This paper derives four major approaches from contemporary literature; furthermore, the difference in boundaries, and data requirement might indicate problems that should be subject to future researches. One of the biggest concerns of the contemporary generation is the so-called energy transition, i.e., the transitioning of the energy sector away from fossil fuels (FF) to more sustainable renewable energy (RE). In this regard, current discussions are surrounding the two main topics: firstly, whether and how such a transition can be economically profitable (or even feasible); and secondly, whether it would cause energy scarcity. Many scholars who concern themselves with the latter topic utilize the concept "Energy Return on Investment" (EROI) as a means to quantify the effect of the transition on the abundance of energy. Nevertheless, an EROI value on its own is hardly meaningful (except when it is smaller than 1:1, or higher than 50:1); scholars would be more interested in whether the EROI of RE has met or will meet a threshold value which would indicate its sufficiency to sustain the current economic growth and societal well-being, termed minimum EROI.
Table of Contents
List of Figures
List of Abbreviations
1 Introduction
2 Theoretical background
2.1 Energy Return on Investment - EROI
2.2 Minimum EROI and its meaning
3 Minimum EROI estimation approaches
3.1 Methodology
3.2 The oil-based approach
3.3 The net energy approach
3.4 The energy expenditure approach
3.5 The “quality of life” approach
4 Evaluation of the approaches
4.1 The importance of boundaries
4.2 The difference of data
5 Conclusion
Appendix A
Appendix B
List of References
List of Figures
Figure 1: Framework to estimate the useful energy to the society of oil
Figure 2: The Net Energy Cliff
List of Abbreviations
Abbildung in dieser Leseprobe nicht enthalten
1 Introduction
One of the biggest concerns of the contemporary generation is the so-called energy transition, i.e., the transitioning of the energy sector away from fossil fuels (FF) to more sustainable renewable energy (RE) (IRENA, 2021). In this regard, current discussions are surrounding the two main topics: firstly, whether and how such a transition can be economically profitable (or even feasible) (D'Alessandro et al., 2010; among others); and secondly, whether it would cause energy scarcity (Hall et al., 2014; White/Kramer, 2019; among others). Many scholars who concern themselves with the latter topic utilize the concept “Energy Return on Investment” (EROI) as means to quantify the effect of the transition on the abundance of energy. Nevertheless, an EROI value on its own is hardly meaningful (except when it is smaller than 1:1, or higher than 50:1); scholars would be more interested in whether the EROI of RE has met or will meet a threshold value which would indicate its sufficiency to sustain the current economic growth and societal well-being, termed minimum EROI.
This fact, once again, brings about a new challenge. What would be, then, the minimum EROI of society that we are looking for? Many attempts have been deployed on this quest; they follow different assumptions and utilize different methodologies. Surprisingly, to the best of the author's knowledge, no systematical synopsis and evaluation of them have been performed before.
This is problematic: how may succeeding researchers use the minimum EROI estimation of their predecessors for their study if they do not fully understand where and how it is calculated. And if the figure were misused and misinterpreted, how correct and reliable their subsequent studies could be? This circumstance merits the motivation of this paper. First, past approaches to estimate a minimum EROI shall be systematically summarized and presented. The summary should highlight the underlying idea, assumption as well as basic mathematical formula of each approach. Furthermore, an evaluation shall be made, which will clarify some fundamental differences between each of them.
Eventually, the paper derives four major approaches from contemporary literature; furthermore, the difference in boundaries, and data requirement might indicate problems that should be subject to future researches.
The rest of the paper is structured as follows: section 2 will briefly introduce the terminologies EROI as well as minimum EROI. In section 3, four approaches to estimate minimum EROI shall be presented. In section 4, their differences shall be critically discussed. Section 5 concludes.
2 Theoretical background
2.1 Energy Return on Investment - EROI
The terminology Energy Return on Investment (EROI), also known as Energy Return on Energy Investment (EROEI), was introduced firstly in the late 70s and early 80s, primarily through the works of Charles Hall, Robert Kaufmann, and Cutler Cleveland (Murphy/Hall, 2010, p. 103). It denotes the total amount of energy gained from an energy facility, i.e., a plant, a system, a technology, or even the energy sector of a country, in fractional relation to the total amount of energy required to build, operate, and dismantle it (Energy invested) (White/Kramer, 2019, p. 416). Thus, it is considered an indication of the quality of energy (Lambert et al., 2014, p. 154). The basic formula of EROI can be presented as follows:
EROI = Eout/ Ein[1]
with Eoutstands for the amount of gained and Einfor the amount of invested energy (White/Kramer, 2019, p. 417). Noted that EROI does not have a unit; nonetheless, Eoutand Einmust have the same unit (for instance Joule, kWh, or tonne of oil equivalent, to name but a few) so that the value is interpretable. An EROI value equals 1:1 indicates that the existence of the energy facility would not provide any net energy to society; and if it were smaller than 1:1, it may even take energy away. In contrast, a large EROI value, e.g., from 50:1 onwards, indicates that the facility is capable to provide net energy to society and even allows it to harness economic growth (Hall et al., 2014).
