Monday, June 29, 2009

The Renewables Hump 6: EROEI of Solar and Wind

As my brief pause from posting may have suggested, I'm struggling with how to best tackle the next step in this series. To recap, so far I've been discussing the "true" EROEI of renewable energy sources--meaning the measurement with no artificial boundary for accounting--and the need and challenges for calculating this figure. My plan was: 1) work through a few price-estimated EROEI calculations (at least one recent solar and one recent wind project); 2) show that these price-estimated EROEI figures are too low to support envisioned transitions to renewable energy sources; and then 3) argue that, while this method of calculating EROEI is itself suspect, until we come up with a better method for calculating boundaryless "true" EROEI, we must seriously scrutinize the viability of the predominant transition vision.

I've been having a difficult time figuring out how to best make this into a solid argument. My initial desire was to use a very numbers-driven approach. I never intended price-estimated-EROEI to provide some verifiable, "true" EROEI figure, however (it is intended more as a reality-check backstop), so I've been concerned with proceeding on such a numbers-driven approach with price-estimated EROEI as the foundation. To be honest, I was hoping that, in writing this series, I would arrive at some far more accurate and transparent means of calculating "true" EROEI. Unfortunately, the result has been the opposite--while I am still convinced of the value of price-estimated-EROEI as a reality check, its inherent flaws have been well highlighted by my own efforts to refine it, and especially by the very thoughtful comments that I've received.

Therefore, I now think it's best to embrace this fuzziness--to use the price-estimated-EROEI in its originally intended role of reality check. While I'm concerned that my critique of the "renewables transition" will now be more logic-driven and less hard numbers-driven, I am increasingly OK with this shift (a decision process which, in part, explains my lack of recent posting). I've arrived at this conclusion because a logic-driven approach actually seems more true to form: I've been arguing for some time that "true" EROEI is fundamentally impossible from a nuts-and-bolts accounting perspective. Instead, we must use proxies to measure emergent phenomena--such as market price--to estimate its value.

That said, here's my current plan: Below I'll outline my calculations of the price-estimated-EROEI of one recent solar project and one (less) recent wind project. Next week, I'll argue the impacts--and uncertainties--of these numbers on the viability of the "renewables transition." Following that, I'll address a number of ancillary issues: an analysis of the minimum EROEI for society (drawing on, but to some extent disagreeing with Hall's work on the same topic), a discussion of the carbon-impact of the "renewables transition," and I'll conclude with, hopefully, some general guidelines for going forward amidst this uncertainty.

Solar Example: Downtown LA Solar PV Installation: This 2009 installation is my example for price-estimated EROEI calculation. I think it's a good example (no example is perfect) for several reasons: at 1.2 MW, it's modest in size, but large enough to reap economies of scale; because it is installed on an existing roof space, there is no land cost associated with the installation (that, in some circumstances, could present acquisition costs or environmental compliance/impact statment costs not truly representative of net energy issues); because it is in California, where the average cost of electricity (and especially peaking "sunny day" electricity that solar provides) is higher, it will provide a more conservative estimate; because it is located in the downtown of a major metropolitan area it will not require significant transmission investment to provide a true measure, and is therefore also more conservative. Finally, there are good cost and output numbers available for the site.

Basic data: 1.2 MW array installed 2009 in Los Angeles, cost $16.5 million up front (ignoring rebates/tax credits/incentives), projected financial return of $550,000 per year. At the rough California rate of $.15 per KWh, that's about 4 GWh per year (conservative).

Price-Estimated-EROEI Calculation: The $16.5 million up-front is, at $0.09/KWh (here using national average, as there's no reason to think that manufacturers would use primarily California peaking power to build this system), an input of 183 GWh through installation (I'm ignoring the realtively small maintenance costs here, which will also make the figure more conservative). If we assume a life-span of 40 years, then the energy output of this system is 160 GWh. That's a price-estimated EROEI of 0.87:1.

Wind Example: I've had a more difficult time finding a recent wind project where good data (on both cost and actual, as opposed to nameplate, output) is available. As a result, I've chosen a 2000 Danish offshore wind project at Middelgrunden. While up-front expenses may be higher off-shore (making the resulting EROEI more accurate for offshore projects than on-shore), I think this is a relatively modern installation (2MW turbines). If readers have more current projects with full data, please provide in the comments--another point for investigation is whether the price-estimated-EROEI of solar and wind have been improving or if they are holding relatively stead.

