Energy Returned on Energy Invested (ERoEI) – also sometimes referred to as EROI — is a key energy accounting metric that measures the net usable energy that can be obtained from some potential energy source after all of the various energy costs necessary to produce usable energy from the potential energy source have been subtracted from the estimated life time energy production of the potential source.

It is rapidly becoming a rather widely quoted statistic, but remains poorly understood by many people who are starting to use it or are becoming exposed to it for the first time. ERoEI is deceptively simple and seems very straightforward, but it masks a complex underlying computation that is subject to some important and arbitrary decisions. These underlying assumptions and boundary decisions have profound effects on the resulting ERoEI figure. For this reason, if for no other, it is important that as wide an audience as possible become more educated about what ERoEI means and how the many assumptions that go into a particular ERoEI calculation can lead to significantly different ERoEI figures for the same energy system.

Essentially ERoEI is a form of energy accounting that attempts to account for all the energy inputs needed over the entire life of an energy system from project inception to final decommissioning. It adds all of these necessary energy costs, without which no usable energy could be extracted from the potential source to an energy cost column for the energy being accounted for. On the “profit” column ERoEI accounting attempts to come up with a good estimate for the total energy production that a given system can be expected to produce over its entire useful lifetime. ERoEI is the ratio of the total estimated energy that can be derived from some system divided by the sum of all the energy costs required by the energy system in order to produce usable energy from it.

The formula for energy returned on energy invested is on the surface quite simple; it is: ERoEI = (energy produced) / (energy expended)

So Simple But for the Boundary Problem

In ERoEI calculations, an artificial system boundary must be drawn at some point. Where this system boundary is drawn can and in fact does have a large impact on the resulting ERoEI ratio. It is important to understand that not all of the incidental energy costs can realistically be accounted for and because of this the computed ERoEI will always tend to be higher than the actual real world ERoEI for the energy system being measured. This is because those energy inputs that lie outside the selected and artificial boundary are not counted.

Where to draw the system boundary? This is the essence of the boundary problem. And where it is drawn will produce very different ERoEI figures. This is why it is vital to delve in a little deeper and understand what boundaries where used in the computation of the ERoEI figure; otherwise one risks being fooled by numbers. For example having one ERoEI that was computed using a restricted system boundary thrown up against another that had a much wider system boundary that included the many indirect costs. This will always be a false comparison, but these kinds of fake comparisons are often used to promote one energy system versus another for example.

ERoEI Analysis Shows that Corn Ethanol is an Energy Sink Disguised as an Energy Source

Clearly if a given “energy source” has a marginal or negative ERoEI it is not an energy source at all, but is actually an energy sink disguised as an energy source. An prime and instructional example of an energy source that is thought by many to be an energy sink in disguise is corn ethanol. In fact, a widely quoted peer reviewed study by Berkeley’s Tad Patzek and Cornell’s David Pimentel says that corn ethanol requires 29% more fossil energy to produce than what you can get out of it – or an ERoEI of 1/1.29, which equals 0.77.

In 2002, the pro-ethanol USDA released a paper by Shapouri, Duffield, and Wang in which they claimed that the energy balance of corn-ethanol was 1.34. However this non-peer reviewed study has many serious flaws in it and has been the subject of much criticism. For example it grossly underestimates the embodied energy content of the fertilizer needed in order to grow the corn that is used to produce the ethanol. Furthermore it only can get to that marginally positive ERoEI by doing some very dubious energy accounting. It counts the total caloric value of the byproducts used as animal feed as energy and adds it to the corn ethanol’s energy production column.

ERoEI – Not As Simple as it First Seems and Apples and Oranges

As with so many things in life things get way more complicated and less clear when one dives into the details of how ERoEI is calculated. As the corn ethanol example has shown a politically motivated study, backed by a powerful and well connected lobby can use exceedingly dubious analysis and studiously ignore whole classes of energy inputs and exaggerate energy outputs in order to conjure up a favorable ERoEI. The study USDA paper alleging positive ERoEI for corn ethanol unaccountably chose to simply ignore the embodied energy costs of the ethanol plants themselves and vastly underestimated other important energy costs.

The moral of this example above is that one has to look quite closely at how an ERoEI figure was arrived at before giving it credence or comparing it to the ERoEI values for different energy systems and that one should always be aware that it is possible to jigger an ERoEI in either direction through deciding what to count and conversely what to exclude from the calculations. In other words choosing where to draw the system boundaries for the purpose of the calculation.

