The Renewables Hump: Digging Out of a Hole  

Jeff Vail has started a series looking at what I've long called the "EROEI hole" problem - making sure we don't leave the transition to renewables too late and find ourselves stuck in a situation where we have shrinking production of fossil fuels which are produced at ever lower EROEI values, thereby making constructing an alternative energy infrastructure a lot more problematic than it would be today - The Renewables Hump: Digging Out of a Hole.

In the first post in this series, I introduced the general notion that renewable energy requires an up-front investment of energy, and that this may dramatically impact our ability to transition to a renewable-energy economy because the transition effort will initially exacerbate the very energy scarcity that is its impetus. Beyond this general notion that the transition to renewables first requires exacerbating our current energy scarcity, the time that it takes a renewable source of energy to return the up-front energy invested in it becomes especially critical. Here’s a quick example (for the simplicity of these examples, I'm assuming that 100% of energy requirement is up-front with no maintenance requirement):

Let’s say you want to transition 1 million Barrels of Oil Equivalent per year (mBOE/y) of current global energy to a renewable source this year. If this renewable source (a concentrating solar power plant, for example), has an EROEI of 20:1, and will generate for the full-power equivalent of 40 years, then it will take roughly 2 years for the solar plant to return the energy invested in it. Over the course of 40 years it will generate 40 mBOE, and it will take the equivalent of 2 mBOE of energy invested up-front to enter operation. While this return-on-investment seems excellent, this up front investment of 2 mBOE is still very significant—it is an increase in global energy consumption roughly equal to the decrease caused by the current economic crisis—but the reward of a mBOE of renewable generation capacity every year for the next 40 years seem well worth the price. With this kind of EROEI, a transition to a renewable energy economy seems feasible, and it may be possible to affect such a transition quite quickly.

What happens if the EROEI of that renewable is actually only 4:1? Now it takes 10 mBOE to bring this renewable capacity into operation, and you won’t pay this back for ten years. In the meantime, where are we going to find an extra 10 mBOE beyond what we currently need to fuel our economy? The answer is that, of course, we won’t. We’ll instead reallocate our existing energy supply, displacing the most highly elastic 10 mBOE in demand. Prices will spike. And this is only to create 1 mBOE of renewable capacity each year. That’s enough to compensate for a decline rate of about 1.2% in global oil production—far lower than most post-peak projections, and less than ½ of 1% of total global energy use. Of course, renewables with an EROEI below 4:1 would present an even less feasible scenario.

This is an extremely simplistic example intended only to introduce the problem (more detailed examples will follow), but it highlights two issues:

First, the type of net-energy barriers illustrated by these examples only become an issue when significant amounts of renewable capacity are in the pipeline at once. If we continue to bring insignificant amounts of renewable energy online each year (compared to what will be needed to affect a transition within a few decades, or to keep pace with fossil-energy descent), then the impact of the up-front energy investment will be similarly insignificant. This may seem like a tautology, but it explains one important point: this “renewables hump” is a novel issue lurking below the surface of current discussion precisely because we have not yet encountered it with current renewable energy projects—and we won’t until we begin a serious effort to transition to renewables. At that point, failure to understand this problem may be catastrophic.

Second, EROEI--how we measure it, and what its true value is for a given technology--is critical to the feasibility of any transition to renewable energy. If EROEI is high enough, then it is possible to rapidly transition to renewable energy sources and get ahead of the peak oil (and peak fossil fuels in general) decline curve, especially because renewables will soon be able to provide enough energy to bootstrap their own production to a significant degree. However, lower EROEI values will make transition increasingly challenging, and below some threshold a low net-energy value will render transition entirely impracticable.

In order to facilitate a transition of our civilization to renewable energy, renewables must offer more than a high EROEI ratio alone. Time to pay back energy invested also becomes critical, as does generation/production life after payback—these figures must be considered separately and in unison. Consider, for example, the difference between two renewable sources, both with an EROEI of 5:1, but one with a lifespan of 10 years and another with a lifespan of 50 years. The 10-year option may appear inferior, but it represents a payback time of only 2 years—this means that the renewable can begin to bootstrap the energy for its replacement at a much more rapid pace, making it far more scaleable from a net-energy perspective. Conversely, the 50-year option won’t pay back its initial investment for 10 years, making it much more difficult to scale rapidly enough to address time-critical issues such as peak oil without an increased (and likely impractical) up-front investment of energy. To consider the mechanics of transitioning to renewable energy, we must be aware of all these measures: EROEI ratio, payback time, production/generation lifespan.

Now that the problem has been more clearly defined, the future course of this series will make more sense. In the next post I will look at problems in EROEI measurement methodology, and discuss both the potential to address system-boundary issues and the challenges posed by our inability to precisely measure EROEI. In the following two posts, I will analyze the possible EROEI measures for current renewable energy options presented by solar and wind energy. I will also discuss the transition potential presented by these technologies. If I have time, I will also look at the EROEI for geothermal, tidal, nuclear (with a discussion of the issue that fission reactors are non-renewable, and that so-called "fast-breeder" reactors have yet to be proven), and biofuels. More likely, however, I will skip these later renewable options for the moment to continue with this series as a whole, and revisit them individually at a later date...