EROI — A Tool To Predict The Best Energy Mix

I’m happy to see that Forbes contributor James Conca has taken on the central EROI issue — what John Morgan termed the The Catch-22 of Energy Storage. In today’s essay EROI — A Tool To Predict The Best Energy Mix Jim engages directly with the reality that affordable utility-scale storage does NOT make solar PV and biomass into big winners in the future low-carbon energy portfolio. Jim contributed an effective new chart that combines both the with-storage and without-storage EROI profiles. The dotted line at EROI = 7 represents an estimate of the minimum performance required to support a modern industrial society, as represented by the OECD countries.

NewImage

Both John Morgan and Jim Conca based their analysis on the important 2013 paper by Weißbach et al (ungated preprint) published in Energy, Volume 52, 1 April 2013, Pages 210–221.

I want to emphasize that not only is this paper a major conceptual contribution to the energy policy, it is also a model of transparency. Included in the supplementals of the Weißbach et al. paper – are the spreadsheets containing all the materials reference data, assumptions and the EROI and EMROI computations. This means that any motivated reader can audit every detail of the energy inputs, material requirements and computations.

If any reader objects to any of the assumptions they are free to amend the Weisbach spreadsheets to compute their own preferred EROI profiles.

An excellent example of the transparency benefit of the Weisbach spreadsheet contribution is Keith Pickering’s GETTING TO ZERO: Is renewable energy economically viable? Keith used the Weißach model to analyze the progressively improving EROI of nuclear fission. 

With 100% centrifuge, nuclear will have an EROI of 106, EMROI of 166 according to Weißbach’s analysis.

Here’s an earlier 8/13/14 Seekerblog post on the Morgan and Weißach work.

Transforming the Electricity Portfolio: Lessons from Germany and Japan in Deploying Renewable Energy

Brookings held the captioned event to launch a new policy brief (download PDF). I listened to the audio podcast while cycling Saturday. There is also a transcript available.

When I study the Brookings graphic showing the fossil increases in Germany and Japan it makes me really sad. But the majority of citizens are happy that the hated nuclear is dead or dying.

I think Germany is driving their economy off a cliff. As RE penetration increases their generation costs will go convex. Germany is already around 27% RE, with “greens” talking about going to 100% as fast as possible. But the man on the street thinks this is all grand. It is political suicide for a politician to propose reversing the anti-nuclear Energiewende.

To my surprise the Brookings scholars speaking at the event do not seem concerned. E.g., they quote a new NREL study proposing a pathway to 80% RE. Among the “lessons learned”:

Implications for the United States:

Policymakers must work to build a baseline consensus on national energy objectives and then develop and implement consistent, durable and clear policy mechanisms to achieve those objectives

The U.S. needs to elevate environmental goals as part of its overall energy objectives—in particular addressing climate change through reduction of greenhouse gases—and link these environmental goals to economic and national security issues

Renewable energy needs to be considered a national asset, with the capacity to balance multiple objectives

Brookings is a big place. Evidently it's possible for the RE group to be unaware of other Brookings research just published in May this year “The Net Benefits of Low and No-Carbon Electricity Technologies” Charles Frank, summarized in the blog Why the Best Path to a Low-Carbon Future is Not Wind or Solar Power.

This is a placeholder for a longer post when I have time to write it. Check out the audio or transcript and the brief. What do you think?

 

Biomass, solar and wind cannot sustain an advanced society


EROIs of all energy techniques with economic “threshold”. Biomass: Maize, 55 t/ ha per year harvested (wet). Wind: Location is Northern Schleswig Holstein (2000 full- load hours). Coal: Transportation not included. Nuclear: Enrichment 83% centrifuge, 17% diffusion. PV: Roof installation. Solar CSP: Grid connection to Europe not included. Source: Weißbach et al., Energy 52 (2013) 210

Since I first read the Weißbach et al paper, I’ve been eagerly awaiting publication of John Morgan’s article, first published in Chemistry in Australia. Fortunately Barry Brook has republished John’s article as a guest post. Here’s a paraphrased summary:

Wind and solar cannot sustain an OECD level society. Adding energy storage buffers the variability, but further reduces the EROI below the economic limit. Therefore solar and wind can reduce the emissions of fossil fuels, but cannot eliminate them. They offer mitigation, but not replacement.

If we want to cut emissions and replace fossil fuels, it can be done, and the solution is to be found in the upper right of the figure. France and Ontario, two modern, advanced societies, have all but eliminated fossil fuels from their electricity grids, which they have built from the high EROEI sources of hydroelectricity and nuclear power. Ontario in particular recently burnt its last tonne of coal, and each jurisdiction uses just a few percent of gas fired power. This is a proven path to a decarbonized electricity grid.

But the idea that advances in energy storage will enable renewable energy is a chimera – the Catch-22 is that in overcoming intermittency by adding storage, the net energy is reduced below the level required to sustain our present civilization.

