Renewables,EROI Why Money Doesn´t cut it when making Energy Investment Decisions!

Why Money is such a bad metric for Energy investment decisions. EROI, Towards an Energy-Based Economics. More Notes from the Digital Coalface.

This is a notebook post of discussions on and critiques of Energy generation replacement solutions for when Oil / Gas and Coal Run out? The basis of our calculations are best informed in terms of EROI (Energy Return on Investment) The Production of future energy plant from the present optimal energy portfolio is very important and also a Grown-up discussion about Nuclear energy ( Including and particularly Thorium) must be påart of that discussion.
It is energy that provides prosperity not monetary measures of the distribution of energy wealth. Energy Infrastructure like other fundamental infrastructure provides the fundamental building blocks for our current level of Civilisation it is a common good and Energy Markets distort the realities of what optimal levels of energy output can be. The more energy we can produce the better, high levels of EROI lead to better wellbeing outcomes. 

Assumptions of Artifical scarcity and indeed actual reductions in energy outputs of energy resources leads to the destruction of human life, similarly, waste generated by a need to provide artificial scarcity to support monopoly profit levels of price also lead to environmental destruction.
I have already started compiling notes on this question in these 3 previous blogs.

The English version of THE MONEY SYNDROME is now available in the United Kingdom on a books-on-demand basis. It can be ordered from Fast-Print Publishing ISBN: 9781844268573
The majority of literature dealing with problems in the economy or associated fields, such as society and the environment, concentrates mainly on decisions made in economic, financial or political institutions and organizations and offers solutions on these planes. Little attention, however, is paid to money itself, which is usually taken for granted and only appreciated as a useful tool in everyday life. After all, what should be wrong with it? And yet, looking closely at various phenomena, at processes that don’t develop as they are supposed to, it is almost always possible to find the root cause in a tiny flaw in the structure of this otherwise handy tool. The conflict arises from the contradiction between money as a medium of exchange and as a means for saving the value. It cannot fulfil both functions at the same time. Getting storable money back into circulation demands interest and compound interest.

Chapter 18 The Scale of Interest in the Corporate Sector “The entrepreneur is a worker who earns his wages with the profit of the enterprise, which remains from the gains after the banks have deducted the interest payments, which the entrepreneur has to first take from the workers. Insofar, the profit of the enterprise is not an antithesis to wage-labour, but only to interest.” Karl Marx * In the corporate sector, too, the interest burden has increased over-proportionally in step with indebtedness. This is true when measured not only against the output, but also in relation to tangible assets procured through credit, or credit secured by the value of tangible assets (see Chapter 15). According to documents of the Federal Authority of Statistics, the interest burden of West German manufacturing companies for the year 1970 was 37 billion DM and amounted to eight per cent of net worth, for 1993 with an interest burden of 272 billion DM it amounted to 15 per cent. If the interest burden of 272 billion DM was allocated to the 23 million employees in the corporate sector, then in 1993 every workplace had to bear an interest burden of 12,000 DM, in 1988 – that is five years earlier and at the beginning of the high-interest phase – it was just half the burden. To what extent the gap widened between net worth and interest payments made by West German companies in the years between 1970 to 1993 (after that the West German figures were no longer reported separately) can be seen in figure 49.

How large is the total of interest-bearing assets? The replaceable fixed assets (buildings and equipment) in Germany were estimated to have a net replaceable value (current value!) of 10,300 billion DM at the end of 1996/beginning of 97. Together with supplies in the economy and public civil engineering, it amounts to 12,500 billion DM. If the land and economically productive resources are added to an amount of 3,500 billion DM (the current market value of real estate in the hands of private households alone in the year 1997 was given to be 2,500 billion DM by the Deutsche Bundesbank!), then the result is a sum of 16,000 billion DM for the total value of national tangible fixed assets. These figures then describe the situation for the year 1997, which is shown graphically in figure 51. To make the ratios clearer, the areas in the figure are proportional to the approximate DM-figures. The dimension of the total tangible assets in Germany is shown as a rectangular block and the aggregate output as a circle. A quarter of the assets block is apportioned as privately owned share – largely as housing property – with a value of 4,000 billion DM. The remaining part of the block, which has a value of 12,000 billion DM, corresponds to the economically productive and interest-bearing tangible assets. Straddling both parts, as of 1996, the total level of debts standing at 8,500 billion DM, is shown as the grey area. Figure 51

As one seldom can have a look into private calculations, the calculations of some public prices are given, as examples, as they appear in the budget of the City of Nuremberg for 1991 in figure 52.

If labour costs and depreciation are particularly low, then interest charges dominate the pricing to quite a large extent – as in the calculation of the rent. If one assumes an interest rate of only 5 per cent and a depreciation rate over a hundred years (as is usually assumed for residential housing), then the owner or tenant – over and above the one-off one hundred years depreciation charge – has to pay, in addition the construction costs, virtually five times over due to interest charges. Or, in other words (and this holds good for all tangible assets!), all material commodities used in a political economy are financed once again every twenty years as a result of interest charges. And that quite apart from the depreciation costs, which guarantee the asset replacement and which are included in all prices! For example, if rents are felt to be too high, the reason would not be the unscrupulous character of the landlord (the houses owned by the trade union ‘Neue Heimat’
were not any cheaper, either!), but the fact that all tangible assets in our economic system have to be serviced with interest payments throughout their lifetime. Attention is drawn to the fact that in all the calculation examples up to this point, the total interest cost that is included in them has not been considered, but only those costs that have entered the final level of the calculation. The material costs entering the calculations consist, once again – see figure 19 – of labour costs and capital costs to varying extents, which in turn are formed at the respective previous level. In contrast to value-added tax, the amounts of which that have been charged in each succeeding step can be identified, this is not the case with hidden interest charges. There is only a constantly increasing accumulation.

Wind Power–Some Basic Facts

August 12, 2017
tags: wind power
By Paul Homewood
We see many glowing articles about wind power, and renewable lobbyists, such as Renewable UK, are often given undue space in the media to peddle mistruths.
This article is designed to lay out some of the basic facts. It will naturally concentrate mainly on the UK, but I believe it will have relevance elsewhere too.
Renewable lobbyists like to emphasise how “clean” wind power is, and how many tonnes of CO2 are saved.
Others will argue that wind farms are a long way from being environmentally friendly, and arguably save little CO2 anyway.
I am not going to get into these debates, as they are subjective, and therefore not relevant to the objective analysis.