Basic data: Cost of $60 million, annual energy ouput 85 GWh.

Price-Estimated-EROEI Calculation: At the US national average rate for electricity ($0.09/KWh), the $60 million up-front energy investment works out to 666 GWh. Using a life-span of 25 years (and assuming zero maintenance, grid, or storage investment, making the result artificially high), the energy output comes to 2125 GWH. That's a price-estimated-EROEI of 3.2:1.

I'll let everyone chew on these numbers--and the various issues surrounding how they were derived--for the week. If you have access to similar numbers for other solar or wind projects (or numbers for tidal or geothermal), please provide them in the comments and we'll see if we can generate more figures. Next week I'll discuss the impact--and uncertainty--of these calculations.


Neil1947 said...

I don't think it is correct to assign the costs of a wind farm ($$) directly to electricity that can be purchased with same $$.
In US 94.5EJ/14.2Trillion GDP=6.6MJ/$GDP or 1.8kWh/$GDP. EIA gives wind farm overnight costs of $1915/kWh which produces 2.9MWh/year or 58MWh/20 years. That gives EROEI of 58/3.5=16.5:1
This is low, because most electricity is produced by burning FF so X3 more MJ are used, hence EROEI should be about 50:1

Neil1947 said...

You asked the question if wnd farms have an EROEI payback in months( as would be the case for an EROEI of 50:1) why do they take 20 years to give an economic payback?

I think part of the answer is that wind farms can pay back investments faster than 20 years. Infigen( an Australian wind farm company, the largest in Australia and 6th largest in US) develops wind farms with 15 year financing(P&I). If we use the $1915/kW figure from EIA(a little high) total repayments(financed at 6% according to annual reports) would be $2815. Over 20 years would produce 2.9MWhx20=58MWh for a levelized cost of $50/MWh. Infigens average price was $AUD95/MWh( about $US70/MWh). If the project was fully funded the payback would have been 9.4 years.Electricity prices have been rising about 5% per year so the payback will be less than 9 years.
This makes sense because only a small portion of the inputs(costs) od wind farm were energy(about 10% of GDP) hence we would expect a financial payback to be X10 longer than an energy payback.
If we use the price of wind power($70/MWh) we have; 1000kWh/ 1.8kWh/$GDPx$70, EROEI=8:1, lower than a cost basis because real cost is <$50/MWh( about $35/MWh)

Quesalid said...

Dear Jeff,

regarding the PV LA solar project, its obvious that the EROEI result depends on the initial upfront cost AND the average cost of electricity.
The LA project costs 16,5 M$ for 1,2 MW, which equates to 13,750$/kWp. This figure seem to me little high (at least for European market). In Italy, such a plant now costs 7,000$/kWp (assuming a change rate of 1,4 $/€). The total cost, in Europe, is 8,4M$ and the EROEI is 1,7:1 using $0,09/kWh. If we use €0,1/kWh (the average cost in Italy) we have $0,14/kWh which yelds to 2,6:1 EROEI

Jeff Vail said...


I think it's a valuable ratio to compare the $ cost of a wind farm to the $ value of the electricity that it will produce over its lifespan, for the reasons highlighted in my earlier post on price-estimated EROEI. Note also that post discusses the many flaws in the approach.

It may be well be that the actual cost of a nameplate KW capacity of wind generation is only $1915, but I'd like to see a fully up an running wind farm where that is the aggregate cost--I tried to find a more recent (and preferably on-shore and US-based) project for comparison, but I was only able to quickly find data on the older Danish project mentioned, which may well skew my numbers. As noted, it will be very intresting to see if, by this measure, the price-estimate-EROEI is improving over time, or (as has generally been the case with solar PV) the efficiency and technological improvements have been offset by an increase in price.

However, even if the cost of 1KW of nameplate capacity is $1915, then by my methodology that represents 21 MWh of energy. By your actual generation numbers for 1KW nameplate (which seem reasonable), that still works out to 21 MWh in : 58 MWh out, or a price-estimated EROEI of 2.76:1, and doesn't account for the accompanying transmission's energy requirement.

