Ecological Economic Issues in the Transition to 100% Renewable Energy

By Mark Diesendorf

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Energy is one of the foundations of industrial society. The transition to an ecologically sustainable energy system, based on renewable energy and energy efficiency, is essential for environmental reasons and has the potential for improving social equity. The easiest and least expensive scenarios for the transition involve electrifying most heating and transportation while substituting fossil fuelled electricity with renewable electricity (RElec), the bulk of which is supplied by variable renewable electricity (VRElec), mostly wind and solar photovoltaics (PV). Bulk electricity from wind and solar PV, ‘firmed up’ with storage, is now generally less expensive than new coal-fired power stations and is much cheaper than nuclear.

However, recent papers by Sers & Victor (2018) and by King & van den Bergh (2018), argue from outdated data that the energy return on energy invested (EROI) of RElec technologies and systems may be so low and declining that a rapid transition to RElec may displace investment in other important economic sectors. In a journal submission currently under review, I examine critically the assumptions, data and arguments in these papers.

Outdated data do not reflect present and future EROIs of VRElec. Prices of VRElec are falling rapidly, partly reflecting decreasing costs due to declining energy inputs and increasing energy outputs, and hence increases in EROI. The main challenge is incorporating storage while minimising system EROI reduction.

Simulation modelling shows that VRElec can contribute the bulk of generation and that, in several large regions, the quantity of storage required to maintain system reliability is 2-3 orders of magnitude less than annual system generation. Furthermore, the impact of storage on system EROI depends on the mix of storage types adopted and their usage patterns.

VRElec systems substantially increase energy efficiency of the economic system by reducing primary energy inputs to the economy and hence increasing system EROI. This increase in energy conversion efficiency offsets, at least partially, the reductions in EROI from storage and increases the likelihood of transitioning rapidly to RElec while maintaining a sufficiently high EROI to avoid adverse economic impacts. Furthermore, the low efficiency of conversion of fossil fuels into electricity entails that the EROI of fossil fuelled electricity is generally low (Brockway et al. 2019).

EROI is just one of a number of important elements of the energy transition that have economic impacts and most of these elements will be beneficial to the economy.

Mark Diesendorf, BSc (Hons 1), PhD, is Honorary Associate Professor in Environmental Humanities at UNSW Sydney. Previously, at various times, he was a Principal Research Scientist in CSIRO, Professor of Environmental Science and Founding Director of the Institute for Sustainable Futures at University of Technology Sydney, and Education Program Leader of the Australian Cooperative Research Centre for Low Carbon Living. His most recent book is ‘Sustainable Energy Solutions for Climate Change’ (Routledge-Earthscan).