Windpower and other Renewable energy sources are not mutually exclusive to fossil fuels. Using a straight Dollar metric is actually also an arbitrary and silly metric. Monetary values are variable and also highly subjective.
Comparing Renewables to Extracted Hydro Carbons demands a rather more sensible metric such as energy returned on energy expended.
When one looks at these questions particularly with respect to energy poverty concerns it has been clear for some considerable time that due to the exponential function Human energy needs will outstrip the ability of Traditional sources to provide energy requirements sufficient to help with bringing developing nations up to the developed world’s standard of living.
This Video from 1976 makes the case very well.
with respect to Grid and balancing the grid etc, Battery technology and other ways of storing peak output from Solar and Wind and tidal such as hydrogen fuel cells or Off Peak/Peak electric vehicle network pooling all point to the good news that if like me you are a cornucopian in outlook and Libertarian by doing more with less and harnessing all our options we should be optimistic about the future. The monetary metric of economic progress is highly flawed and for that reason, I think the Author of this piece leaves a lot from his analysis.
  • If you care about the poor even a little bit you should realizes that the best and simplest way to make their lives better is through cheap energy. There is no C in AGW so stop hurting the poor by denying them the basic building blocks of prosperity.
  • 123

    • Prof Keen is a fine Monetary Theorist and not so strong on the ol´ Atmospheric Physics. Readers and watchers might find the Rocket Science Journal of assistance in Explaining what is singularly garbled in this presentation at 46 mins.
      On the Limits for Growth please also take account of the criticisms of the assumed boundary conditions, again a source of confusion in Prof Keens explanations in this video.
      Robert Solow from MIT argued that prediction in The Limits to Growth was based on a weak foundation of data (Newsweek, March 13, 1972, p. 103). Allen Kneese and Ronald Riker of Resources for the Future (RFF) stated:
      The authors load their case by letting some things grow exponentially and others not. Population, capital and pollution grow exponentially in all models, but technologies for expanding resources and controlling pollution are permitted to grow, if at all, only in discrete increments.[27]
  • Hamsters running wheels in sufficient quantity can power a city. Should we be pursuing hamster power?
    I cringe everytime I hear the frankly idiotic statement of “pursuing all our options”. Only an ignorant or willfully blind person says that. Intelligent ones says “pursuing all our practical and well-functioning, independent options”. My senators fall under the former catagory and I cringe at the stupidity of those elected to office daily.
  • This may be of interest:
    Especially Phase 2 where they conclude:
    The negative impact of cycling on overall plant emissions is relatively small. The increase in plant emissions from cycling to accommodate variable renewables is more than offset by the overall reduction in carbon dioxide (CO2), nitrogen oxide (NOx), and sulfur dioxide (SO2). In the high wind and solar scenario, net carbon emissions were reduced by one-third.
    Operating costs increase by 2%–5% on average for fossil-fueled plants when high penetrations of variable renewables are added to the electric grid.
    From a system perspective, these increased costs are relatively small compared to the fuel savings associated with wind and solar generation.
    Cycling costs vary based on penetration level and wind/solar mix.
  • Using a straight Dollar metric is actually also an arbitrary and silly metric. Monetary values are variable and also highly subjective.
    Money is actually the best, most reliable, and unbiased indicator. If a company can generate electricity, pay for all the inputs, and make a profit the total economic utility has been increased over the raw inputs. If the company cannot earn a profit total utility has not increased.
    • How so? The worlds money supply has doubled in the 9 years since the 2008 financial crisis, Incomes have not doubled and neither have most peoples savings. The transfer function of wealth through Interest Charges and also priority and first mover advantage with those with first use of newly created debt based bank credit make Money as biased a unit as well as a highly variable unit of measurement you could hope to invent, of course you do not need to invent it because it already exists.
      “”Who hasn’t experienced the following? Just the other day
      it happened to me! Just like any other weekend, I went
      to the supermarket to replenish my empty pantry and as
      always, I made the mandatory stop at the fresh produce
      section, where I placed some tomatoes in one of those
      little plastic bags that you tear from a dispenser. As
      always, I went to one of those electronic scales full of
      those colourful figures that represent the different
      produce: I put the bag on the scale and pushed the key
      with the little tomato on it. And oh my God, the
      following message appeared on the screen! “Error: This
      scale has run out of grams. Please excuse the
      inconvenience”. What a pain and just at the worst
      moment! But then again, we all know that given the
      times, grams are scarce…””
      Introduction to Technocracy – 1933
      discussions — of ‘value,’ of fluctuating prices, of the gold standard, of changing interest rates, of items of pecuniary wealth which are at the same time items of debt — are
      merely discussions looking toward a readjustment of the factors which prevent them
      The problem of analysing political choices against the metric of a Monetary measure is the Money as a Thing is most certainly a Variable and as any good technologist, scientist or metrologist will tell you a unit of measurement has to be clearly defined and fixed.
      The dollar. He notes that it is a variable. Why anyone should attempt, on this earth, to use a
      variable as a measuring rod is so utterly absurd that he dismisses any serious
      consideration of its use in his study of what should be done.
      He also considers ‘price’ and ‘value’ and the fine- spun theories of philosophers and
      economists who have attempted to surround these terms with the semblance of meaning.
      These terms, like the monetary unit, may have had meaning to men in the past but they
      mean nothing whatsoever to the modern technologist. The standard of measurement is
      not relevant to the things measured; and the measuring rod and the things, measured as if
      they were stable, are all variables.
      This comparison of different energy solution uses ERIO
      The Energy Returned on Invested, EROI, has been evaluated for typical power plants representing wind
      energy, photovoltaics, solar thermal, hydro, natural gas, biogas, coal and nuclear power. The strict exergy
      concept with no ”primary energy weighting”, updated material databases, and updated technical procedures
      make it possible to directly compare the overall efficiency of those power plants on a uniform mathematical
      and physical basis. Pump storage systems, needed for solar and wind energy, have been included in the
      EROI so that the efficiency can be compared with an ”unbuffered” scenario. The results show that nuclear,
      hydro, coal, and natural gas power systems (in this order) are one order of magnitude more effective than
      photovoltaics and wind power.
      ERoEI, EROI, energy return on invested, energy intensity, energy payback time, life cycle assessment
      This is from 2013 and storage solutions to utilise peak generation of both wind and solar and to provide supply when generation is not possible to have improved since 2013 and will continue to improve. This is another interesting thing about the Time value of money basis of comparison it leads to short term solutions being preferred over long term ones explained by Berard Lietaer here.

