Energy Return on Investment (also known as Energy Return on Energy Investment, EROI, and EROEI) is the ratio of the amount of usable energy generated by an energy source to the amount of energy required to extract and/or build infrastructure for utilizing that energy source (this input energy is the embodied energy of an energy source). For fuel-based energy sources, most embodied energy goes towards extraction; for most renewable sources, the majority of the embodied energy goes towards building infrastructure to capture energy (e.g. energy to mine coal and/or energy to build a wind farm). For example, the EROI of coal would be the ratio of the useful thermal or electrical (more on this distinction below) energy obtained per unit of coal from a power plant to the energy required to mine, transport, and process that coal into energy. For renewable sources such as wind, the EROI would be the ratio of electrical energy output from a wind farm to the embodied energy of building all the turbines and supporting infrastructure (e.g. power lines) in that wind farm.
Comparison of EROIs between different energy sources must be done carefully to ensure that it is done on a level playing field; apples to apples, if you will. Heat based (e.g. fossil fuels, nuclear, solar thermal, etc.) and electrical (e.g. wind, solar PV, hydroelectric, etc.) energy sources provide different types of energy with different application potentials. Thus, it is important to consider the target application and primary energy type when comparing EROI of different energy sources. For example, heat-based energy to generate electricity will have a lower EROI than heat-based energy for generating heat (thermal power plants have a typical heat-to-electricity efficiency of 33%), thus considering target application will have a significant impact on the EROI of a heat-based source. System boundaries of energy sources must also be established in a fair manner when comparing EROIs. The system boundary is the definition of what parts of the life cycle and supply chain of an energy source (and its infrastructure) are included in the embodied energy calculation for that energy source. For example, the embodied energy for a unit of coal would include the fuel used to power mining equipment to mine a unit of coal, but should the energy required to build that mining equipment also be included? For a wind farm, the embodied energy would include the energy required for creating the steel, composites, and cement for turbines, but would the energy required to build the factories and equipment that generate those materials be included as well? The system boundaries with respect to embodied energy calculations must be established fairly for useful and objective EROI comparisons.
Modern societies depend on abundant and reliable energy to self-sustain and develop. However, this output (or useful) energy must be obtained by investing energy to extract fuels and/or build energy infrastructure (embodied energy). The embodied energy is detracted from the gross energy output from fuels and infrastructure, such that Enet = Egross – Eembodied, where Enet is the useful energy obtained from a source after investing the energy for its extraction/infrastructure construction (embodied energy). The greater the EROI for an energy source, the greater the Enet output per unit of that source. This means more useful work can be derived from every unit of that energy source, thus a greater per unit societal contribution. Here, “societal contribution” refers to satisfaction of society’s needs regarding self-sustenance and development. Examples of society’s needs: extracting energy, transportation, growing food, healthcare, education, arts, etc. Certain “lower level” needs must be met before those on the “higher levels” can be achieved. For example, energy extraction, transportation, and food production are arguably required for education, health, and arts to be attainable. Analogous to Maslow’s Hierarchy of Needs, an Energetic Hierarchy of Needs (Fig. 1) (Lambert, 2014) can be used to represent the order in which society must meet its needs to first sustain itself, then progress to higher levels of living. Since energy is required to achieve the needs listed in the Hierarchy, increased societal access to high-quality, reliable energy enables greater satisfaction of lower-level needs and unlocks potential for achieving higher level needs.
Figure 1: Society’s Hierarchy of “Energetic Needs”
EROI is a large part of societal energy access. A higher societal (or national) EROI means society (or nation) needs to invest less energy (embodied) to obtain a unit of useful output energy (Enet) that can be used to satisfy its sustenance and developmental needs. Top-down macroeconomic studies suggest that greater fuel EROIs are correlated with increased ratios of GDP to fuel consumption (Kaufmann, 2004, Hall et al. 2003). According to a statistical analysis by Lambert et al., EROI, energy consumption per capita, and the Lambert Energy Index (geometric mean of normalized EROI, energy consumption per capita, and Gini-Index) by country are correlated with commonly used quality of life indicators [Human Development Index, percent of children under 5 years of age underweight, average health expenditures per capita, percent female literacy, Gender Inequality Index, and rural access to clean water were used in this study], suggesting increased EROI contributing to higher societal well-being. Furthermore, Weissbach, 2013 calculated a “rough estimate” for the minimum EROI threshold for countries with OECD-like energy consumption technologies and came to the result of ~7 minimum EROI for sustaining a complex/modern socioeconomic system. The calculation was based on U.S. total energy consumption, GDP, and energy prices in 2011, and similar results were found for other countries with the same calculation. Although such an EROI value is not very precise, it suggests that EROI below a certain threshold will prevent current economic efficiency and detract from the amount of surplus energy (Enet) available to develop society and achieve higher needs in the Energetic Hierarchy.
Energy availability and reliability, impact on the natural environment, and impact on climate are all essential considerations when determining how to power our future. The energy technologies that power society must be benign to both environment and climate, but must also supply energy at a sufficient EROI, quantity, and reliability for societal maintenance and development. Weissbach, 2013 performed EROI calculations for various energy sources (here explain EROI is useful energy output regardless of type, also mention/explain EMROI). The results are displayed in Fig. 2 (Weissbach, 2013). The buffered EROIs consider the necessary energy storage for variable sources (i.e. solar, wind, hydro), whereas the unbuffered EROIs ignore storage needs.
Fig. 2: EROIs of various energy technologies
Fossil fuels have relatively high EROIs, but their current usage (lacking significant greenhouse gas mitigation technologies) has significant impacts on global climate. Mainstream renewable sources (i.e. wind and solar) have no direct emissions from usage, but have significantly lower EROI values than fossil fuels. If one were to consider only the importance of decarbonization, using only mainstream renewables and other non-emitting sources would be an acceptable solution; if one were only considering EROI and energy access, fossil fuels and other fuel-based energies would be much more attractive. However, neither the effects of anthropogenic climate change nor the significant lowering of global EROI can be ignored when determining how to power our future. The former may cause long-term, permanent damage to Earth’s environment that can drastically affect life on our planet, and the latter may be detrimental to sustaining current quality of life in developed nations and the progress of developing nations to attain higher quality of life for its citizens. The most sustainable path forward is not as simple as choosing the technologies with the least direct emissions to eliminate use-stage emissions or choosing the most energy-dense sources. There must be holistic consideration of the various issues regarding energy and all available technologies with the goal of mitigating greenhouse gas emissions while meeting an increasing worldwide energy demand.
 – D. Weißbach, G. Ruprecht, A. Huke, K. Czerski, S. Gottlieb, A. Hussein, Energy intensities, EROIs (energy returned on invested), and energy payback times of electricity generating power plants, Energy, Volume 52, 2013, Pages 210-221, ISSN 0360-5442, https://doi.org/10.1016/j.energy.2013.01.029.
 – Jessica G. Lambert, Charles A.S. Hall, Stephen Balogh, Ajay Gupta, Michelle Arnold, Energy, EROI and quality of life, Energy Policy, Volume 64, 2014, Pages 153-167, ISSN 0301-4215, https://doi.org/10.1016/j.enpol.2013.07.001.