While I agree that there is an issue comparing energy as electricity to energy as a fossil fuel (e.g. coal), I think it is a reasonable comparison and doesn't warrant a x3 multiplier to EROEI: the number that we, as society, need to focus on is the realizeable EROEI, and comparing electricity to electricity does that.

I think, with regards to your second comment, that the explanation for financial payback being 10x that of energy payback, is actually more due to artificial accounting boundaries (e.g. not accounting for the full spectrum of societal support necessary to build the turbine). I agree that financial payback must be slightly higher to overcome time-value-of-money, but in part I think the reality is that, absent subsidies, tax-breaks, and mandates, the "true" financial payback is barely positive at all--some evidence of this is the boom and bust cycle in US wind-farm investment that tracks the availability of tax credits. Similarly, the higher financial returns in Europe that 1) piggyback on publicly owned grid improvements and 2) utilize various tarrif and credit subsidies...

Lonnie said...


I think that your assumption that the entire cost of the renewable is made of energy if one regresses far enough could be flawed enough to make a difference in whether the EROEI is less than 1 or greater than 1.

I will use the example of the LA solar project. One must assume that in the $16 million there is a profit. Simplified and exaggerated, should the profit be 20% and depending on what is done with that profit (spending it on a Net Jet fractional or putting it into the purchase of a conservation easement) would change the EROEI.

Neil1947 said...

The EIA gives the value of all US energy at final point of sale as $1375billion in 2008, 9.7% of GDP.

If we are going to use the price of say wind power being $1915/kW capacity surely we have to accept that 90% of the cost in not energy related. For example employee's wages perhaps 10% could be attributed to consumption of energy, similarly for profits or other inputs.

In the US half of that $1375billion energy bill is for oil based products,which have a low EROEI because of the low EROEI of obtaining oil at the well-head, refining losses and the additional,petroleum NG and electricity used in refining transporting and sale of gasoline, diesel heating oil and jet fuel.
Electricity generation has a high EROEI from primary sources and from coal even though 2/3 is lost because coal has such a high EROEI($26/ton=1,000 MJ/$).

According to this article more electricty/NG is used to refine one gallon gasoline than would be used by an EV to travel as far as a ICE vehicle does on one gallon! Clearly a lot more than 130MJ/gallon is required to produce 1 gallon of gasoline and electricity should be valued greater than gasoline on an energy basis.

ryan said...

great stuff, though the title "The Renewables Hump" conjures images of some sort of post-industrial eco-orgy... well, for me at least. and regardless of our ability to meet the energy requirements to maintain civilization with "renewable" resources we have little hope of avoiding the host of other massive catastrophes provoked by providing civilized humans with any type of energy resource. at this point in our planetary destruction investing in more energy of any kind would likely worsen the situation.

dr. eo wilson's comment in his 1976 work "on human nature" has become especially crucial to confront - "The species lacks any goal external to its own biological nature. It could be that in the next hundred years humankind will thread the needles of technology and politics, solve the energy crises, avert nuclear war, and control reproduction. The world can at least hope for a stable ecosystem and a well-nourished population. But what then?"

civilization seems to have been built up first on primate models, which manifested into cultures - symbolic representations of the inchoate self-image beneath hierarchical social organizations.
we constantly bounce these off each other without ever considering their value or implications... always to determine how one another fits into the extant social organization: "what do you do for a living?" gee, i dunno. i seem to be the manifestation of 3.85 billion years of evolution become reflectively aware of itself. i didn't realize i was expected to "do" anything other than autopoiesis.

if rhizome is the antidote, how would we achieve a mass cultural paradigm shift in consciou5ness away from the archaic self-image beneath the cornerstone of civilization? must our descendants learn the lesson the hard way through climate change, resource wars, and social/environmental collapse or do the tools of perception and expression, combined with the communicative abilities of modern technology have the potential to deliver the profound shift in self-image preemptively?

either way it should be entertaining...

Jeff Vail said...