      I Made these interactive Quizzes based upon the Positive Money Quiz By David Faraday
      and the money creation Survey of MP´s
      For people who are surprised with the claims I make above please take the quiz see how much you know about money? many people are surprised about how little they really know.
    • Hi, It doesn´t add up, that is a great article. With respect to the Boundary conditions assumed and implied the techniques of analysis simply need to be developed and implemented. As the article points out Green Fascist Misanthropes should not be allowed to push their agendas against Coal and Gas whilst I agree with Greens that Fracking and Tar sands are something we can afford and should leave in the ground for environmental health reasons. ( both Human and ecological).Hydro Electric and Thorium Nuclear will I am sure to be figuring in our energy future as will wind and solar Solar breeders pose some very interesting possibilities, as do circular economy approaches to Energy Production Plant.
      EROEI under rapid growth[edit]
      A related recent concern is energy cannibalism where energy technologies can have a limited growth rate if climate neutrality is demanded. Many energy technologies are capable of replacing significant volumes of fossil fuels and concomitant greenhouse gas emissions. Unfortunately, neither the enormous scale of the current fossil fuel energy system nor the necessary growth rate of these technologies is well understood within the limits imposed by the net energy produced for a growing industry. This technical limitation is known as energy cannibalism and refers to an effect where rapid growth of entire energy producing or energy efficiency industry creates a need for energy that uses (or cannibalizes) the energy of existing power plants or production plants.[37]
      The solar breeder overcomes some of these problems. A solar breeder is a photovoltaic panel manufacturing plant which can be made energy-independent by using energy derived from its own roof using its own panels. Such a plant becomes not only energy self-sufficient but a major supplier of new energy, hence the name solar breeder. Research on the concept was conducted by Centre for Photovoltaic Engineering, University of New South Wales, Australia.[38][39] The reported investigation establishes certain mathematical relationships for the solar breeder which clearly indicate that a vast amount of net energy is available from such a plant for the indefinite future.[40] The solar module processing plant at Frederick, Maryland[41] was originally planned as such a solar breeder. In 2009 the Sahara Solar Breeder Project was proposed by the Science Council of Japan as cooperation between Japan and Algeria with the highly ambitious goal of creating hundreds of GW of capacity within 30 years.[42] Theoretically, breeders of any kind can be developed. In practice, nuclear breeder reactors are the only large scale breeders that have been constructed as of 2014, with the 600 MWe BN-600 and 800 MWe BN-800 reactor, the two largest in operation.
  • I for one am glad that the power supplied to the hospital I have spent the last 3 days in was from coal generation! There is no wind tonight and no turbines within a hundred miles. There are no solar panels on the roof of the hospital and it is nighttime. So all you grid-scale wind and solar alternative supporters can take a hike.
    • Get well soon, here’s some interesting stuff which may or may not re-enforce your preferences.
      For high ölevels of energy to be available for increased production the new technologies as they develop will actually be most welcome. The Climate Change AGW Nazis can take a Hike I agree with you but so can debt-based fiat money and Energy monopolies, Localised Grid technology will be a great boon to SME and entrepreneurial Economies, The Bureaucrats are very scared of this as off-grid/ Localised Permaculture and autonomous local economies will make centralises control by taxation very difficult.
      The Scientific and technological question is quite apart from the Political Economy questions my own entrepreneurial Instincts embrace both localised power production and decentralised Cryptocurrencies.
      • The traditional grid is basically local, with transmission lines providing balancing and backup capability in the event of local maintenance or failure. The renewables grid is basically long distance, requiring much greater transmission capacity and routing alternatives. Governments raise most of their taxes on incomes and sales and have little difficulty in doing so. It will be the green utility companies that depend on being able to screw their customers for government-mandated subsidies that have most to lose from any move away from grid connection. Their production will be in harmony with the off-grid stuff – the need for reliable backup is the one thing that does remain if you go off-grid At small scale, that’s a fossil fuel powered generator, or a grid connection to reliable nuclear or fossil fuel power.
    • Much of the time when Wind turbines are stationary it is because the grid is not calling for power and the turbine blades shed load so as not to generate.
      solar, of course, relies on Sunlight so of course do not generate at Night. When the wind does not Blow of course turbines do not produce
      If you look at the comment I had an exchange with an Older Gent from The Welsh Valleys where I myself was born, there are over stated cases for Renewables and there are also very questionable Energy Pricing schemes in Australia as laid out in the discussion I had there.
      The modus operandi should put people first and adopt horses for courses. Let’s not cook our own books to compete with mendacious Climate Alarmists and Misanthropes.
      • this data suggesting that Wind Turbines are somewhat more profitable even with out subsidies than your Kettle boiling reasoning seems to suggest? In the pat 12 months Cheyne court it is claimed has produced just shy of Ten Millon Ponds sterling worth of Electricity.
        The CO2 Warming Schtick is very annoying and I am with you on that but it seems to me that where we complain of the ´Ópposition´cooking the books we need to be a little more careful with our own data.
      • ¿Qué? Wind gets priority dispatch unless there are transmission constraints, in which case production is curtailed and compensation paid. Transmission constraints occur when wind generation is close to maximum – there simply isn’t the transmission capacity to route the power to centres of demand. For reasons of safety, turbines will be feathered and still rotate (but produce no or much reduced power) in these conditions. They will NOT be stationary.
        You can see curtailment in action in this chart that compares forecast wind generation with actual – at high levels of forecast, actual generation is curtailed (in the UK because of lack of transmission capacity from and through Scotland):
Wind turbines are strictly an 18th Century technology, and a bad one at that. The future of energy production is obviously molten salt reactors. China and India recognize that fact and will likely beat us to the market. As I recall, China, had been errecting windmills at a fast pace and was continually being cited (along with the usual nominee – Denmark) as an enlightened nation (China was actually most enthusiastic about nuclear power, not wind, which, as I recall was concentrated well away from the coast and larger population centers) . A few months ago, I recall that China issued a ban on any new windmills because they were disrupting their grid.
The fallacy that wind proponents (who seem to lie more than even global warmists) advanced were always “studies” that “proved” that a grid with 35% wind power would not be disrupted – the grid “could handle it.” Never mentioned were the actions and cost required for the grid to “accept 35% wind”.
    • Hi Arthur, I completely accept the premise that some advocates of Wind Energy are more than capable of lying and overstating their case, that said Balancing Grids and Storage of excess capacity are possibilities and Smart CHarging and Localised Grid network technology are all more than capable of ironing out technical difficulties. I do subscribe to the saying there are no problems only Solutions and Better questions lead to better answers.
      I too convinced about the potentials of Molten Salt )( Thorium) reactors but also believe that localised networks will in some areas see the benefits of other renewables meeting the demands on some cases.
      China is a Command and Control economy, I do not wish to see that in the west, The Washington Consensus under Debt Based Fiat money and financialised Capitalism is pretty much Stalinist now as well though with this is mind I am very keen to see all new energy solutions particularly those that do not barriers to entry are developed to their fullest potential including WIND.
      My view is that we can not afford to ignore any energy solutions which are viable in terms of becoming Breeder sources of Energy without externalities. Hinkley Point in the UK is a very silly idea and very last century too.