Does this make ERoEI useless as a metric? Of course not, but it does mean that a more careful analysis of ERoEI figures is required in order for them to be useful as a metric and even more rigor in order for the ERoEI of one energy source to be comparable with that of a very different kind of energy source. If not one runs the risk of comparing apples to oranges.

Further Factors that Need to be Considered When Looking at ERoEI

Energy is often quantified in thermal units – i.e. in BTUs or Quads for example. While this can be extremely useful and helps to compare energy of one kind with energy of another kind it also can obfuscate very important qualitative differences that have a very real bearing on what the usable energy being measured actually is. For example the thermal energy output of a nuclear power plant is much larger than the actual usable electric energy that can be generated by transforming that thermal energy in an inefficient process into electricity in a thermal electric energy generator. In fact only about 30% of the thermal energy produced by either burning fossil fuel or through fission in a nuclear reactor is actually converted into electricity. Another example illustrates how this has an impact on the final usable net energy produced. Heating oil that is used for heating has around three times as much usable net energy per unit as does the same or a similar fuel grade petroleum product that is instead burned in an engine to produce mechanical work.

When calculating the actual usable net energy it is important to understand how the energy will be used and what the final useful energy product that is being consumed.

© 2009, Chris de Morsella. All rights reserved. Do not republish.

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Author: Chris de Morsella (146 Articles)

After a decade performing as a lead guitarist for rock bands, Chris de Morsella decided to return to the career his uncle mentored him in as a youth....Software Engineering. Since that time he has thrown himself into his work. He has designed a compound document publishing architecture for regulatory submissions capable of handling very large multi-document FDA regulatory drug approval submissions, for Liquent, a division of Thompson Publishing. At the Associated Press, Chris worked with senior editors at facilities around the world, to develop a solution for replacing existing editorial systems with an integrated international content management solution. He lead the design effort at Microsoft for a help system for mobile devices designed to provide contextual help for users. Chris also helped to develop the web assisted installer for LifeCam2.0, the software for Microsoft’s web cam and developed late breaking features for the product He also served with the Rhapsody client team to redesign and build a major new release of Real Networks Rhapsody client product. His most recent assignment has been Working with the Outlook Mobile Time Management team for the next release of Outlook Mobile for the SmartPhone. Chris' interests are in green building and architecture, smart grid, the cloud, geo-thermal energy, solar energy, smart growth, organic farming and permaculture. Follow Chris on Twitter.

  • Marco Ferrara

    Greetings for this post Chris. Unfortunately EROI concept remains poorly understood by many people as you have written here, but it explains many things about energy technologies development perspectives.
    Many answer to the past, many to the future: the large development during the past of hydro large plant (like first renewable, it is understandable: EROI about 200-300), the peak oil (EROI OIL go down dramatically ), wind energy development (EROI 20-80).
    EROI means that because ENERGY IS THE KEY of our system, also material means energy. No Energy, no party. (No Martini no party is a famous spot with George Clooney in Italy..). No more energy available no development, than global crisis. It seems not difficult to understand, but someone in Italy tell us that it is a psycho problem…..
    It is a pleasure read post like it.

    • http://greeneconomypost.com chris

      ciao Marco,

      It is natural human psychology to want to ignore looming problems. By and large people are acting in a manner very similar to a drug addict — who tells his or her friends that everything is fine and that he or she has it under control — most people live in this state of denial choosing to ignore the looming energy realities that are bearing down on our planet.

      Just as the drug addict will often display emotions of anger and resentment towards those who try to help them come to terms with their addiction and recognize that their lives are out of control; so to many people who do not want to hear the facts of our current energy and resource reality. Bringing up the uncomfortable subject of rapidly diminishing energy and resource reserves as well as the collapse in the rate of discovery of new reserves, or speaking about the increasingly marginal poverty of the energy resources we are discovering, especially as measured by ERoEI, will usually cause most people to become angry and attempt to dismiss, ridicule, or otherwise diminish the messenger.

      It has always been hard to be a bearer of bad news or to question dogma, but sometimes the need to shake people from the stupor of continuing on just as they have done yesterday and the day before and for their entire lives makes doing this unpleasant work an unavoidable necessity. Business as usual is no longer an option for a tomorrow that is almost upon our world… if we want to have a living future that is.

      Chris