROI of a closed system can only be lower than unity.

Losses take place in translation so that, at the end of the game, all energy produced and consumed dissipates as useless heat at ambient temperature. So, let us not imagine we can beat this, waste we are and will be.

The least efficient way of “producing” energy is the photovoltaic (PV) process: current commercial panels convert approximately 15 % of the incoming irradiation into useful electricity. According to a recent study (Ferroni & Hopkirk, 2016), the EROEI of this technology (including the necessary storage) is inferior to one. So what?

The solar irradiation is, at human view, only limited by the surface needed for its capture. If the energy supply would solely consist in PV, then one may say that just a few more solar panels are required. However, to construct those additional panels requires also more energy than what they can deliver, thus more panels, more energy …until the whole Earth is covered with panels without satisfying the supply equation.

This explains that, currently, more efficient energy sources are used to build these inefficient panels, a cross technology subsidy. If PV panels were Catalans they would not demand independence.

On the long run, only technologies with an inherent EROEI significantly superior to one will be affordable.
This can be achieved by a mix of more efficient technologies (conversion yield from raw to useful), lower energy content of the equipment (reducing the input part), and longer lifetime of the equipment.
Besides of fossil fuels that are bound to be exhausted (to EROI below 1), and hydroelectricity that has limited capacity potential, the best deal should come from nuclear power of the 4th or higher generation.

It is primarily a technological contest[, although now biased by ill-fated subsidy regimes that orient technology into a truly unsustainable dead end.

Achieving an economically viable threshold is also important, and quite critical when allocating scarce resources (intelligences and $$$) to bad projects.
In any case, politics cannot beat physical limits.


Ferroni, F., & Hopkirk, R. J. (2016). Energy Return on Energy Invested (ERoEI) for photovoltaic solar systems in regions of moderate insolation. Energy Policy, 94, 336–344. https://doi.org/10.1016/j.enpol.2016.03.034

According to the second law of thermodynamics, the EROI of a closed system can only be lower than unity. Losses take place in translation so that, at the end of the game, all energy produced and consumed dissipates as useless heat at ambient temperature. So, let us not imagine we can beat this, waste we are and will be. The least efficient way of “producing” energy is the photovoltaic (PV) process: current commercial panels convert approximately 15 % of the incoming irradiation into useful electricity. According to a recent study (Ferroni & Hopkirk, 2016), the EROEI of this technology (including the necessary storage) is inferior to one. So what? The solar irradiation is, at human view, only limited by the surface needed for its capture. If the energy supply would solely consist in PV, then one may say that just a few more solar panels are required. However, to construct those additional panels requires also more energy than what they can deliver, thus more panels, more energy …until the whole Earth is covered with panels without satisfying the supply equation. This explains that, [b]currently, more efficient energy sources are used to build these inefficient panels,[/b] a cross technology subsidy. If PV panels were Catalans they would not demand independence. On the long run, only technologies with an inherent EROEI significantly superior to one will be affordable. This can be achieved by a mix of more efficient technologies (conversion yield from raw to useful), lower energy content of the equipment (reducing the input part), and longer lifetime of the equipment. Besides of fossil fuels that are bound to be exhausted (to EROI below 1), and hydroelectricity that has limited capacity potential, the best deal should come from nuclear power of the 4th or higher generation. It is [b]primarily a technological contest[[/b], although now biased by ill-fated subsidy regimes that orient technology into a [b]truly unsustainable dead end[/b]. Achieving an economically viable threshold is also important, and quite critical when allocating scarce resources (intelligences and $$$) to bad projects. In any case, politics cannot beat physical limits. Ferroni, F., & Hopkirk, R. J. (2016). Energy Return on Energy Invested (ERoEI) for photovoltaic solar systems in regions of moderate insolation. Energy Policy, 94, 336–344. https://doi.org/10.1016/j.enpol.2016.03.034
Gäste - Philippe Huber am 20.10.2017
Na ja, es gibt auch andere Meinungen

Es ist auf jeden Fall eine ganz spannende Herausforderung für die Menschheit und wer Recht gehabt hat, werden wir erst in ein paar Jahrzehnten erfahren.
Siehe aber Mal zu diesem Thema einen interessanten Outlook unter:
https://www.dnvgl.com/events/energy-transition-outlook-98625

Es ist auf jeden Fall eine ganz spannende Herausforderung für die Menschheit und wer Recht gehabt hat, werden wir erst in ein paar Jahrzehnten erfahren. Siehe aber Mal zu diesem Thema einen interessanten Outlook unter: https://www.dnvgl.com/events/energy-transition-outlook-98625
Markus Saurer am 20.10.2017
Erst Wissenschaft, dann Meinungen....

und nicht umgekehrt, bitte.;)

und nicht umgekehrt, bitte.;)
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