      FLow cell Technology and new Battery Technology are all making leaps and bounds in progress, there is a lot of good stuff happening in the Energy Business and I do not mean Fracking and Tar Sands both of which I think are doing more harm than good.
      • Without externalities? Really, maybe you should look at these a little closer I think you would find just a few externalities that you may have missed, like pollution during production, pollution during decommissioning, Noise pollution, wildlife destruction, damage from outages and many more. That being said, arbitrary use of an inefficient means of generation with its added cost is an externality in itself affecting the least capable in society of deal with the cost. Externalities caused by government intervention on the market for arbitrary reason is the most difficult of externality to overcome because the is no mechanism to effect change or recoup lose. You are creating a cost to effect a change for an imagined externality through the use of government power to oppress the most oppressable and the only actual effect you are having is to redistribute wealth to the most wealth sectors in our society from the least. Great job genius!
        How about instead of reading a bunch of BS from a bunch of socialist disguising themselves as economist you actually think through the process.
      • It would really be good to see the EV townies put their money where their mouths were and only use electric vehicles; after all, they tell us that EVs are so much better than any other vehicle. Consider having to evacuate Houston with all the cars electric and power outs and torrential rain and you have a 500 mile stop start drive. Not possible. The escape routes would be blocked with bricked EVs with no power
        A drive from London to Edinburgh not possible without an overnight stay.
        Describe a workable way for all the on-street parked cars to charge
        Yes a townie with no real need for a car can virtue (and money) signal with flashy toys. But for anyone that needs to drive any distance in all weathers, EVs are extremely unlikely to ever be capable.
    • this site has a lot of data on the UK wind and other alternative energy generation sectors.
      Calculating a sinking fund over a 20 or 25 year life period is easy enough.
      With Both Batteries for storage and also other storage solutions such as Water reservoir/Gravity systems or Hydrogen production will allow for peak generation storage instead of load shedding for turbines.
      Refurbishment and Circular economy techniques for re use and re purposing of plant are also factors, Re Gausing Magnets and SO forth are all doable especially if one adopts an energy based metric of measurement and not the flawed and artificial metrics of Internal rate of return and discounting based upon time value of money which are completely false metrics especially in a complementary technology smart network system where it is understood that energy generation decisions are simply not Mutually exclusive.
      This is a very interesting Paper, it makes for quite sobering reading for the Renewables Zealots but is not without its pluses for cornucopian arguments and distributed network enthusiasts.
      The Energy Returned on Invested, EROI, has been evaluated for typical power plants representing wind
      energy, photovoltaics, solar thermal, hydro, natural gas, biogas, coal and nuclear power. The strict exergy
      concept with no ”primary energy weighting”, updated material databases, and updated technical procedures
      make it possible to directly compare the overall efficiency of those power plants on a uniform mathematical
      and physical basis. Pump storage systems, needed for solar and wind energy, have been included in the
      EROI so that the efficiency can be compared with an ”unbuffered” scenario. The results show that nuclear,
      hydro, coal, and natural gas power systems (in this order) are one order of magnitude more effective than
      photovoltaics and wind power.
      ERoEI, EROI, energy return on invested, energy intensity, energy payback time, life cycle assessment
  1. RE-posting – Moderator, my original post disappeared into the ether. 2nd time lucky?
    Thank you Paul Homewood – an excellent article.
    You have described a system to compensate wind power operators that is utterly insane – only a gang of corrupt/idiot politicians could dream up such madness.
    You say “average utilisation was 28%”. Is this the same definition as Capacity Factor? It would appear so, equal to {total actual power output)/(total rated capacity assuming 100% utilization).
    However, the true factor that reflects the intermittency of wind power Is the Substitution Capacity*, which is about 5% in Germany today. This is the amount of dispatchable (conventional) power you can permanently retire when you add more wind power to the grid. In Germany they have to add ~20 units of wind power to replace 1 unit of dispatchable power – utterly uneconomic and nonsensical!
    Regards, Allan
    In 2004 two major German studies investigated
    the size of contribution that wind farms make
    towards guaranteed capacity. Both studies
    separately came to virtually identical conclusions,
    that wind energy currently contributes to the
    secure production capacity of the system, by
    providing 8% of its installed capacity.
    As wind power capacity rises, the lower availability
    of the wind farms determines the reliability
    of the system as a whole to an ever increasing
    extent. Consequently the greater reliability of
    traditional power stations becomes increasingly
    As a result, the relative contribution of wind
    power to the guaranteed capacity of our supply
    system up to the year 2020 will fall continuously
    to around 4% (FIGURE 7).
  2. @BobBoder, Whats sauce for the goose is sauce for the Gander so externalities need to be added on all analysis of all solutions. You miss the point regarding alternative energies not being mutually exclusive to other forms of Energy production. My case is we need all of these solutions to be pursued. The Monetary Metric is flawed, you must concede that Money is a variable the EROI paper I linked to makes the point.
    All Economics is Political, your lapse into scorn and rudeness does nothing to advance an argument, beats me every time how anyone ever thinks rudeness bolsters their argument, Genius?
    • Roger;
      You are a fraud, economics for the person raising his family is not politics, economics of a company trying to survive competition so it can make payroll is not politics, your BS about externalities is just another way for you to make up cost structures so you can justify doing what you think is right. For all your talk of externalities you are still just justifying re-distributing wealth from the poor and working class to the wealthy and connected, you are a poser trying to baffle the gullible with a bunch of BS and at the same time trying to convince yourself that you are virtuous. You never noticed that at the end of every “externality” there is someone unconnected to process getting rich? I have seen an awful lot of people being made poor by responses to imaginary “externalities”.
      Do me a favor if you believe so much in the BS you are spewing take your money and invest it, but leave the money that I earn and have to pay in taxes out so it can be put to a real and practical use other than making the likes of Al Gore rich.
      • Bob, Economics at a domestic level and economics at a societal and Government level are two quite different Questions.
        Take these Money Quizzes and tell me how you get on.
        I Made these interactive Quizzes based upon the Positive Money Quiz By David Faraday
        and the money creation Survey of MP´s
        Also Bob, you only have to refute arguments with arguments, no number of insults of the person advancing arguments or counter-arguments diminishes the arguments put forward. Arguments are defeated by evidence, not insults.
        Now, Bob, you have produced ample evidence for me to call you rude, your allegations are simply Ad hominem and speculative on your part, in short not a great marker of the confidence you have in your own case.
      • Bob,
        “For all your talk of externalities you are still just justifying re-distributing wealth from the poor and working class to the wealthy and connected….”
        Spot On!
      • Roger
        Societal and Governmental economics are born on the back of domestic economics.
        Let me ask you, how much of your domestic economic fortune has you tied up in renewables. You seem all to ready to take my tax dollars and invest in renewables to solve a problem that doesn’t exist. If you believe so strongly in renewables invest all you want and reap the benefit from it. But for you to invent a bunch of “externality” cost to justify using the power of the government to force bad choice on everyone else is the height of hubris.
    • RogerLewis
      “This is a significant amount of Oklahoma’s GDP and caused Oklahoma legislators to reassess the situation after figuring out they didn’t have enough money in the budget to fund Oklahoma schools adequately, and they decided to pass a law stopping subsidies for any new Windmill Farms, thus saving billions of dollars in subsidy payment in the future.”
      Is this externality figured in your calculations?
      • Bob, I am not an advocate of subsidising crony capitalists in any industry, whether it be energy production or Banking. Oaklahoma made the right decision , schools are way more important an investment in the future to trash for some political hobby horse.
        The wider question about EROI in society is well set out in this paper.
        “There is evidence too that once payments
        for energy rise above a certain threshold at the national level (e.g.
        approximately 10 percent in the United States) that economic
        recessions follow (Hamilton, 2009; Hall et al., 2009; Murphy et al.,
        2011). Despite the best intentions of improving net energy balances
        for a developing nation, the large-scale introduction of renewable
        energy generation may have too low an EROI and may prove too
        expensive to facilitate continued growth in developing economies”.
        The Green Fascists are bonkers, I have argued that case in the UK Green Party for some time, I am not a member but a good friend is, I despise Al Gore too, now he is a fraud I think we could both probably agree on that.
        Local Government are not able to create their own money supply ( the exception in the USA is the Bank of North Dakota, which as well as having an oil Boom/Bust has had a publicly owned Bank which has assisted that States economy hugely, Ellen Brown has written on that , )
        I am a pragmatist of the Old School and think that all objective and Viable energy sources Paotential and current are needed to assist with the economic Development of people across the world according to their own local needs. Sadly US foreign Policy frustrates the wishes of ordinary people all over the world even where they are rich in primary energy sources.
        This report will give you some idea of my own perspective regarding Debt and the Oil Business.