I suggest you go straight over to Brave New Climate: The Catch-22 of Energy Storage. And follow the comments – there are already some excellent contributions and additional resource links. One important resource is included in the supplementals of the Weißbach et al. paper – that’s the spreadsheet containing all the materials reference data, assumptions and the EROI and EMROI computations. Total transparency — after several hours working through the spreadsheets I cannot find anything to criticize. If I do find some issues I’ll add updates here.

UPDATE  Keith Pickering wrote an analysis of Weißbach et al here GETTING TO ZERO: Is renewable energy economically viable? I liked Keith’s summary of how wind dilutes the higher EROI of higher value sources like hydro:

Wind is a tricky case. If you ask most people, they will tell you that we don’t currently have energy storage for wind. In fact we do, but the buffering for wind comes from natural gas powerplants, which are typically built at the same time wind is deployed. When the wind dies, the backup gas plants are turned on, to keep the grid power reliable. Thus the energy storage for wind is embodied in the natural gas that isn’t burned when the wind turbine is producing peak output.

This means that wind, as it’s used now in the US, isn’t really zero-fossil. It’s a hybrid system that’s part wind, part natural gas. And considering the availability of wind (30% is typical for a wind turbine), most of the energy actually comes from the fossil side of the equation. We’re using the wind to offset some of the CO2 emissions from the gas plant (which is good), but instead of getting to zero, we’re just walking toward the cliff instead of running toward it.

Denmark currently is one of the most wind-energy-intensive countries in the world, which works because they buffer their wind energy against hydroelectric power from Norway and Sweden. When the wind is blowing in Denmark, they export electricity to Sweden, which then can turn down its hydro plants (thus keeping more water stored in the reservoirs behind the dam). When the wind dies, Sweden turns up the taps on the hydroelectric production, and exports that stored energy back to Denmark. It’s a great zero-fossil system, but it’s only possible because of the unique geography that places a flat windy country right next to a couple of wet mountainous countries.

Finally, it’s important to note that the grid-buffering sources for wind (hydro in Denmark, gas in the US) both have a higher EROI than wind itself. Thus these hybrid systems do make economic sense, but that’s partly because the buffering portion makes economic sense on its own. Essentially, these hybrid systems dilute the EROI of hydro or gas, in order to subsidize the EROI of the wind portion of system. For the hybrid gas system that makes sense, because the reduction in CO2 is worth it. For the hydro-buffered system, the question is more problematic. In any case, it’s clear that if wind had to be buffered with a non-generating storage-only system, the economics would be difficult to justify.

Keith also has a very concise summary of the increasing EROI of nuclear fission:

One reason previous studies on nuclear have been all over the map is that it’s a moving target: the EROI of nuclear has been rising rapidly during the past 20 years (and will continue to rise) as the industry switches from gas-diffusion enrichment of uranium, to centrifuge enrichment (which is 35 times more energy efficient). Since uranium enrichment is a major part of energy input, this makes a huge difference. A nuclear plant using 100% gas diffusion would have and EROI of 31, EMROI of 34, comparable to coal. Weißbach’s numbers above are based on 83% centrifuge, 17% diffusion. The World Nuclear Association projection is that there will be no more diffusion enrichment anywhere in the world by 2017. With 100% centrifuge, nuclear will have an EROI of 106, EMROI of 166 according to Weißbach’s analysis. In other words, the switch from diffusion to centrifuge roughly quadruples the overall energy efficiency of nuclear power.

Beyond that, there is a new laser enrichment process being developed called SILEX which promises to be 10 times more energy efficient than centrifuge. And even beyond that, some Gen IV reactor designs (the fast neutron reactor, and the liquid-fuel thorium reactor, or LFTR) don’t use enrichment at all, and could therefore come in at EROI of about 114, EMROI of 187.

Keith used the Weißbach et al supplementary spreadsheets to do these calculations.

Why the Best Path to a Low-Carbon Future is Not Wind or Solar Power

Figure A. source Economist Sun, wind and drain: Wind and solar power are even more expensive than is commonly thought

Figure B. source Charles Frank The Net Benefits of Low and No-Carbon Electricity Technologies

Figure A and B summarize some of the conclusions of the recent paper by economist and Brookings senior fellow Charles Frank. The paper might not have attracted much attention outside the usually wonkish energy policy circles. But The Economist wrote a full page review which quickly became a lightning-rod for much shouting by pro-renewables activists. There are three levels for you to study the results — in increasing order of difficulty:

  1. Economist: Sun, wind and drain: Wind and solar power are even more expensive than is commonly thought
  2. Brookings blog post by Charles Frank: Why the Best Path to a Low-Carbon Future is Not Wind or Solar Power
  3. Brookings paper by Charles Frank: The Net Benefits of Low and No-Carbon Electricity Technologies [PDF]

The Economist article will not be a favorite with Angela Merkel, as is nicely summarized in the last paragraph:

The implication of Mr Frank’s research is clear: governments should target emissions reductions from any source rather than focus on boosting certain kinds of renewable energy

I’ve read all 182 tedious comments, which I cannot recommend because the majority are non-referenced complaints from boosters. Approximately none of the Economist commenters had read the Frank paper. So my take is you can skip #1, read #2 for a good introduction, then work your way through #3.