Various efforts have been made to quantify the EROI values of different fossil fuels (FF) as well as renewable energy (RE) sources. Recent meta-analyses from Hall and colleagues (Hall et al., 2014) and King and van den Bergh (King/van den Bergh, 2018) indicate that the values of the former group are still higher than the latter1 ; yet, the dynamism factor is moving in the RE direction, as EROI values of FF are decreasing, partly due to resource depletion (Hall et al., 2014, p. 146). This development merits scholars' urge for fostering a transition away from FF and to RE on the one hand (Ayres et al., 2013, p. 86), but causes others concerns of an energy loss due to a too rapid transition (Sers/Victor, 2018, p. 189; Moriarty/Honnery, 2016, p. 5).
2.2 Minimum EROI and its meaning
Lambert and colleagues (2014) define a minimum EROI as the smallest EROI value that society can still tolerate if it wants to satisfy its essential energetic needs2. This paper adopts that definition, but alters it as follows: a minimum EROI is the smallest EROI value that a specific society can still tolerate if it wants to satisfy its contemporary and locally essential energetic needs3. According to equation [1], we can understand that the minimum EROI concept implies that Eoutmust be greater than Einto a certain extent. One may ask, understandably, why the minimum EROI cannot take the value of 1:1? If this were the case, then any EROI value that is barely higher than 1:1, say, 2:1 or 3:1, would be considered sufficient for society. Yet, this is often far from the truth. The energy sector needs to provide energy for other sectors, but it also consumes a certain amount of that energy to maintain its operation and to keep producing new energy. If the EROI of society is barely larger than 1:1, then most of the energy that it produces would be reinvested rather than distributed (otherwise the energy sector could not keep producing energy and would have to cut back its operation, leading to further loss of energy), and little is left for the rest of society. Given the importance of energy to society and its economic activities (Lindenberger et al., 2001), the value of 1:1 cannot be the minimum EROI.
3 Minimum EROI estimation approaches
3.1 Methodology
To identify which approaches have been deployed to quantify a minimum EROI value, the paper starts with a literature search on two databases Web of Science and Science Direct using the keyword “Minimum EROI”. The keyword search is done for Title, Theme, and Content alike. During the course of the research, additional literature is collected using reference tracing. Results from the literature search are presented in sections 3.2 to 3.5.
To separate and categorize each approach, a common theme has to be found. Although the collected papers showcase various models in different contexts, almost all of them, apart from those that concern the oil-based approach, try to relate EROI to a socioeconomic indicator. This is fairly comprehensible: section 2.2 implies that the minimum EROI concept is closely related to the discussion about societal and economic well-being, which, at least in scientific research, is proxied directly and indirectly by these indicators.
All approaches are originally unnamed; the naming is made by the author of this paper to provide a better overview.
3.2 The oil-based approach
The first attempt to quantify a minimum EROI is carried out by Hall and colleagues (Hall et al., 2009). In their work, the authors hypothesize that the U.S. economy is 100 percent oil-based, and then further assume an EROI value of 10:1 for oil, based on a previous calculation of Cleveland (Cleveland, 2005)4. Nonetheless, they expand Cleveland's calculation by adding three more steps: firstly, they argue that EROI should not be estimated at the point of extraction (wellhead), but rather at the point of use, due to which losses and costs during refinery and transportation have to be taken into account. Lastly, a certain amount of energy should be distributed to create and use the energy services, since it is the energy services that are considered ‘useful' by the society rather than the energy per se. Figure 1 illustrates the whole process including both additional calculations. Numbers are adopted from the original paper.
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1 Hydropower is an exception in both studies, as its EROI (approx. 84:1) is one of the highest if not the highest EROI value of all energy technologies examined.
2 Another definition of minimum EROI is the smallest EROI value that an energy technology, e.g., coal, oil, wind or biomass, and so on, has to have so that it is still a net energy yielder (Murphy/Hall, 2010, p. 106 - 107).
3 The alteration can be justified, as the original definition appears to be loose, as the authors admit it themselves (Lambert et al., 2014, p. 165). A hunter-gatherer society would certainly display a different “essential energetic needs” compared to a 21st-century one (therefore “contemporary”); the same can be said the difference between a developing and a developed or underdeveloped nation (therefore “locally” and “specifically”).
4 It should be noted that no clear explanation is offered why explicitly oil was chosen for the estimation. The writer of this paper offers two possible explanations: firstly, oil accounted for roughly 39% of the U.S. primary energy consumption in the most recent five years leading up to the article's publication (2005-2009) (EIA, 2021). Secondly, oil is arguably easier to be quantified compared to coal or natural gas, which allows the authors to evaluate in their work how different EROI values might affect the economy.