Is large-scale energy storage dead?

Many countries have committed to filling large percentages of their future electricity demand with intermittent renewable energy, and to do so they will need long-term energy storage in the terawatt-hours range. But the modules they are now installing store only megawatt-hours of energy. Why are they doing this? This post concludes that they are either conveniently ignoring the long-term energy storage problem or are unaware of its magnitude and the near-impossibility of solving it.
The graphic below compares some recent Energy Matters estimates of the storage capacity needed to convert intermittent wind and solar generation into usable dispatchable generation over different lengths of time in different places. The details of the scenarios aren’t important; the key point is the enormous differences between the red bars, which show estimated future storage requirements, and the blue bars, which show existing global storage capacity (data from Wikipedia). It’s probably not an exaggeration to say that the amount of energy storage capacity needed to support a 100% renewable world exceeds installed energy storage capacity by a factor of many thousands. Another way of looking at it is that installed world battery + CAES + flywheel + thermal + other storage capacity amounts to only about 12 GWh, enough to fill global electricity demand for all of fifteen seconds. Total global storage capacity with pumped hydro added works out to about 500 only GWh, enough to fill global electricity demand for all of ten minutes.


  1. Thinkstoomuch says:
    A very good article, again, Thank you very much, Roger.
    Just asking this question here because I am not the sharpest spoon in the drawer. I just think too much and way too ineffectively.
    The Greentechmedia hits me over the head like a hammer. Again! Maybe someone here can explain it in little words.
    What the is the deal with the Solana power generating station? Basically advertised value for Solana, alone is within ~20% of everything totaled, 1,500 MWh. It went online 2 years ago .
    Solana is touted as storing 250 MW for 6 hours. It is providing 8 hours of power a day over a year. But everybody is acting Like Crescent Dunes is the greatest thing since sliced bread. Yet it is less than half the capacity with 2/3rds the energy storage, with 54% of the array size for half the price.
    Crescent Dunes: A billion dollars for 110 MW. Contracted to sell electricity for 0.0135 kWH. Array (based on Wiki) 1,197,360 m^2.
    Solana: 2 billion dollars for 250 MW. Selling electricity according to articles I have been able to find at 0.14 kWH. Array according to NREL is 2,200,00 m^2.
    Solana are actually delivering about 80+% of what they promised. Which for most renewable energy projects is fairly astounding. It really should do better they are basically losing an hour of what a 2 axis tracker should be able to do in that area. Might have something to do with it takes 30 MW to run.
    Yet Solana gets no mention by anyone not even the bird fryers and save the turtle types.
    Is Gila Bend, Arizona the leper colony or something.
    It really does seem both Solana and Crescent Dunes have undersized arrays. But see first paragraph.
    A confounded,
    • Thinkstoomuch says:
      Gah. Just noticed my contracted for price electricity had an extra zero. 0.135 kWh.
      My apologies,
      • singletonengineer says:
        13.5 cents US per kWh isn’t competitive.
        I have yet to find a thorough, costed, report for a successful solar thermal system, either power tower or linear fresnel, anywhere on the planet.
        By “costed” I mean including subsidies, grants, tariff support, in-kind assistance, free access to public lands (eg US federal deserts) and so forth, as well as the normal design, capital and operating costs.
        I’d be happy not to expect provisions for end of life activities, but the remainder of the costs are known or knowable. Why haven’t they been published somewhere, perhaps as a PhD thesis or a post-doc peer reviewed meta study?
  2. Nigel Wakefield says:
    Excess (solar/wind) power > methanol (CH4O) > (winter) CHP
    A better storage solution is liquids, not gas, due to enormously greater energy density (1litre methanol = ~4.42 kwh, relative to same spacial volume of methane 0.11kwh).
    I’ve very recently communicated with a business (Antecy in the Netherlands) that claims “we calculate the overall conversion efficiency, i.e. electricity to methanol to be approx. 50% for large scale applications” using their technology.
    Whether this can be substantiated or not, I don’t know. Nor do I know when the technology might be commercially available, nor at what cost…. other than that, it’s all good! Maybe someone here, more scientifically minded than me, might be inclined to talk with them to see how their claims stack up.
    Even going power to gas, per Euan’s suggestion, we need to drive towards CHP at a distributed level. There are a small number of residential CHP systems available at present,with heat/power ratios in the region of 6:1.
    If every British home replaced its gas boiler with a CHP system, we’d add >15 GW of power generation capacity almost all of which would be guaranteed to be operating at times of peak winter demand, and, pleasingly, operating at efficiencies in excess of 90% as there’s no waste heat. Not to mention what we could do with schools, SME workplaces, other public buildings, etc. Rolling out small and micro CHP at that scale would drive costs through the floor and technological development through the roof… and the power utilities out of business (which is why it won’t ever happen)
    I favour methanol in the long run; far more easily and cheaply stored than methane, and can be used for heat, power and automotive fuel (with a small amount of tinkering on a standard petrol internal combustion engine).
    • Nigel, I agree a liquid is far better than a gas. But where does the CO2 come from to make the ethanol? To be emissions friendly it has to come from CCS – it ain’t ever going to happen. And I suspect the 50% efficiency you quote will be one way, i.e. making ethanol. Round trip will knock that back to 30% unless you can squeeze 80% out of CHP. The energy used in CCS will probably exceed anything you get out of storage.
      • Nigel Wakefield says:
        Methanol, not ethanol.
        According to Antecy’s website they have developed technology which captures CO2 from the air….( I’ve been around too long to take such claims at face value, but if true (and economically viable) it would be a game-changer. Notwithstanding, I don’t have the scientific nous to be able to substantiate the claim even wth access to the technology….