Figure A is a nice graphic produced from Figure B which is the “money table” of the Frank paper. I’ve included Figure B so you can quickly grasp what the Cost vs Benefit bars mean in the graphic. There’s a minor error in the graphic: the Wind cost/benefit bar is missing the mark for “net benefit” which is a negative $25k/MW not zero.

What Figure A and B claim to tell us is that in the USA new combined-cycle gas plants offer the greatest net benefit given a large set of assumptions. Dr. Frank’s paper is a model of transparency — every assumption and parameter is referenced and further qualified by end-notes. Even though this is a simplified methodology for estimating net benefits, there are still a heap of assumptions that must be understood in order to assess where the results might be applicable. I’ll summarize a few that I think are critical:

  • Net benefits are calculated on the assumption that new generation replaces on average 22 hours/day of coal non-peak generation and 2 hours/day of single-cycle gas peak generation
  • This is USA-centric, based upon EIA 2013 data
  • Therefore relatively very low methane (gas) prices
  • Therefore relatively high insolation, moderately high wind resource

For energy policy wonks I will highlight a few weak spots in the paper:

  • Most important is that Frank’s Adjusted Capacity Cost does not fully reflect the negative reliability impact of VRE.
  • I will speculate that Dr. Frank chose to avoid the complexity of Capacity Credit to keep the presentation accessible. (Capacity Credit estimates the amount of firm, dispatchable generation that can be replaced by VRE without reducing reliability.)
  • Dr. Frank does not examine how Net Benefits vary with VRE penetration. Detailed modeling shows that increasing VRE has large effects on reliability.
  • Capacity Credit for VRE generation is inversely proportional to penetration. The more wind/solar you build the less marginal value you get.
  • The Frank paper is directed at a future powered by less coal (that’s good) but not a zero-carbon future (which we must achieve).
  • If we build a strategy for the goal of Zero Emissions we will still likely build Gas CC in quantity because it is fast to build, relatively cheap and politically acceptable. But looking out a century to achieving Zero will help us focus on ramping up nuclear as fast as feasible and safe. We cannot wait 50 years to get started.

Why do I think the Frank paper is important? This is a serious effort to help policy-makers understand why subsidies supporting wind and solar are such an expensive and inefficient way to reduce carbon emissions. And Dr. Frank illustrates why traditional LCOE analysis overvalues wind and solar. And yes, the headline results are US-centric, but there is a serious effort to support generalizing the results by:

Sensitivity to Carbon Prices: In Tables 9A and 9B, the net benefits for both wind and solar are negative. However, if the carbon price is increased from $50 to $61.87 or above, then the net benefits of wind are positive (as shown in Table 11). Above $185.84, the net benefits of solar are also positive.

My interpretation of that result is that solar costs at least $185/ton CO2 avoided. For a society with finite resources, the cost/ton of CO2 abatement is a rather important number.

 

Sensitivity to Natural Gas Prices: The results in Tables 9A and 9B are highly sensitive to historically volatile natural gas prices. In the United States, the average annual cost of natural gas to electricity producers reached a high of $9.01 per million Btu in 2008. The average monthly cost reached a low of $2.68 in April 2012 (EIA, November 2013, Table 9.10.). The variation among countries, and the effect on net benefits, is illustrated in Table 12.

Note that nuclear becomes the highest net-benefit policy when gas prices exceed about $9/MBtu. Current UK prices are above that level, which is where US prices were only six years ago.

My bottom line is: this paper is good starting point. Please keep in mind that the true cost of variability for wind and solar is significantly understated, as the value of VRE falls as penetration increases. Still, I appreciate that adding complete VRE analysis would have made this paper much more cumbersome.

Fortunately, there has been some very good work on VRE and System LCOE in the past couple of years. In a future post I will get into the research of Lion Hirth et al and the Potsdam Institute for Climate Impact Research. For the eager here are three good references for in-depth modeling studies of high penetration VRE:

  1. Hirth, Lion, The Optimal Share of Variable Renewables. How the Variability of Wind and Solar Power Affects Their Welfare-Optimal Deployment (November 8, 2013). FEEM Working Paper No. 90.2013. Available at SSRN: http://ssrn.com/abstract=2351754 or http://dx.doi.org/10.2139/ssrn.2351754
  2. Ueckerdt, Falko and Hirth, Lion and Luderer, Gunnar and Edenhofer, Ottmar, System LCOE: What are the Costs of Variable Renewables? (January 14, 2013). Available at SSRN: http://ssrn.com/abstract=2200572 or http://dx.doi.org/10.2139/ssrn.2200572
  3. Hirth, Lion and Ueckerdt, Falko and Edenhofer, Ottmar, Why Wind is Not Coal: On the Economics of Electricity (April 24, 2014). FEEM Working Paper No. 39.2014. Available at SSRN: http://ssrn.com/abstract=2428788 or http://dx.doi.org/10.2139/ssrn.2428788