Energy Return On Investment (EROI)

Published Mar 20, 2023

Definition of Energy Return on Investment (EROI)

Energy Return on Investment (EROI) is a metric used to assess the efficiency of energy extraction and conversion processes. It measures the ratio of the energy produced by an energy source to the amount of energy expended to produce it. This includes all energy inputs and outputs associated with energy production, such as the energy used to extract or transport raw materials for energy production or the energy required to produce and maintain energy infrastructure.

Example

To illustrate the concept of EROI in action, let’s consider oil extraction. Oil extraction requires significant energy inputs, such as the energy used to drill wells, transport crude oil to refineries, and refine it into usable products. The energy required for these processes is not typically included in calculations of the EROI of oil production.

However, as oil reserves become more difficult to access, these energy inputs are increasing. For example, extracting oil from tar sands, which requires more energy than conventional oil extraction, has a lower EROI. In addition, as energy infrastructure ages, more energy is required to maintain and repair it, lowering the EROI of those systems.

On the other hand, renewable energy sources such as wind and solar have relatively low energy inputs and can therefore have high EROIs. For example, wind turbines can reach an EROI of up to 18:1, meaning they produce 18 times the amount of energy used to build and maintain them.

Why the Energy Return on Investment (EROI) Matters

The EROI is an important metric for assessing the long-term sustainability of energy production and consumption. As fossil fuel reserves dwindle and become harder to access, the EROI of these energy sources is likely to decline. This means that more energy will be required to extract and refine the remaining reserves, potentially leading to higher energy prices and less accessible energy for everyone.

By contrast, renewable energy sources have the potential to maintain a high EROI over the long term, making them a more sustainable energy option. Understanding the EROI of different energy sources is critical for policymakers when making decisions about energy infrastructure investment, as well as for individual consumers interested in reducing their carbon footprint and energy costs.