I agree, the 0.7:1 or 1.7:1 may both be reasonable answers at the moment. For now, finance, not energy, is the constrained input, so that is the variable that is optimized (especially in light of subsidies). I think that, as energy becomes the "long pole in the tent," we'll see more broadly applicable numbers emerge with this methodology.

All that said, if the numbers converge on "less than 5:1" when we need "more than 5:1" to effectively transition, then it's certainly a valuable approach...

Jeff Vail said...


I agree that a profit is built in to the equation. That profit is necessary to pay the people who work on the project--regardless of whether they're the independent electrician (who truly needs that profit and uses it to eat and pay his mortgage) or the venture capitalist who finances the project (and then uses that profit to finance a lifestyle sufficiently luxurious to tempt others to put their money to similar use). So I think you can definitely reduce the profit to an energy input as well.

The interesting issue that you raise, though is whether a more centrally-planned economy (reducing these extreme levels of profit/consumption that drive finance) can produce renewable energy capacity with a better net-energy return than can a more market-driven economy (note, I'm not using absolutes here, as there's no such thing as an existing pure free market or pure central planning). I addressed this in my short essay Lenin & Lohan

There is at least some evidence (don't have the link on hand) that wind turbines manufactured in Brazil have a higher EROEI than those manufactured in Germany because the standard of living of the workers in Brazil is lower--and this makes sense, though I'm not sure it's a metric we want to strive to optimize!

Jeff Vail said...


How is 90% of the cost "not energy related"? That's the key take-away from this series, and the key flaw in the EIA's methodology: they're only looking at the cost of energy used within a very narrow accounting boundary (e.g. the electricity used at the manufacturing plant), and ignoring the vast majority (probably correctly about 90%) that is used more remotely.

The EIA doesn't, for example, account for the oil used by the dump truck that hauls the ore for component metals used in the manufacture of the machine tools in the manufacturing plant (among thousands of like examples). Yet without this input of energy, there is no end product. In fact, your 90% metric is probably fairly close to the general over-estimation of EROEI in standard calculation methodologies (such as those used by the EIA): standard numbers seem to be roughly 10x too high, so if the EIA arrives as 40:1 (by not counting the majority of the energy inputs), then 4:1 might be a more realistic number...

Jeff Vail said...


While I agree with your general assessment of the larger problems facing humanity, I do think that, through awareness of this course of development, we can (in theory at least) break free of its bonds.

In that sense, I don't see rhizome as an antidote, but rather as a means to stabilize our civilization (or what is left of it when we get that far) against these host of other threats you mention. Then, I think we can potentially begin to address this much more spiritual problem, beginning with an exploration of consciousness. Aldous Huxley's "Island" is the best book I have read on this general theme (and highly recommended, should you have some time on your hands in the near future)

ryan said...

Funny. i came across a copy of "Island" a few years ago when i moved into a house in the jungle in Costa Rica.. along with Julian Jaynes' "The Origins of Consciousness in the Breakdown of the Bicameral Mind." Both books changed my life and writing. I even threw in a Huxley quote in my last publication - "War, Waste, and Moneylenders: factoring social and economic instability into ecological catastrophe and the decline of western civilization"

at this point i do not think rhizome will necessarily stabilize civilization... of course we have to tease out what that term means. as we do it falls apart. technology will remain, but emerging social networks will combine the necessary behavioral development to ensure a survivable pop thorough the bottleneck.

so rhizome is mostly invisible to hierarchy as a "threat," right? i believe the other elements - the spiritual and receptive ones are even more deeply hidden.

Civilization depends on obedience to hierarchical authority systems - "gods" or "rulers." what will the upcoming generation think of these authorities as the civilized world falls apart? a novel, emergent rebellion has already taken root. but its buried in that oldest of human communicative modes - those of the aoidoi - the bards. recall Howard Bloom's breakdown of "diversity generations, conformity enforcers, etc..." who in a human population represents the most "receptive" units and most powerful "diversity generators?" fox news anchors and obama may wave their fists and rant, but the younguns are listening to another tune...

maynard from the popular band "Tool" seems to have already been hard at work (among many others) putting the pieces together - from the individual level of conscious evolution to the masses.

check out the song 46 + 2 ( a reference to the human karyotype - 44 autosomes and 2 gametes)

I wanna feel the change consume me,
Feel the outside turning in.
I wanna feel the metamorphosis and
Cleansing I've endured within

My shadow
Change is coming.
Now is my time.
Listen to my muscle memory.
Contemplate what I've been clinging to.
Forty-six and two ahead of me.

