EROEI.COM

What is EROEI?

E R O E I ...what does it mean?

No, it is not something that those dwarfs with the funny caps sing.

It means: Energy Returned On Energy Invested

OK, what does THAT mean?

Here is an easy explanation. First, let's break this concept down into smaller chunks:

ENERGY INVESTED is this -

In order to ACQUIRE energy, it TAKES ENERGY.
In order to TRANSPORT a form of energy, TAKES ENERGY.
In order to STORE energy, TAKES ENERGY.
In order to USE energy, also TAKES ENERGY.

ENERGY RETURNED is this -

After you have taken into account all the energy used above...how MUCH ENERGY do you have left? OR How much energy does it actually COST in order to USE a particular form of energy?

Is that a bit clearer?

Here is an example using money:

Say that you have $100 that you want to INVEST at a bank.
The bank is offering a time deposit account for 6 months that pays 10% interest.

Sound like a good deal?

Well, what if you didn't have a car and you lived in a part of the city that didn't have buses. It costs you $4 to catch the train round-trip to go to the bank and deposit the money.

At the end of 6 months, you pay another $4 to catch another train to the bank to withdraw your money and interest.

Still sound like a good deal? Let's do the math:

$100 + 10% interest = $110 at the end of 6 months.
MINUS $4 for the first train and another $4 for the second train: $8 total.

If you subtract the $8 from the $110 that leaves a total of $102;
or a RETURN on your INVESTMENT of only 2%.

Not such a good deal, huh?

Yet people think that with energy (gasoline, electricity, natural gas, etc.) this concept does not apply. WELL IT DOES...BIG TIME!

The actual simple mathematical expression of EROEI is this (NOTE: The authors of the report use the term EROI which is Energy Return On Investment - a shorter but identical concept to EROEI.):

(Charles Hall, Pradeep Tharakan, John Hallock, Wei Wu and Jae-Young Ko,
Advances in Energy Studies Conference, Porto Venere, Italy, September 2002)

A more complex (quality corrected) version of the equation is this:

"...where is the quality factor for fuel type i at time t and E^o and E^c are the thermal equivalents of energy outputs and energy inputs, respectively. We construct Divisia indices for energy inputs and outputs to account for energy quality in the numerator and denominator. The prices for energy outputs (oil, natural gas, natural gas liquids) and energy inputs (natural gas, gasoline, distillate fuels, coal, electricity) are the prices paid by industrial end-users for each energy type (US Department of Energy, 1997)." (Aggregation and the role of energy in the economy, Cutler J. Cleveland, Robert K. Kaufmann, David I. Stern, Center for Energy and Environmental Studies and Department of Geography, Boston University, Centre for Resource and Environmental Studies, Australian National University, Canberra, 1999)