Are we Heading for an Energy Cliff/ERoEI squeeze?

Why Falling Energy Return on Energy Investment doesn't Explain our Problems

Addendum to: Is Earth Running out of Resources?

False but seductive explanations for genuine problems are dangerous. They distract us from real solutions. We certainly have some problems right now, and people are looking for explanations.



The idea that modern civilization is hitting an “Energy cliff” or that falling Energy Return on Energy Investment (ERoEI) is a serious threat is one such fake explanation.

The claim, briefly, is that as easy energy like oil gets used up, we move onto energy sources that require more energy input in order to get usable energy out. ERoEI is the ratio energy out ÷ energy in. Obviously if ERoEI for all energy sources falls below 1, then modern society really will cease to function; but some people assume that you need an ERoEI of more than 5 or 7 to avert collapse:

“Below 7 and humanity falls off the net energy cliff where a too large portion of our human resources and capital need to be invested in simply staying alive to the detriment of the services provided by net energy such as health care, education and pensions”


The arbitrary cutoff of 7 is probably wrong and the true value is context dependent; how much of other resources do you need? An ERoEI of 1.5 would be fine if everything was automated! More ERoEI is (all else equal) better though.

Will we ever get to an ERoEI of less than 7? Let’s look at some real numbers. The whole energy sector in the UK employs 144,000 people (plus another 480,000 in supply chains etc). 44,000 work in windᵃ, which provides 20% of the UK’s electricity or 3% of the total man-made primary energyᵇ. 3% of the UK is 2 million people, so this means that wind energy in the UK has a Human Return on Human Input (HRoHI) of 2,000,000/44,000 = 45. The ERoEI for wind turbines is apparently around 30ᶜ.

In practice we will probably see an improvement in both ERoEI for wind power and an increase in the amount of energy produced per person as technology improves and renewbles get better. The same applies to solar.


Bear in mind that people use about 10kW of power, so $0.3/Watt is just $3000/person, whereas $76/Watt is $760,000 (this is over a roughly 20-year life, so think $38,000/year-$150/year). That’s a huge difference.

Right now we don’t get much power from renewables, so it’s OK if they are intermittent. When renewables take over most power generation, they will have to suffer the cost penalties for storing their energy (buffering) so the ERoEI and HRoHI will both get worse all else equal. But over time other effects will make it better, technology will continue to improve, and it is likely that the ERoEI for renewables will just keep getting better. A much worse ERoEI for renewables would mean much higher energy prices, which would mean huge profits for making better solutions, which means people are already working on that in anticipation. Economics and price signals make physical scarcity reduce itself.

Energy storage for grid power already existsᵈ, but it’s not deployed at a global scale because it isn’t cheap enough yet; though now that there is demand for grid energy storage, the economic optimizer of our civilization is hard at work on the problem, developing new types of energy storage such as liquid-metal batteries, plus a whole bunch of other stuff that I don’t want to bore you with.

And in any case, global oil production shows no signs of peaking, and neither does natural gas. You could say that we just “got lucky” by finding some new unconventional oil deposits to keep the black gold flowing, but that’s not luck. It’s capitalism working as intended.

The energy cliff scenario of decreasing ERoEI and an energy collapse will not happen if the economy and science/tech keeps working roughly as it does now. There’s oil and gas for a long time, and renewables are already overtaking coal power. Worrying about energy is actually kind of crazy; it’s cheap, we have many sources of it and we are absolutely not running out.

So if the ERoEI/energy collapse stuff is wrong, Why does anyone talk about this? There are several reasons.

  1. Getting power from the Sun or the wind requires a more complex society than digging coal out of the ground does, so in some sense there is a valid point hidden in here: a coal-society can regress to 1850 and recover, but a solar/mega-turbine society has to maintain itself at 2020 technology levels. Losing the easy fossil fuels makes us more fragile.

  2. Economics fools people. The economy is a sort-of-efficient optimizer and it doesn’t do things until they need to be done. When coal and oil are cheap, the economy doesn’t bother to sink $1 trillion into grid storage batteries or 200-meter tall wind turbines that wouldn’t provide immediate value. So it seems like we’re always about to fall off a cliff where some resource will run out, but actually it’s the economy doing just-in-time provision of stuff (because that’s the most efficient thing to do). And in case you’re wondering about the economy leaving it too late to solve problems, that should in theory be taken care of by price signalsᵉ.

  3. Things are getting worse in The West for reasons unrelated to ERoEI, but those reasons are taboo and complicated so people grasp at something safe and legible that they can pin the blame on. For some people, that thing is ERoEI.

I don’t think this is a particularly important topic but it’s tangentially related to some more important things, and perhaps this blog post can act as a sort of anti-ERoEI discussion. The comments are open to anyone, so feel free to leave one!


ᵃ Source: https://www.current-news.co.uk/news/jobs-in-renewable-energy-continue-to-grow-hitting-11-5m-globally-in-2019

ᵇ In 1 year, the UK uses about 8 exajoules of energy, wind provides about 0.25 exajoules right now and electricity is a total of 1.25 exajoules. Source: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/928350/2020_Energy_Consumption_in_the_UK__ECUK_.pdf

ᶜ Source: https://en.wikipedia.org/wiki/Energy_return_on_investment#Wind_turbines

ᵈ See: https://en.wikipedia.org/wiki/Hornsdale_Power_Reserve
See also: https://en.wikipedia.org/wiki/Dinorwig_Power_Station
Hornsdale cost AU$90,000,000 and has a 129 MWh capacity, meaning it costs roughly $0.7 to provide 1 hour of backup for 1 Watt of renewable power. This is not great news, as 1 Watt of renewable power only costs about $1.5 to install, but it will need backup for at least 100 hours. Li-ion battery grid storage is about 50 times too expensive. Dinorwig pumped hydro storage facility in Wales cost $1.8Bn to build and stores 9.1 GWh = $0.2/W for 1 hour, i.e. $20 in hydro to back up $1 of renewables for 100 hours. Even hydro is too expensive for an all-renewables economy. In reality what is happening is that Li-ion batteries like the Hornsdale plant are operating on a timescale of a few hours, with dispatchable fossil fuels like natural gas being called in when there is a power shortage for more than a few hours. Over time the cost of the batteries will go down and the dispatchable fossil fuels will be used less and less. New grid battery tech like flow batteries or liquid metal batteries will eventually take over from the fossil fuels for longer periods of low renewable output.

ᵉ If there’s going to be a predictable shortage of X in 5 years’ time, X futures will increase in price and shares in X production companies will go up, providing an incentive for people to store X up or ramp up X production. This mechanism isn’t perfect, of course: you can’t have futures for a total civilizational collapse because nobody would be there to settle them! Nevertheless, price signals would fix an energy cliff problem if it was predictable and near-term (5 years or less), and indeed that is exactly why peak oil didn’t happen.