Energy Analysis Methodology
An energy analysis of an energy production system show how long the system must
operate to deliver the energy consumed in the construction and operation of that system.
During this period the system repays its fossil fuel subsidy. In such an analysis not only
the direct energy consumption must be taken into account, but also the indirect energy
consumptions that are needed to produce the materials necessary for the construction of
the hardware and the labor required to erect, operate and maintain the system
Energy analyses are useful supplements to standard econometric procedures based on
monetary assessments of costs and benefits for several reasons. First and foremost is the
fact that all economic analyses require assumptions about the future, such as interest
rates, future price of conventional fuels, and inflation rates. Also, assumption about future
government regulation, taxation rates and political decisions can greatly influence the
economic evaluation process. Finally, the fossil payback time of the system can be
precisely and conveniently evaluated when the numeration and the denomination in the
cost-benefit ratio are in similar units, i.e. energy input/yearly energy output.
There exist essentially two different methods for an energy analysis. The first is the
process-chain-analysis. As the name implies, a complex production chain is broken into
its various elements and for each of them the relevant energy inputs and outputs are
identifier and evaluated. At the end of this chain is the physical system in which all the
energy “expenses” have been accumulated. The process is illustrated schematically for
solar thermal conversion system in Fig A.
Fig A.
Schematic of Process-Chain-Analysis
Another method to perform an energy analysis uses an input-output table which shows in
monetary units the interdependence of all sectors of the national economy. To convert
from dollars to energy units in this approach, one attaches energy flows, which can be
obtained from a national energy balance, to the monetary value flows within such an
input-output table. Then, an energy matrix based on the physical flows and their
respective monetary values can be formulated. This energy matrix finally reveals the
amount of primary energy necessary for producing one unit of monetary value in a given
economic sector of the input-output-matrix, including all previous energy expenditures.
For example, the construction of a power plant, be it solar, nuclear, or fossil, consumes
material and services from different economic sectors. If all contributions from the
individual sectors of the national economy are known, the total energy input for the
construction of the system can be calculated from the energy-consumption matrix.
Similarly, the energy input required to maintain and operate the system can be evaluated.
It should be noted that for each intermediate and final product-step, energies of different
forms and quality are needed, e.g. coal, oil, or electricity. For a meaningful comparison of
the final energy consumptions it is therefore necessary to convert the respective energy
contents of the energy flow streams to primary energy units by appropriate conversion
factors and efficiencies. For Example energy input in the form of electric power produced
from coal with an efficiency of 40% must be multiplied by 2.5 for obtain the primary
energy.
If this procedure is used to convert the energy output of a plant to primary energy units,
one can define an energy payback period as the time which the plant must operate to
repay the primary fossil fuel subsidy invested in the construction and operation of the
plant. When dealing with a renewable energy conversion system, e.g. a solar parabolic
trough thermal system, the operation energy is small compared to the energy used in
construction. Fig B. shows the meaning of the operating time required to return the
energy required for its construction, i.e. the energy payback period. If the life time of the
system is known (or can be estimated), the ratio of system life time to the time required to
repay the construction energy investment yields the energy return on energy investment if
O and M cost are neglected.
EROEI
= E out, gross
E in, support
AER
=
CO2
= E in, support * ηCO2
Energy Return on Energy Investment
Eout, gross
Absolute Energy Ratio
EP in, gross + ES in, gross +E in, support
When a solar system supplies only part of the total energy requirement of a process, the
energy supplied by the renewable systems can also be interpreted as savings in primary
energy for the operation of the process. This interpretation permits direct comparison of
the EROEI of a solar system with that of an energy conservation measure, such as for
example a waste heat recovery system.
The proposed energy analysis method can also be used to compare renewable and nonrenewable energy sources. If we define the energy return on energy investment (EROEI)
ration as:
EROEI
=
=
Total Amount of Useful Energy Delivered .
Total Energy Invested to Produce and Deliver Energy
E d  E o  E 1 
EM  E p  Ec  Et 
Where: Ed= delivered energy over the system life time
Eo= energy, including fuel, used to operate and maintain the system (O&M)
E1=energy lost in transmission to point of use
Em= energy required to mine fuel
Ep= Energy required to process and deliver fuel
Ec= energy invested to construct plant initially
Et= energy used to construct transmission systems.
Note: All energy terms are to be converted into primary energy contents.
Net energy analysis compares the costs and benefits of an energy system in
energy terms. The numerator of the EROEI is simply the total energy produced by the
system over its lifetime. The denominator of the EROEI ratios is the direct plus indirect
energy used by the energy system. Direct energy refers to the fuel actually burned in the
construction and operation of the system, such as the diesel fuel burned by an oil drilling
rig or the electricity used by a parabolic trough tracking system. Indirect energy costs are
the energies used elsewhere in the economy to produce the capital and labor used in the
energy system. An example of and indirect energy cost is the energy used to produce the
aluminum which is used in the construction of the parabolic trough or the extra glass in a
double-glazed window.
Indirect energy costs are calculated by first making a list of all the materials used
in the construction, installation, and operation of the energy system, and their associated
dollar costs. An energy intensity factor (BTU/$) is multiplied times the dollar value of a
particular material input to give the energy required to produce that input. That number is
a measure of the energy cost of that particular material input to the energy system. The
energy intensity factors are calculated for an energy-based input-output model of the U.S.
economy (Herendeen, and Bullard, 1975: Hannon et al.,1985). The energy input-output
model traces the flow of both energy and dollars between sectors of the economy. By
quantifying all the energy and dollars flowing into particular sectors, say the steel
industry, it is possible to estimate the amount of energy the steel industry uses in the form
of energy embodied in all the inputs it purchases from other sectors. The ratio of all such
energies to the dollar value of the steel produced is the energy intensity (BTU/dollar) of
steel production purchases from other sectors.
In net energy analysis, each material input to an energy system is assigned an
energy intensity factor calculated for the sector which produced that material. The dollar
value of the input times its energy intensity is its indirect cost. Summing all such indirect
energy costs gives the indirect energy cost for the entire energy system.