        As for CHP, at a distributed level (i.e. at point of use for the heat), the efficiencies are >90%. Existing systems for nat gas using Stirling engines or conventional internal combustion engines are (expensively) available at the moment. See Baxi Ecogen or SenerTecDachs ( Flow Energy also has one coming out ( [Flow also have really good deals on electricity supply… I’ve just changed to them from EDF Energy, saving myself >25% on annual power bills in the process!!]
        I hesitate to mention that micro CHP is also eligible for Feed In Tariffs at present, though with mass deployment those will disappear in the blink of any eye as prices drop.
        CHP also works with Fuel Cell technology though I’m struggling to come up with a name of an existing system at the moment.
        All of these will work equally well with methane….. with some small tinkering by the manufacturer.
        What I like about methanol is it can be centrally manufactured and stored and then distributed easily and cheaply to point of use (using methanol powered vehicles), as well as its versatility as a fuel. Beats hydrogen hands down and is more compatible with existing technology.
        I can imagine the Sahara and the Atlantic coast of north Africa (Morocco, Mauritania) as vast methanol factories using abundantly available solar and wind. Liquid power, transported by (and powering) ships, rather than thousands of miles of expensive and vulnerable interconnections… and those are by no means the only places in the world good for it. Saudi could do the same, and leverage existing under-utilised oil/NGL pipelines. Central Australia…. the south west USA… etc, etc, etc.
        On another note why bother with the multi-billion cost of the LNG liquefaction/trasnportation/rgasification chain, when you create the value chain so much more cheaply by converting the methane to methanol at source????
        The mind boggles….
        • It doesn’t add up… says:
          I’d take the CHP efficiency with a pinch of salt. The problem is that it is only that efficient when there is demand for low grade heat to match capacity, and the economics really depend on continuous 24×365 heat demand. CHP works well with a paper mill, but not so well in a domestic setting.
    • Alex says:
      50% electricity to methanol is a significant waste of energy – destroying high value electricity to get low value chemical fuel.
      For this to work, we need to convert heat to chemical energy, which probably means high temperature nuclear reactors making hydrogen. Then making methanol from atmospheric CO2 will be very, very useful.
      Fuel cells are great as long as we’re using natural gas. They’re not promoted enough because they use gas – the good being the enemy of the perfect, whatever that is. But 20 million fuel cells, each able to provide 2KWe, would solve the Britain’s capacity problem. In the summer, they would only be used in emergency, but in winter, they could provide much of the countries electricity. The trouble is, fuel cells are still very expensive.
  3. I would recommend to pay a look to the presentation on batteries made by Fabien Perdu at
    • robertok06 says:
      Dear dr Prieto,
      I want to thank you a lot for having given the link to this workshop’s web page, and all of the nice presentations in it!… a wealth of data by knowledgeable experts… really interesting stuff.
    • Beamspot says:
      Don Pedro, I was across this page few days ago, from the link you posted at Crisis Energética, and I have to disagree with some data presented regarding Lithium batteries.
      My experience (and experiments) with real lithium batteries as well as my second and third hand links that work with them in the automotive sector where I also work, state that there is NO Li chemistry that withstands more tan 2000 100%DOD on the real capacity, even less the 5000 claimed in that document.
      Recent published information confirmed my early guessings from years ago that Tesla Model S batteries last less tan 1000 100% DOD cycles, in the stated range of 600 to 750, best real worls condition, less in hot places like our iSpain, thanks to Arrhenius.
      Those are high energy batteries, the cheapest and lightest ones (my calculations from last 2015 september give me a rough 100 – 110$/KWh just in raw materials), although the shortest live ones. High power Li-Pol batteries (like Leaf’s pack) range in the 1500 cycles at best, with an estimation of 130 – 140$/KWh), and LiFePO range on the 2000, and >150$/KWh.
      High power batteries have lower material efficiencies and higher CO2 and pollutants emition per KWh than High Energy batteries.
      Anyway, ESOI is my concept of choice, much better than KWh (mandatory since this is the storage measurement, it is usless/senseless to speak about energy storage and don’t give any figure in KWh).
      Cycles are important, but it is not the same to compare day cycling (365 cycles per year) than seasonal storage, at 1 cycle per year. 1000 cycles is a looooooooooong time to check plausability…
      I wished to post a long entry, but I guess this huge amount of comments request from my side to be short.
      Only one last comment: there is some kind of easy and cheap seasonal energy storage system: biomass.
      My worst fear is that will lead us to the Galactic Eastern Planet.
    • Peter Lang says:
      Thank you for the link to ‘ Science for Energy Scenarios: 3rd Science and Energy Seminar at Ecole de Physique des Houches, March 6th-11th, 2016’ And thank Robertok06 for highlighting it. It includes many presentations on ERoEI. My comments on two of them are:
      1. Jessica Lambert ‘Examining The Relation between Quality of Life and Biophysical vs Economic Conditions’ Human Development Index versus EROEI (for society). If this analysis is correct, it shows how significant achieving a high EROEI (society) is for improving human well-being.
      However, it seems to me many of the presentations are using energy intensity as a proxy for ERoEI and in fact are simply plotting energy intensity and calling it ERoEI. Lambert has not shown a plot of HDI versus Energy Intensity; I suspect that chart would be identical or near identical to the charts she has shown of HDI v EROEI. The authors are experts on this subject and there is a lot of background to the analyses. I’d welcome comments on this.
      2. Daniel Weißbach, et al. ‘ The EROIs of Power Plants – why are they so different?’ is very interesting, IMO. I’d like to hear comments and discussion from others about the methodology, because it is differences in methodology and assumptions that are reason for the large differences in ERoEI estimated by different authors.
      The second last slide summarises the ERoEI for the different technologies:
      • Wind and solar: 1-4
      • Fossil fuels: 30
      • Hydro: 35
      • Nuclear (today’s LWRs): 75
      • Nuclear theoretical limit: 10,000
      Weißbach includes his spreadsheet here:
      Also see other EROEI presentations linked in my first link above.