I choose to live and to
Grow, take and give and to
Move, learn and love and to
Cry, kill and die and to
Be paranoid and to
Lie, hate and fear and to
Do what it takes to move through.

See my shadow changing,
Stretching up and over me.
Soften this old armor.
Hoping I can clear the way
By stepping through my shadow,
Coming out the other side.
Step into the shadow.
Forty six and two are just ahead of me.

to the masses: from "Reflection"

I have come curiously close to the end, now
Beneath my self-indulgent, pitiful hole

Defeated, I concede and
Move closer
I may find comfort here
I may find peace within the emptiness, how pitiful

And it's calling me...
It's calling me...

And in my darkest moment, fetal and weeping
The moon tells me a secret, my confidant
As full and bright as I am
This light is not my own and
A million light reflections pass over me
The source is bright and endless
She resuscitates the hopeless
Without her we are lifeless satellites drifting

And as I pull my head out I am without one doubt
Don't wanna be down here serving my narcissism
I must crucify the ego before it's far too late
I pray the light lifts me out

Before I pine away...

So crucify the ego, before it's far too late
And leave behind this place so negative and blind and cynical
And you will come to find that we are all one mind
And capable of all that's imagined and all conceivable
So let the light touch you, so let the words spill through
And let them pass right through
Bringing out our hope and reason

Before we pine away...

ryan said...

of course we cannot expect mass culture to immediately read and understand "a theory of power" start building resilient communities, and accept whatever enlightenment beyond the ego means then apply it in life... but this is not necessary for conscious (r)evolution.

contrary to what previous rock n rollers proposed: "we built this city, we built this city on rock and roll," it seems we will bring down this city (and the entire nation-state paradigm perhaps) on rock and roll. heh.

many of the 630 million global coastal residents will be forced to migrate within the next few decades if climate change continues as the same pace. how will hierarchies maintain control of these populations? who among the future generation will adhere to the rules and standards of civilized culture through the collapse?

rhizome will become adaptive. its already popping up in the strangest places. and the scars left on the scorched earth in the wake of industrial civilization will serve as constant reminders...

consider what the "diversity generator" is attempting to express through the lens of memetics:

"And in my darkest moment, fetal and weeping.
The moon tells me a secret. My confidant.
'As full and bright as I am, this light is not my own
A million light reflections pass over me'
It's source is bright and endless.
She resuscitates the hopeless
Without her we are lifeless satellites drifting"

"this light is not my own" what "i" have been taught by mother culture to perceive as "my" thoughts and feelings originated elsewhere - they are the "million light reflections." when a prophet, bard, or (r)evolutionary passes through that good old path of enlightenment and finds that hedonism and self indulgence cannot satiate the pain and forces which drive him/her down deeper, they tend to run into a similar conclusion: the "light" which saves them is something that has passed on through the ages... and then they, too must pass on that "light" if they hope to contribute to the system (which they usually do).

the myna bird calls louder now in the 21st century: "Karuna, Karunaaaaa, Dammit!"

keep up the great work

see ya around

ryan said...

for more concrete evidence of the power of music to move the social organism - check out Rage Against the Machine's You Tube videos from their performance at the Denver DNC.

this was the last song before the band and veterans against the war lead thousands of people to protest at the DNC.

i was up in the balconey looking down at the angry swarm

it reminded me of an army ant bivouac right before they march ... stimergy of a different brand, eh?

Neil1947 said...

We know the total world crude oil production and the US consumption and the gasoline and diesel and jet fuel sales, allowing for refining losses and adding these to final products there is no way final sales figures are out by a factor of X10.
Oil used by ore mining is accounted for in the 82million barrrels/day of world crude oil production or the 19million boe consumption in US. EIA gives consumption by retail, commercial and industry, in total it adds up to 9.7% of GDP. Lots of GDP has very low direct energy input(banking, software, education)

Anonymous said...