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Evolution of EROIs of Electricity Until 2050: Estimation Using the Input-Output Model THEMIS

Adrien Fabre

No 2018.09, Policy Papers from FAERE - French Association of Environmental and Resource Economists

Abstract: The EROI –for Energy Returned On Invested– of an energy technology measures its ability to provide energy efficiently. Previous studies draw a link between the affluence of a society and the EROI of its energy system, and show that EROIs of renewables are lower than those of fossil fuels. Logically, concerns have been expressed that system-wide EROI may decrease during a renewable energy transition. First, I explain theoretically that the EROIs of renewables themselves could then decrease as energy-efficient fossil fuels would be replaced by less energy-efficient renewables in the supply-chain. Then, using the multiregional input-output model THEMIS, I estimate the evolution of EROIs and prices of electric technologies from 2010 to 2050 for different scenarios. Global EROI of electricity is predicted to go from 12 in 2010 to 11 in 2050 in a business-as-usual scenario, but down to 6 in a 100% renewable one. Finally, I study the economic implication of a declining EROI. An inverse relation between EROI and price is suggested empirically, even though theory shows that both quantities may move in the same direction.

Keywords: EROI; input-output; energy transition; MRIO; sustainability (search for similar items in EconPapers)
JEL-codes: Q40 Q47 Q49 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene and nep-reg
Date: 2018-12
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