Transmission planning: wind and solar

Posted on May 7, 2015 | 210 Comments
by Planning Engineer
Some of the denizens have requested an introduction to transmission planning and a discussion of how the transmission system is impacted by renewable resources.
This post complements a previous post which addressed renewable resources and generation planning. The considerations here are not of major importance when renewable resources only make up a miniscule portion of the generation mix but they become significant as renewable generation begins to make up larger portions of the resource mix.
Powerflow 101
On the grid power does not flow downhill, take the shortest path or move from areas of high to low pressure. The grid cannot be well understood as a highway system or a set of pipelines. Energy simultaneously takes every possible interconnected path from source to destination. For the most part in normal operating ranges the flows between a generation addition and a new load are unaffected by the flows that are already on the lines. Energy flows on every possible interconnected path based on the inverse ratio of that paths impedance (resistance).
As can be seen below, the US has three major grids (two shared with Canada). The grids have to be built so that the flows serve planned loads from planned generation without overstressing any part of the system. This is true not just for the major lines shown below but for all the lower voltage lines and interconnected portions of sub-transmission systems as well. The graphic below does not include voltages below 230 kV, however 115 kV and 161 kV lines make up a large part of these interconnected transmission networks.

Renewables and grid reliability

by Planning Engineer
The costs of major grid outages are staggering and recovery from such outages is challenging; therefore the North American grids are planned and operated to ensure high levels of reliability.
Despite changing conditions and various threats, it is widely expected that that current levels of reliability will be maintained or improved upon. The grid is impacted by multiple electro-mechanical effects that planners have learned to model and plan for over time and through experience. The rapid deployment of any new technology will present both modelling and operational challenges to maintaining high levels of grid reliability.
With the increased focus on reducing fossil fuel generation the question frequently comes up as to, “How much solar and wind can be integrated with the grid without unduly impacting system reliability?” The increase in renewables relative to conventional generation is often referred to as “penetration”. The US grids have sufficient robustness such that small penetration levels do not pose excessive risk, however high levels of penetration raise serious reliability concerns. This post will argue that there is not a single answer and that the answers are not easy, therefore estimates will involve considerable uncertainty. Casual readers may want to read the “Key Points” and then skip to the “Conclusions” or specific topics of interest. Those seeking a more optimistic assessment may want to read Volume 4 of the National Renewable Energy Laboratory’s Renewables Electricity Futures Report.
Key Points
  • There has been a high value placed on having an extremely reliable bulk grid as the costs and consequences of bulk grid outages are severe
  • The bulk grid supports and is supported by conventional rotating generators (Coal, natural gas, hydro, nuclear, biomass) which provide “Essential Reliability Services” (ERSs)
  • Wind and solar provide increased reliability risks because they are new changing technologies, they are intermittent and they do not as readily provide ERSs
  • Current high levels of reliability depend upon experience gained over time through the gradual adoption of new technologies
  • Wind and solar can be made to provide approximations of ERSs, but that requires significant increased costs and reduced generation output
  • Because of the complexity of impacting factors and the high level of reliability maintained for the US grids, systemic degradation of the reliability of the grid is hard to detect and measure
  • The amount of renewable penetration that can be accommodated will vary from area to area and power system to power system – There is not a single answer
    • Because conventional resources produce an abundance of ERSs, accommodation of low levels of renewables may be accomplished with negligible risks
    • Because current renewables do not provide adequate ERSs high penetration levels provide significant risks
    • Between the above two levels there is a gap of (wicked?) uncertainty.
  • For assessing grid reliability, the maximum penetration of wind and solar during times of stress is the key number not the “average” contribution of wind and solar
  • Increased penetration of such asynchronous resources, all else equal, will likely adversely impact bulk grid reliability
  • As the penetration level of asynchronous generation increases this will either increase cost, limit operational flexibility, degrade reliability or most likely result in a combination of all three factors
The above statements have the following important caveats
  • In some situations renewable resources may have some practical benefits and better support reliability in some limited applications For example:
    • Air quality standards often prohibit the location of new generation resources in congested areas. If renewable resources are allowed to be located close to load centers –the system may see benefits
    • Electronic emulation of ERSs in some cases will not be as good as actual synchronous machines, but with proper controls it may also be better in some cases
  • Given time the reliability risk associated with new technology can be reduced as more experience is gained so that penetration levels can be increased
What is Meant by Bulk Grid Reliability and Why is it So Hard to Measure?


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22 thoughts on “Renewables,EROI Why Money Doesn´t cut it when making Energy Investment Decisions!

  1. rogerglewis
    on September 29, 2019 at 12:24 pm said:
    I do not try to convince anyone of anything.
    I do not say anyone is wrong in the totality of any claims which they make including yourself.
    What I do ask for is the evidence and the reasoned arguments posited with the aid of those arguments and that data.
    These are very complex systems and the binary and proscriptive tone adopted by many who attach themselves to the tribal polarities generates more heat than light.
    The insistence that arguments have been carried by evidence when patently that is not the case are rather tedious. The CO2 arguments detract particularly from the environmental arguments and the arguments related to resource depletion and exhaustion of other organic systems.
    The criticisms I have of the intellectual dishonesty regularly displayed now in these discussions at Tims excellent blog here remain.
    Have a great Sunday.

    Steven B Kurtz
    on September 29, 2019 at 3:29 pm said:

    Wilber, despite being brilliant in some areas, has for decades assumed that non-physical/energetic things exist. He is far from alone, as theologians and some philosophers have done so for millennia. As appealing as those positions are to Homo superstitious (estimated 80+%), there is zero shareable evidence for such stuff. The attempted ‘proofs’ I’ve seen are either circular or tautological.

    Similar techniques have been used by those claiming disembodied mind and panpsychism. An Australian author, Reg Morrison, has written about mysticism as an evolved trait which has outgrown its usefulness now that we’ve become too successful. (overshoot) See:

    on September 29, 2019 at 4:17 pm said:
    We do know of one non-physical, non-energetic thing that does exist – thought.

    Moreover, the idea that mysticism (or anything beyond the tangible) has been rendered obsolete by advances in our knowledge seems to put a lot of faith in the concept of ‘advance’.

    I’m not a subscriber to any established religion, but I certainly don’t dismiss the concept that there might be ‘something beyond us’. Perhaps the most rigorous philosophical investigation of this topic, carried out many years ago by a retired judge, concluded (a) that there probably is a driving intelligence behind the universe, but (b) that this is likely to bear no resemblance at all to the Deity postulated by religion. For one thing, this intelligence is likely to be subjective (akin to our subconscious minds), not objective (like our conscious minds). It might thus be likened to a “highest law of science”.

    Steven B Kurtz
    on September 29, 2019 at 4:29 pm said:

    Energy is physical. If anyone can evidence non-caloric thought, a Nobel likely awaits!


    on September 30, 2019 at 5:06 am said:
    Your comment is awaiting moderation.
    Hello Stephen,
    Ken Wilber is an interesting Philosopher and Psychologist I find his ideas interesting. Rupert Sheldrake’s theory of Morphic Resonance is very interesting as well, and one which I believe has much to recommend it.
    Regarding Philosophy of Mind, it is a huge subject and my own interests tend towards the work of Wittgenstein and Linguistics. Ultimately I am though most persuaded by the Father of American Pragmatism CS Pierce.
    Here is a link to my Essay, why are we here which I wrote in reaction to David Malones Documentary series of the same title,
    In all matters epistemological and philosophical I demure ultimately to C S Pierce and this made up quote from ´We Pragmatists ´

    CHARLES SANDERS PEIRCE: ´´In order to reason well …. it is absolutely necessary to possess … such virtues as intellectual honesty and sincerity and a real love of truth (2.82). The cause [of the success of scientificinquirers] has been that the motive which has carried them to the laboratory and the field has been a craving to know how things really were … (1-34).[Genuine inquiry consists I in diligent inquiry into truth for truth’s sake(1.44), … in actually drawing the bow upon truth with intentness in the eye, with energy in the arm (1.235). [When] it is no longer the reasoning which determines what the conclusion shall be, but … the conclusion which determines what the reasoning shall be … this is sham reasoning…. The effect of this shamming is that men come to look upon reasoning as mainly decorative…´´. seminal essay How to make our ideas clear is also a great starting off point for embracing such truth as we might be fortunate enough to encounter in our allotted time on this blue marble suspended in eternity.

    Davids Documentary is available on Curiosity stream. David and I are good friends and you may be familiar with some of his other Documentary Work for BBC Horizon ( Icon Earth) or Independently (Dangerous Knowledge) or of his Father Adrian Malone, Cosmos with Carl Sagan and The Age of Uncertainty with GK Galbraith.

    Here is a link to My trilogy of Poems which informs my Novel Conquest fo dough which I have also made a web site for also linked.

    Getting back to Wilber the Paper by the late great Bernard Lietaer Integral money
    is hugely en-riching and AQAL analysis of monetary perspectives bears much fruit
    Jain Many Sidedness and Maimonides souces of Contradiction are equally helpful templates for Making our ideas clear.

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